The Canada Pension Plan (CPP) retirement pension is a taxable monthly benefit that replaces part of your income upon retirement. If you are eligible, you will receive the CPP retirement pension for the rest of your life after you retire. To be eligible for the retirement pension, you must:
- Be at least 60 years of age, and
- Have made at least one (1) valid contribution to the CPP at the prescribed rate. (Valid contributions can come from work you performed in Canada, or from credits received from a former spouse or common-law partner after the end of that relationship.)
In Canada, the CPP is a mandatory social security plan for anyone earning CAD $3,500 or more per year who is under age 65. The CPP sets specific rules for mandatory contributions, including:
- The maximum pensionable earnings on which CPP contributions are based is CAD $64,900.
- The CPP contribution rate is a fixed percentage set by the Government each year. In 2022, this rate was 11.4%, split evenly between the employee and employer at 5.7% each, with total contributions capped at $3,499.80. If you are a business owner or self-employed, you must pay the full 11.4%, with total contributions capped at $6,999.60.
Note that to receive the Canada Pension Plan retirement benefit, you must submit an application to the Government of Canada and decide when you want your retirement pension to begin.
Once the Government receives your completed application, processing times are as follows:
- 7 to 14 days for online applications.
- Typically within 120 days for applications submitted by mail or in person at Service Canada.
- Typically within 120 days for applications submitted by mail.
Processing your application may take longer if a completed application is not received.
The monthly retirement benefit amount you receive is based on:
- Your average earnings throughout your working life;
- How much and for how long you contributed to the CPP;
- The age at which you decide to start receiving your CPP pension.
The standard age to begin receiving the pension is 65. However, you can start receiving it as early as age 60 (an early pension) or as late as age 70.
If you start receiving your pension early, your monthly amount will be smaller — for every year you take it early, the amount is reduced by 6%. For example, if you retire early at age 60 — five years earlier than standard — the reduction is 5 years x 6% per year = 30% of the standard pension amount. If you decide to start later, you will receive a larger monthly amount. Age 70 is when you can receive the maximum monthly amount, so there is no benefit to waiting past age 70 to begin your pension.
A number of other factors can affect the amount you receive, such as time taken off work to raise children; periods of low or no earnings; periods of disability, and so on. You may also continue working while receiving your retirement pension (up to age 70), and these contributions will be credited toward a post-retirement benefit that increases your pension going forward. The CPP retirement benefit amount will vary depending on each individual's circumstances. As recorded in 2022, the maximum monthly amount for a new recipient starting their pension at age 65 was CAD$1,253.59. The average monthly amount paid for a new retirement pension (starting at age 65) as of January 2022 was CAD$779.32.
CPP Retirement Benefit Application Procedure
You can choose to apply online or apply using a paper application.
A paper application requires:
- Application for a Canada Pension Plan Retirement Pension (ISP-1000)
- Certified true photocopies of the personal identification documents used to provide information on the ISP-1000 application;
- Consent to Communicate Information to an Authorized Person form (ISP-1603) (use this form if you are receiving assistance from another person with your application and want to authorize them to communicate with Service Canada on your behalf)
If you are applying for the CPP retirement benefit on behalf of another person because they lack mental capacity or cannot manage their own affairs, you will need:
- Certificate of Incapability form (ISP-3505) from a medical professional;
- Agreement to administer benefits under the Old Age Security Act and/or the Canada Pension Plan by a Private Trustee form (ISP-3506) (if you are an individual)
Once your file is complete, you may submit the above documents in person or by mail to the Service Canada office nearest to where you live or previously lived.
If you need our full-service application assistance, please contact Giang Le Notary Office for advice on the procedure and our service fees.
