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As we make our way through September, there are still a few federal benefit payments set to be distributed to Canadians this month, including payments from the Canada Pension Plan.
With the rising cost of living, it’s no surprise that many Canadians are looking for ways to make ends meet, particularly those in lower-income households. Whether it’s taking on extra shifts, cutting down on spending or exploring government benefits you may be eligible for, every bit helps.
It’s crucial to stay informed about the financial aid you might be eligible for, as government programs like the Canada Pension Plan (CPP) and Old Age Security can provide significant support, potentially ranging from hundreds to even thousands of dollars.
The CPP retirement pension is a monthly, taxable benefit that replaces part of your income when you retire. If you qualify, you’ll receive payments for the rest of your life.
Here’s a breakdown of everything you need to know about the Canada Pension Plan, including the upcoming September CPP payment and how much you can expect to receive.
How does the Canada Pension Plan work?
The Canada Pension Plan is a monthly, taxable benefit that provides income when you retire. You can start receiving it as early as age 60 or as late as 70. The longer you wait to start, the higher your monthly payments will be — but after 70, there’s no added benefit to waiting.
Once you begin receiving CPP, you’ll get payments for the rest of your life. Your monthly amount may increase each year based on the cost of living, and payments are deposited directly into your bank account each month.
More about the CPP
Does Quebec have its own pension plan?
Yes, Quebec has its own pension plan called the Quebec Pension Plan (QPP), which works similarly to the CPP.
If you have only ever worked in Quebec, or if you worked in Quebec at any point and still live here, you’ll receive retirement benefits through the QPP rather than the CPP. The QPP and CPP work together, so if you’ve worked both in Quebec and other parts of Canada, your contributions to both plans are considered when calculating your pension.
Similarly to the CPP, the QPP also pays out monthly, with the next payment date set for September 27.
More about the QPP
How to apply for Canada Pension Plan
To apply for the Canada Pension Plan, follow these steps:
- Check your eligibility — You need to be at least 60 years old and have made at least one valid CPP contribution (more on eligibility below).
- Choose when to start — You can begin your payments anytime between 60 and 70, but the later you start, the higher your monthly amount will be.
- Submit your application — Apply online through your My Service Canada Account, or by mailing in a paper application.
More about applying for CPP
Who is eligible for the Canada Pension Plan?
To qualify for the Canada Pension Plan retirement pension, you need to be at least 60 years old and have made at least one valid contribution to the CPP. These contributions can come from work you did in Canada or from credits transferred from a former spouse or common-law partner after a relationship ends.
You can also keep working while receiving CPP and even increase your benefits through the CPP post-retirement benefit if you’re under 70.
More about CPP eligibility
How is the Canada Pension Plan calculated?
Your CPP payment is calculated based on several factors, including:
- Your age when you start collecting CPP — the later you start (up to age 70), the more you’ll receive monthly.
- How much you contributed to the CPP during your working years and for how long.
- Your average earnings across your career — higher earnings usually mean higher payments.
Other factors, like low-earning periods, disability and raising children, can also impact your pension amount. For a detailed estimate, you can check your My Service Canada Account or use the CRA’s Retirement Income Calculator tool.
More about calculating CPP payments
How much does the Canada Pension Plan pay?
The amount you receive from the Canada Pension Plan depends on factors like your age, how much you’ve contributed and your average earnings over your career. For 2024, the maximum monthly payment for someone starting CPP at age 65 is $1,364.60. However, most people receive less, with the average monthly payment being around $816.52.
Your personal amount will vary, but you can always check an estimate of your payments through your My Service Canada Account.
More about CPP payment amounts
Is the Canada Pension Plan taxable?
Yes, the Canada Pension Plan is considered taxable income. Taxes aren’t automatically deducted from your CPP payments, but you can request that federal income tax be taken off each month by logging into your My Service Canada Account or by submitting a form.
If you don’t set up monthly deductions, you may need to pay your taxes quarterly. For those living outside Canada, a non-resident tax will automatically be deducted from your payments.
More about CPP and your taxes
When are the Canada Pension Plan payment dates?
The next CPP payment date is September 25, 2024.
The rest of the payments for 2024 are as follows:
- October 29, 2024
- November 27, 2024
- December 20, 2024
More about CPP payment dates
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