Canada Pension Plan (CPP)
Canada Pension Plan (CPP) retirement pension is monthly, taxable advantage that accommodate stable income to the retired people of Canada. Its design covers and replace portion of the candidate’s pre- retirement income. To qualify, the candidate must have contributed to the CPP during their working years. The amount of the pension depends on your contributions. Once eligible, you will receive CPP payments for the rest of your life. You can start receiving benefits as early as age 60.
Qualification Requirement
To Qualify successfully for Canada Pension Plan candidates must fulfill the following requirements:
- Candidate must be at least 60 years of age.
- Candidate must have made one successful contribution to CPP.
Candidates can make Valid Contributions through their pre-retirement income, or any other credits received from a former spouse when the relationship ended.
Working Permission
Candidates have no restriction of doing any type of work while they are receiving a CPP retirement pension. The amount of pension is not deducted or reduced due to work. But on the other hand, working while receiving retirement pension can increase pension through CPP post-retirement benefit.
Specific Age for Contributions
Candidates who are under age 70, working and receiving retirement pension can also contribute in CPP. Each year’s contribution in CPP will eventually become post-retirement benefit and will increase retirement pension. Candidates can stop this contribution at the age of 65. These contributions will automatically stop when the candidate reaches the age of 70 years.
Policy for Québec
If any candidate lived and worked in Québec, then this section is relevant. Canada Pension Plan and Québec Pension Plan work together to ensure that all contributors receive pension plan. If any of the below points applies to you:
- You have worked in Québec.
- You are living in Québec and worked in Québec and in at least one other province/territory.
- You are currently live outside Canada, you have worked in Québec, and your last residence was Québec.
Start Pension
The standard age of starting pension is 65 years, but candidate can start receiving pension willingly at the age of 60 years and you can also start at the age of 70 years. If a candidate prefers to start pension early, the amount of pension will be small but will eventually grow.
CPP Quiz
Candidates can check if they are ready for retirement by takin CPP quiz.
Retroactive Payments
You can get retroactive CPP retirement pension payments for up to 12 months (11 months + the month of application) if you apply after you turn 65. Your monthly benefit amount will vary depending on when you decide to start receiving it.
Effect of Age
Payments will drop by 0.6% every month (or 7.2% annually) if you begin before the age of 65, and by up to 36% if you begin at age 60. Payments will rise by 0.7% every month (or 8.4% annually) if you begin after age 65. If you begin at age 70 (or later), the increase will reach a maximum of 42%.
Personal Circumstances
Candidates must consider important factors such as health, financial statement and plans for retirement before starting to receive retirement pension. If any candidate is healthy, can work or has any other source of income may start receiving retirement pension later. This will benefit in increasing pension amount.
Immediate Need
On the other hand, if any candidate has less intention of working, wants to pay any debts or other liabilities or needs funds for retirement plans, then candidate may choose to start receiving pension before age 65. This will result in a smaller monthly payment.
Calculation of CPP Payment
The amount of CPP Payments depends on the age you start your pension, amount and time duration of your contribution in CPP and amount of average earnings of candidate throughout working life.
For Year 2025
For 2025, the maximum monthly amount you can receive if you begin your pension at age 65 is $1,364.60. In July 2025, the average monthly payment for a new retirement pension at age 65 was $815.00. The exact amount you’ll receive will depend on your individual circumstances, up to the maximum limit.
Retirement Income Calculation
Candidates can get an estimate of retirement income by signing in to your My Service Account. You can also get help from Canadian Retirement Income Calculator.
Other Situations
Factors like contribution history, the age at which you start receiving your pension, periods of low or no earnings, and whether you’ve contributed to CPP while receiving disability benefits or child-rearing provisions can affect pension amount. Each of these factors can either increase or reduce your pension amount based on your unique situation.
Working Scenario
Post-Requirements benefit can be obtained through working while receiving retirement pension until age 70 years and contributing in CPP. Every year post-requirement benefit will increase based on your contribution. Candidate can stop contribution at the age of 65.
Low or No Earning Period
If you have years with low or no earnings, we will exclude up to 8 of your lowest-earning years when calculating the base portion of your CPP retirement pension. This “drop-out” provision helps increase your pension amount by removing those lower-income years from the calculation.
Enhanced Portion
The enhanced portion of your retirement pension is based on your contributions to the CPP enhancement and is calculated using your highest 40 years of earnings. This enhancement only applies if you have worked and contributed to CPP after January 1, 2019.
Divorce or Separation
In the case of Divorce or Separation Credit Splitting allows the candidate to divide CPP contributions equally between the candidate and their spouse.
How to Apply
Here the complete procedure to apply for the pension plan is mentioned in detail.
- Ensure Your Eligibility
First, Candidates must check their eligibility or qualification through consulting the upper mentioned Eligibility Criteria in this article. Carefully look through all the requirements to qualify for any pension plan. Specially if any candidate has worked in Québec, they must visit criteria specified for Québec.
- Time to Start Pension
Candidates must choose the best time to start pension by accessing their needs. Candidates will be asked to start pension at different times as this article clearly mentions all the details in the “When to Start Pension” section. Whatever time suits the candidate pension will start from that time.
- Procedures to Apply
Candidates must make a complete application for applying for pension plan. They can choose one of two applying procedures for this reason. The first method is Online Procedure, and the Second is Paper Application.
Paper Application
Candidates must have to complete and send the finalized paper application if they are applicable to any of the following:
- Candidate was receiving CPP disability benefit before the age 65 or was denied for this benefit.
- CPP children’s benefit was received by the candidate between the ages 18 to 25.
- Candidate is receiving CPP survivor’s pension by qualifying through an International Social Security Agreement.
- The candidate lives outside Canada.
- The candidate has an official third party to manage CPP account like power of attorney or trustee.
Candidates can download the application by visiting this link: https://catalogue.servicecanada.gc.ca/content/EForms/en/Detail.html?Form=ISP1000
Online Application For CPP
Candidates must have “My Service Canada Account (MSCA)” to apply online for pension plan. If any candidate does not have this account, they must first register for new account by visiting the official link and entering all the required details:
https://www.canada.ca/en/employment-social-development/services/my-account.html
MSCA Account
MSCA account allows candidates to access the estimation of pension they will receive. Once MSCA account is working, candidate must log in and create an application for the pension plan. After entering the complete information submit the application. Once you have submitted the application, you’ll be immediately notified that your application has been received and will be assessed.
Processing Time
Processing procedure is started as soon as application is received by Service Canada. It takes almost 120 days to receive notification regarding Service Canada’s decision about application. Incomplete applications can lead to delays in processing time.
- Application Submission
Application must be submitted once completed, either online through MSCA account or submitting the paper application at Service Canada office or you can send mail also. Complete office address and mailing address are mentioned on the official website CPP.
- Review Application
Application can be reviewed by visiting and logging in to MSCA Account and selecting the “Application Status” link. The candidate can also contact Service Canada for this purpose. If there are any errors or omissions, they can be corrected but with some penalty.
After You Apply
You will get payments for the remainder of your life after you begin receiving your CPP retirement pension. If the Consumer Price Index indicates an increase in the cost of living, your monthly payment will rise in January of each year. If the cost-of-living declines, your monthly payment won’t.
Payments
If the candidate has chosen a direct deposit service, they will receive payment directly to their bank account every month. Otherwise, if the candidate has not decided for direct deposit a cheque will be mailed to them during the last 3 business days of each month.
Taxes
Your CPP retirement benefit is taxable and counts as income. Taxes are not taken out automatically. By logging into your My Service Canada Account or completing the Request for Voluntary Federal Income Tax Deductions CPP/OAS (ISP3520CPP) form and submitting it to us or dropping it off at a Service Canada office, you can request that federal income tax be withheld from your monthly payments.
Tax Services Office
You might have to pay your income tax every quarter if you don’t request monthly tax deductions. Get in touch with the Tax Services Office of the Canada Revenue Agency (CRA) for additional details.
Tax Slips
A T4 or NR4 tax slip showing the amount you received the year before will be sent to you early each year. This form must be submitted with your yearly income tax return, either in person or by mail. Whereas NR4 tax information slips are for people who live outside of Canada, T4 tax information slips are for Canadian residents.
Disagreement With Decision
You can request a review of the decision if you don’t agree with it. Within ninety days of receiving your decision letter, you must submit a written request for this review. Service Canada employees who were not involved in the initial decision about your application will evaluate it. There are different ways to make your request for reconsideration. Reconsiderations can take several months to complete, depending on the case.
Cancel CPP Pension
After you start receiving your CPP retirement income, you have up to 12 months to cancel it. The cancellation must be requested in writing. Additionally, you are required to repay all your CPP income.