How to apply for Canada Pension Plan (CPP) Retirement Benefits?

What is Canada Pension Plan?

Canada Pension Plan has been one of the contributory and income-related social safety measures in this country. It was meant to help contributors who retire, get ill, or die. Key features of the Canada Pension Plan include –

• Contributions

Employers together with Canadian workers contribute towards CPP during their working period of life. The contributions are proportional to the income with an annual ceiling.

• Earnings-Related Benefits

However, CPP benefits payable are proportionate to total contributions in their working years. In most cases, persons who contribute for many years and earn a lot of money get high benefits.

• Retirement Pension

Retirement pension becomes due from the age of 60 to 70 under the framework of the Canadian Pension Plan (CPP). The size of the pension is determined by the level of their previous incomes, the age at which they decide to collect the benefits.

• Disability Benefits

CPP Disability benefits can be received by those who suffer severe and longtime disability that prevents them from working. Applicants should have contributed enough into the CPP program in order to gain eligibility for this benefit.

• Survivor Benefits

The CPP pays survivor benefits to an eligible surviving spouse or common law partner if a contributor dies. such benefits derive from the earned salaries/contributions of a contributor.

• Post-Retirement Benefit

An additional post-retirement benefit available for people who stay and contribute to CPP after retiring with a CPP retirement pension is called CPP Post-Retirement Benefit.

• Death Benefit

On this note, a death benefit whereby an estate or the person who bears responsibility for the funeral becomes eligible for a one-time lump sum payment can be mentioned.

How do I apply for CPP benefits?

Your CPP pension does not begin automatically upon reaching the age of sixty-five. You need to apply to service Canada in order to start getting your monthly pension payment.

Before applying for CPP, certain conditions must be met -

• The rule states that you should have attained the minimum of one month after your fifty ninth birthday.
• One of its key requirements is that an individual should have contributed to the CPP at least one time.
• It is recommended that you should state the intention to start collecting your CPP pension within 11 months of this time.
• You comply with these requirements; it will run smoothly and allow you for the beginning of CPP payments.

Canada Pension Plan (CPP) benefits

Some of the main benefits of Canada Pension Plan are as follows –

• Retirement Pension

As for the CPP retirement pension, this is a monthly entitlement that can be accessed by anyone who has CPP contributions over the course of various working years. The size of such a pension depends on individual’s wages and payments into CPP during working years.

A person has an option of withdrawing from this pension at the age of 60 and adjust the amount in case of delayed withdrawal up to age 70.

• Disability Benefits

Disability benefits due to the chronic public policy for individuals with a profound and permanent disability that prevents them from working.

Participants should have made contributions towards the CPP for four out of the most recent six years, and for any period of over 25 years.

• Survivor Benefits

The surviving spouse or common law partner, as in the case of a deceased CPP contributor, is entitled to some survivor benefits. Benefit paid depends upon contributions made by and subsequent earnings of the deceased contributory. In addition, eligible surviving children may also get benefits.

• Child-Rearing Provision

Child-rearing provision also includes the deletion of some low-earning and zero-earning years from the CPP benefits calculation when a parent stays at home to care for children. The purpose of this is to take into account discrimination based on caregiving in career earnings.

• Death Benefit

On death of a CPP contributor, his/her estate or the person responsible for funeral expenses would receive one-time CPP death benefit.

• Post-Retirement Benefit

The post-retirement benefit gives an extra payment to those who are still working during or after receiving the retirement pension.

• Credit Splitting

With regard to credit splitting, married couples or those living together as a couple, who subsequently separate or divorce, should each receive equal amounts of CPP contributions as well as pension credits earned while they were still together.

The amount of CPP benefits is influenced by factors such as the individual's earnings, the number of years of contributions, and the age at which they start receiving benefits. It's important for individuals to monitor their CPP contributions, understand the eligibility criteria for each benefit, and apply for benefits when they become eligible.

When can I apply to get CPP benefits?

You can apply for Canada Pension Plan (CPP) benefits as early as one month after your 59th birthday. However, the normal age for starting your CPP retirement pension is 65. You have the flexibility to choose when to start receiving your benefits based on your individual circumstances. Here are some key points that you should know –

• Early Application: You can apply for CPP benefits as early as age 60. However, if you choose to start receiving your pension before the age of 65, your monthly payments will be permanently reduced by a certain percentage for each month prior to your 65th birthday.
• Normal Retirement Age: The standard age for receiving the full CPP retirement pension without any reduction is 65. If you start your pension exactly at age 65, you'll receive the full amount you're entitled to based on your contributions.
• Delayed Application: You also have the option to delay your CPP benefits until as late as age 70. In this case, your monthly payments will increase by a certain percentage for each month you delay beyond your 65th birthday, up until age 70.

To apply for CPP benefits, you can do so online through the Service Canada website, by mail, or in person at a Service Canada office. It's recommended to apply for CPP benefits at least six months before you want your pension to start.

How much amount will I receive in CPP benefits?

The amount you will receive in Canada Pension Plan (CPP) benefits depends on various factors, including your contributions to the CPP, your earnings throughout your working years, and the age at which you choose to start receiving your benefits. Here are some key points to consider –

• Contributions

The more you contribute to the CPP during your working years, the higher your CPP benefits are likely to be. The CPP is a contributory plan, meaning that the amount you receive is directly tied to your contributions.

• Earnings

Your average earnings over your contributory period will also impact the amount of your CPP benefits. Higher average earnings generally result in higher CPP benefits.

• Age of Retirement

The age at which you choose to start receiving your CPP benefits affects the amount you receive. You can start as early as age 60 or defer until as late as age 70. Starting earlier results in a reduction, while delaying can lead to an increase in your benefits.

• CPP Statement of Contributions

You can request a CPP Statement of Contributions from Service Canada, which provides an estimate of your CPP benefits based on your contributions and projected retirement age.

• Maximum CPP Benefits

There is a maximum limit to the CPP retirement pension. The maximum amount is adjusted each year. The actual amount you receive may be less than the maximum, depending on your earnings and contributions.

It's important to note that CPP benefits are designed to replace only a portion of your pre-retirement income. The goal is to provide a base level of income security during retirement.  In 2020, if you were a new recipient initiating the pension at age 65, the highest monthly amount attainable was $1,175.83. The average monthly amount for March 2020 stood at $696.56. The specific details of your situation will dictate the actual amount you receive, up to the maximum limit.

Information needed to apply for CPP benefits

Keep the following information handy before apply for CPP retirement benefits.

• Social Insurance Number (SIN)

Your Social Insurance Number is a crucial identifier for your CPP application. It is required to ensure accurate record-keeping and processing of your benefits.

• Banking Information

If you prefer direct deposit for receiving your CPP payments, provide your banking information. This ensures a secure and efficient method for transferring your benefits directly to your bank account.

• Spouse or Common-Law Partner’s SIN

If applicable, include the Social Insurance Number of your spouse or common-law partner. This information may be necessary for calculating certain CPP benefits or allowances.

• Child-Rearing Provision Documentation

If you are applying for the CPP child-rearing provision, which allows for the exclusion of low-earning years during the period of raising your children, you will need to provide additional documentation. This includes the SIN or birth certificate of your children, supporting your request to adjust the calculation of your CPP benefits.

Ensuring the accurate submission of these details is vital for a smooth CPP application process, allowing you to access the benefits you are entitled to based on your unique circumstances.

Two ways to apply for CPP benefits

1. You have the option to submit your Canada Pension Plan (CPP) application online through the Service Canada website. This online process involves two steps. Firstly, complete and submit your application electronically. Secondly, print and sign the signature page from Step 7 of the online application. This signed page must then be submitted to Service Canada. The signature page bears a date stamp indicating when you submitted your application online.
2. Alternatively, you can choose to print and fill out the CPP retirement pension application Form ISP1000. You can then mail this completed form to Service Canada or personally drop it off at a Service Canada office in your local area.