CRA has made several revisions to the CPP retirement pension. These changes do not affect anyone who is currently receiving CPP retirement benefits and is over 70 years of age at the end of 2011.

Currently, you may start receiving the CPP retirement benefits if you are at least 65 years old or between the age of 60 and 65 and ceased working.  The monthly CPP retirement benefit will increase if taken after age 65 and decrease if taken before. Receiving CPP retirement benefits is not automatic.

You should apply for your CPP retirement benefits once having reached the age of 70 at the latest, or risk losing them.

The changes are as follows:

  • Starting in 2012, you will be able to start receiving reduced CPP retirement benefits without having to stop working if you are between the ages of 60 and 65.
  • In 2012, if you are working in Canada and are under the age of 65, you and your employer will have to make CPP contributions based on your earned income (regardless of whether or not you are receiving CPP retirement benefits).
  • If you are receiving CPP benefits, any contributions to CPP will go towards a new benefit known as the Post-Retirement Benefit (PRB). The contributions will not affect your CPP retirement benefit, but you will receive the PRB in addition. The PRB benefit will be paid to you in the year following your contributions, starting in 2013.
  •     If you are working in Canada and are at least 65 years of age but under 70, you and your employer will still have to make CPP contributions even if you are receiving CPP retirement benefits. As noted above, the contribution will go towards the PRB.
  •     If you are over 65 and still working, you may elect to stop contributing to CPP by submitting Form CPT30 – Election to Stop Contribution to the Canada Pension Plan or Revocation of a Prior Election. The CPT30 should be completed before December 31, 2011 if you wish to elect out of contributing to CPP in 2012 and subsequent years. If the form is not completed, your employer will be required to withhold CPP from your earnings.

The form needs to be submitted to the Winnipeg Tax Centre, and a copy provided to your current and any future employer. The election will continue until you send in a revocation or you reach the age of 70.

For further advice or assistance with these or any other financial issues, please contact a Millards representative at (519) 759-3511.