Personal Finance

I'm a Canada Pension Plan (CPP) expert. Any questions?

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  • Jan 29th, 2023 3:14 am
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[OP]
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dazz wrote: I was told January CPP and OAS rates/info is in the system. can you now back up your claims?
Yes dazz - the 2023 rates that are now in the system confirm that I was 100% accurate with my claims. Maybe you should check with your contact to see what they have to say now.
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Dogger1953 wrote: Yes dazz - the 2023 rates that are now in the system confirm that I was 100% accurate with my claims. Maybe you should check with your contact to see what they have to say now.
lol. next time he argues with you he need to confirm before he/she type and read.
and not use voice typing, expect mistakes... his sig lol.
Question: Siri can I argue with Dogger and prove him wrong?
Answer: Yes you can but you will be proven wrong.
Tried new coffee and doughnut. Found same old stale thing. expected bill of six bucks but it was 600 million. Big mistake so the guy said don't worry it is on the house. going back to McD.
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Hi Dogger,

Thanks for your continuous assistance. Happy New Year!

2023 CPP max with enhancement is $1,306.57. What is the CPP max without enhancement?
For 2022 CPP max with enhancement was $1,253.59. And you correctly said without enhancement was $1,243.75.

I don't understand the 6.5% indexation rate. If I take 2022 CPP max $1,253.59 and add in 6.5%, result is $1,335.07.
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yvrwindsor wrote: Hi Dogger,

Thanks for your continuous assistance. Happy New Year!

2023 CPP max with enhancement is $1,306.57. What is the CPP max without enhancement?
For 2022 CPP max with enhancement was $1,253.59. And you correctly said without enhancement was $1,243.75.

I don't understand the 6.5% indexation rate. If I take 2022 CPP max $1,253.59 and add in 6.5%, result is $1,335.07.
As to your second question, it may be a YMMV thing in that it has something to do with your approved CPP pension level, but I'll let @Dogger1953 clarify that for certain.

Cheers,
Doug
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yvrwindsor wrote: Hi Dogger,

Thanks for your continuous assistance. Happy New Year!

2023 CPP max with enhancement is $1,306.57. What is the CPP max without enhancement?
For 2022 CPP max with enhancement was $1,253.59. And you correctly said without enhancement was $1,243.75.

I don't understand the 6.5% indexation rate. If I take 2022 CPP max $1,253.59 and add in 6.5%, result is $1,335.07.
First, the easy part of the answer is that the 2023 maximum base CPP retirement pension is $1,288.33. As to the second part of your question, I'm going to disagree with Service Canada when they quote $1,306.57 as the maximum CPP with the enhanced portion added. They acknowledge in the footnotes however, that this maximum amount applies only to benefits that begin in January 2023 and that the maximum will increase each month of the year. As far as I'm concerned, this means that the largest (ie, the maximum retirement benefit for 2023) will therefore occur in December 2023 and that amount is $1,316.41.

As to the last question that you're asking, this deals with the issue that once a benefit is in pay it will keep pace with price increases as measured by the CPI (an increase of 6.5% for 2023), but if you defer a benefit from one year to the next any increase will depend on how much the 5-year average YMPE increases (3.58% for 2023, from $59,700 to $61,840). This is the reason why if you start your CPP in Dec 2022, the amount after indexing will be more than what you will receive if you start your CPP in January 2023.

I have seen years when the escalated maximum for one year was higher than the next year's maximum (like 2022/2023) and I've seen other years where the opposite happened (like 2021/2022), but I don't recall any year where they were the same.
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I have a question related to income tax and CPP. This past summer, I changed job and now working for a company in Quebec though I still reside in Ontario. Since payroll is now out of QC, I noticed my paystub now has deductions such as QPP contribution, QC/PPP premium and QC/Income tax etc. My employer is also contributing to QPP. So there is no CPP anywhere. Does that mean I no longer contribute to CPP? Or at year end tax return, I can transfer these QPP from my employer & myself to CPP? Thanks
[OP]
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mkl38s wrote: I have a question related to income tax and CPP. This past summer, I changed job and now working for a company in Quebec though I still reside in Ontario. Since payroll is now out of QC, I noticed my paystub now has deductions such as QPP contribution, QC/PPP premium and QC/Income tax etc. My employer is also contributing to QPP. So there is no CPP anywhere. Does that mean I no longer contribute to CPP? Or at year end tax return, I can transfer these QPP from my employer & myself to CPP? Thanks
Hi mkl38s - You don't have to do anything to change the contribution from QPP to CPP and as long as you are living outside of Quebec when you apply for a benefit, your pension will be calculated under CPP rules and using all of your CPP and QPP contributions. So aside from paying a slightly higher QPP contribution rate, there is no other impact to you.
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May 3, 2015
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Can monthly OAS be split and deposited in 2 different bank accounts.
[OP]
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Grahamk wrote: Can monthly OAS be split and deposited in 2 different bank accounts.
Nope.
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Jan 2, 2023
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Yes, Thank-you.
I'm just starting OAS-GIS. How much employment income can I make this year without GIS amounts changing next year?
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DebAurora wrote: Yes, Thank-you.
I'm just starting OAS-GIS. How much employment income can I make this year without GIS amounts changing next year?
You can also earn up to $5,000 and still receive the full benefit amount if you’re employed or self-employed. When earnings fall between $5,000 and $15,000, your GIS payment will be reduced by 50 cents for every dollar of income you make.

Source: Spring Financial article
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yvrwindsor wrote: You can also earn up to $5,000 and still receive the full benefit amount if you’re employed or self-employed. When earnings fall between $5,000 and $15,000, your GIS payment will be reduced by 50 cents for every dollar of income you make.

Source: Spring Financial article
Hi - The excerpt that you have used from Spring Financial is misleading at best or simply wrong at worst. It's true that the first $5,000 of income from employment or self-employment is exempted and won't affect someone's GIS at all. It's also true that income from those same two sources from $5,000 to $15,000 is excluded by 50%, but that means that the impact on GIS is only a reduction of approx 25 cents on the dollar (or possibly 37.5% on the dollar, depending on where they are in what GIS rate table). To further clarify this issue, most income sources reduce GIS by 50 cents on the dollar, but since only half of any earnings form employment or self-employment between $5,000 and $15,000 count as income, the reduction to GIS is only half of the normal reduction.
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Jan 2, 2011
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Hello there,
I contributed into CPP from age 18 until I was 43 years old. Since then I’ve been paid in dividends (last 7 years) and paid nothing into CPP. Looking at taking CPP at age 60 (10 years from now).

If I continue to not pay into CPP for the next 10 years (17 years total) how much does it effect my payout?

The current estimate of my payout right now at age 60 is $600/month.

Thanks,
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scooter_alberta wrote: Hello there,
I contributed into CPP from age 18 until I was 43 years old. Since then I’ve been paid in dividends (last 7 years) and paid nothing into CPP. Looking at taking CPP at age 60 (10 years from now).

If I continue to not pay into CPP for the next 10 years (17 years total) how much does it effect my payout?

The current estimate of my payout right now at age 60 is $600/month.

Thanks,
Hi Scooter - In 2023 dollars, your actual CPP retirement pension at age 60 will decrease from the current estimate of $600 to approx $499.50. Can any of my regular readers explain this calculation?
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May 13, 2021
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Hi @Dogger1953

So I worked many years in the US (I think I have 32 points as per SSA statement) and 2 years in Australia. It means those are the years I was unable to work in Canada and did not pay into CPP. As a result I may not get max benefit out of CPP as I would have worked well below 35 years in Canada.

What should be my strategy to get the best out of this situation. Is it possible to transfer those years to Canada and get CPP credit for those years? US may not pay me as per my understanding as I need min 40 points to be eligible for retirement payments. I can probably let go Australia but US is a major chunk.
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sharetik wrote: Hi @Dogger1953

So I worked many years in the US (I think I have 32 points as per SSA statement) and 2 years in Australia. It means those are the years I was unable to work in Canada and did not pay into CPP. As a result I may not get max benefit out of CPP as I would have worked well below 35 years in Canada.

What should be my strategy to get the best out of this situation. Is it possible to transfer those years to Canada and get CPP credit for those years? US may not pay me as per my understanding as I need min 40 points to be eligible for retirement payments. I can probably let go Australia but US is a major chunk.
Hi sharetik - There is nothing that you can do to increase your CPP benefits, except to continue working and contributing to CPP. Because of your CPP contributions though, you should be able to qualify for US social security and possibly even Australian benefits by "totalizing'' your contributions under the social security agreements that Canada has with both of those countries (and many more). Here are links to those two agreements: https://www.canada.ca/en/services/benef ... tates.html and https://www.canada.ca/en/services/benef ... ralia.html
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rfduser123 wrote: Thanks for the thread, very informativve.

A retired Canadian couple at early 60 have the following CPP contributions to date:
- the husband has a CPP pension (estimated by age 65) of $1200;
- the wife has a CPP of $400, (child rearing credit not included yet in the calculation).

Neither plan to continue working and making contributions.

If they decided to divorce, can they request "equalization"? Will this request be made before they apply to the CPP?

When one of them die, is the divorced spouse still entitled for survivor benefits?
Hi rfduser - First, they can certainly apply for "CPP credit splitting" if they divorce or even if they are just separated. This can be done either before or after one or both of them are receiving benefits. I should caution you though, that although a credit split will "equalize" their pensionable earnings during the period of time that they lived together, it likely won't equalize their benefits, especially due to the child-rearing provisions. The most likely outcome is that the husband's CPP benefits will decrease by more than the wife's CPP benefits will increase. Sometimes a lot more!

Second, if they are just separated they could still be eligible for survivor's benefits, but not after they divorce.
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Aug 21, 2016
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Thank for the assistance in advance. If I've maxed my 2022 CPP contribution with my employer early last year, but then also maxed the employee and employer portion later in the year from my private corp salary, is there any way to recover the excess paid into CPP? I understand that the employee portion will be refunded when I file my taxes so I'll get that ~$3500 back, how about the extra ~$3500 employer portion I paid through my corp? If it is not refundable, does it benefit me in any way?
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fern54 wrote: Thank for the assistance in advance. If I've maxed my 2022 CPP contribution with my employer early last year, but then also maxed the employee and employer portion later in the year from my private corp salary, is there any way to recover the excess paid into CPP? I understand that the employee portion will be refunded when I file my taxes so I'll get that ~$3500 back, how about the extra ~$3500 employer portion I paid through my corp? If it is not refundable, does it benefit me in any way?
Hi fern - There's no way to get the money refunded under the CPP legislation and yet it won't benefit you in any way when your CPP benefit is calculated. The only option that I could think of would be if you could retroactively pay yourself in dividends rather than salary, but I don't know whether that is possible under the Income Tax Act or not.

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