Income Security Programs · SOCIAL DEVELOPMENT CANADA Old Age Security Benefits • Old Age...
Transcript of Income Security Programs · SOCIAL DEVELOPMENT CANADA Old Age Security Benefits • Old Age...
SOCIAL DEVELOPMENT CANADA
CanadaCanada’’s Public Pension Systems Public Pension System
• Old Age Security
• Canada Pension Plan
• International Social Security Agreements
SOCIAL DEVELOPMENT CANADA
The 3 Levels of CanadaThe 3 Levels of Canada’’ssRetirement Income SystemRetirement Income System
Private Savings +Employer Pensions
Canada Pension Plan Québec Pension Plan
Old Age Security
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Old Age SecurityOld Age SecurityBenefitsBenefits
• Old Age Security pension
• Guaranteed Income Supplement
• The Allowance and Allowance for the Survivor
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OAS PensionOAS Pension
Based on:
• Age - 65• Legal Status• Years of
Residence
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Full OAS PensionFull OAS Pension
Residence RequirementResidence Requirement• 40 years of living in Canada after 18Some may qualify under alternate rules:• By meeting the last 10 year rule• By meeting the “3 for 1” rule
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Partial OAS PensionPartial OAS PensionResidence RequirementResidence Requirement• 10 years of living in Canada• 20 years of living in Canada,
if applying from abroad
Rate = 1 for each year in40 Canada after age 18
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International AgreementsInternational AgreementsProtect social security rights
Help meet eligibility requirements
Current
Agreements:
40+ countries
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International AgreementsInternational AgreementsFor OAS benefits
• Help to meet residence rules
* Total time in Canada and other country
* Prorate payment based onyears in Canada
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OAS PensionOAS Pension• Taxable benefit
• Higher income earners subject to a repayment of benefits
• Payable outside Canada with 20 years of Canadian residence
• Subject to non residence tax
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Income Tested BenefitsIncome Tested BenefitsThe Old Age Security program
provides
extra help to low income seniors:
• Guaranteed Income Supplement (GIS)
• The Allowance
• Allowance for the Survivor
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Guaranteed Income Guaranteed Income Supplement Supplement -- GIS GIS
• For low income seniors in Canada
• Monthly benefit added to OAS pension
• Amount based on income, marital status, and OAS rate
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AllowanceAllowancePaid to the younger spouse/partner
of OAS pensioner if:
• age 60 to 64• couple’s
income is low• residence rules
are met
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Allowance for the SurvivorAllowance for the Survivor
Paid if:• age 60 to 64• a survivor• income is low• residence rules are
met
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Income Tested BenefitsIncome Tested Benefits
• GIS, Allowance, Allowance for Survivors benefits are not taxable
• Allowances are not paid past 65 - they are replaced with the OAS pension
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Canada Pension PlanCanada Pension Plan
• Began January 1,1966• Work related plan – contributions are
compulsory and earnings related• Québec has own similar plan – QPP• CPP benefits can be paid outside
Canada
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Canada Pension PlanCanada Pension Plan• Workers pay into CPP during
earning years
• To protect against future loss of
income due to retirementretirement
disabilitydisability
deathdeath
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CPP BenefitsCPP Benefits•• RetirementRetirement
•• DisabilityDisability
- Children’s benefits
•• SurvivorSurvivor
- Death benefit
- Survivor pension
- Children’s benefits
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Canada Pension PlanCanada Pension Plan
Pension calculations based on:
• Contributory Period• CPP recorded earnings & contributions
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Contributory PeriodContributory Period
Starts Starts ------------------------------• January 1966
• month after 18th birthday
EndsEnds• month before
Retirement pension
• month age 70
• month of death
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CPP DropCPP Drop--Out ProvisionsOut Provisionsdisabled children
under 7over 65 15%
START START ................................................................................................ ENDEND
Period in receipt of CPP disabilityPeriod raising children under age 7Over age 65 periods replace earlier periods15% lowest earning years in contributory period
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Canada Pension PlanCanada Pension Plan
Statement of ContributionsStatement of Contributions
• Sent periodically• Available annually• New – can register for
online access
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2005 Contributory Earnings2005 Contributory Earnings
In 2005
Ceiling is YMPE $ 41,100
Floor is YBE - $ 3,500
Maximum Maximum = $ 37,600 Contributory EarningsContributory Earnings
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Credit SplittingCredit SplittingWhen a marriage or common-law union ends former spouses or partners may split their CPP earnings for the years they lived together
• permanent change to record of earnings
• can affect current or future entitlement
• time limits on some applications• waiver allowed in some provinces
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CPP Retirement PensionCPP Retirement Pension• Need one valid
contribution
• Retirement Choices
Early:Early: age 60 to 65
StandardStandard: age 65
LateLate: age 65 - 70
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EarlyEarly Retirement PensionRetirement Pension
• must have stopped or stopped or substantially stopped worksubstantially stopped work
• pension is reducedreduced by 0.5% for each month under age 65
• no change at 65
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Late Retirement PensionLate Retirement Pension
•• nono need to stop work
• pension is increasedincreased by0.5% for each month over age 65
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Retirement Pension Retirement Pension SharingSharing
• spouses or common-law partners may share their Retirement pensions
• both must be at least age 60
• both must have claimed their Retirement pensions, unless one person has never contributed to CPP
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CPP Disability BenefitCPP Disability BenefitRules:
• Under age 65
• Paid long enough and recently enough
• Disability must be both severe and prolonged
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ChildrenChildren’’s Benefits Benefit
A child of the disabled contributor• under 18
or• 18 to 25, attending full time school• flat rate
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Survivor BenefitsSurvivor Benefits• Death Benefit• Survivor’s Pension• Children’s Benefit
Earnings requirements for deceased:
• 1/3 of years in contributory period up to maximum of 10 years
• Contributions in not less than 3 years
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Death BenefitDeath Benefit• lump sum benefit
• maximum of $ 2,500
• paid to estate, person paying for funeral, survivor, or next-of-kin
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CPP SurvivorCPP Survivor’’s Pensions Pension• Paid monthly to the survivor of
the deceased contributor
• legal spouse or common-law partner
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ChildrenChildren’’s Benefits Benefit
A child of the deceased contributor• under 18
or• 18 to 25, at school
• payment is a flat rate
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International AgreementsInternational AgreementsFor CPP
• Help to meet eligibility rules for Disability + Survivor benefits
* Total time – work periods
* Prorate payment
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Taxable BenefitsTaxable Benefits
• CPP benefits are taxable
For those living outside Canada
• non-resident tax varies with country of residence
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Need More Information?Need More Information?Call toll free:Call toll free:
1 800 2771 800 277--99149914 EnglishEnglish
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1 800 255-4786 TDD/TTY
Visit our web site at:Visit our web site at:servicecanada.gc.caservicecanada.gc.ca