Section 12 – Social Programs and Benefits

Quebec Pension Plan and Canada Pension Plan

Contributions

Employer and employee QPP/CPP contributions are as follows3:

2023 QPP CPP
  • Maximum insurable earnings
  • Basic annual exemption
$66,600
$3,500.00
$66,600
$3,500.00
Contributions:
  • Employer

Rate
Maximum

 

6.40%
$4,038.40

 

5.95%
$3,754.45

  • Employee

Rate
Maximum

 

6.40%
$4,038.40

 

5.95%
$3,754.45

  • Self-employed worker

Rate
Maximum

 

12.80%
$8,076.80

 

11.90%
$7,508.90


3 For additional information, go to the following pages: CPP Retirement Pension – Overview and Your retirement pension under the Québec Pension Plan.

Cessation of QPP contributions
As of January 1, 2024, workers will cease to contribute to the QPP as of January 1 of the year in which they reach age 73, and workers will be allowed to choose to cease contributing to the plan as of age 65, if they continue to work and withdraw their retirement pension.4

Benefits (pension benefits)

Generally, Canadian taxpayers are eligible for normal QPP and CPP pensions at age 65.

Calculation of and adjustments to Retirement Benefits

The QPP pension is calculated based on the average contributions to the plan from age 18 to the year the individual applies for the pension, whether or not the individual worked during that period. This calculation excludes the equivalent of seven years (in months) of the lowest contributions.5 So, for example, for an individual who receives his/her pension at age 65, the contribution period is 47 years (65 – 18). Excluding the seven years with the lowest earnings, the pension will be calculated on the average of the contributions made over the 40 years. The individual will be entitled to the maximum pension if, during those 40 years, he/she earned income at least equal to the maximum pensionable earnings. If not, the amount of the pension will be reduced accordingly.

Moreover, when retirement benefits begin before age 65, the benefit amount is reduced by 0.6% 6 for each month between the beginning of the payments and the 65th birthday. Accordingly, a pensioner who is entitled to the maximum benefit will have the benefit amount reduced by 36% if he or she decides to retire at 60 years of age. 7

Similarly, for the purposes of both plans, the benefit that begins to be paid after age 65 is increased by 0.7% for each month following the 65th birthday, up to a maximum increase of 42% for a deferment period of five years.

The Retraite Québec SimulR and CompuPension tools help you estimate your retirement income.

These adjustments determine the benefit amount that will be paid for the entire retirement period 8 (subject to the potential supplement, as described below). Therefore, they have an impact on the decision regarding the time to claim the benefit because, by requesting the amount at age 65 instead of 60, you avoid the reduction but also lose out on generating this income during five years. Also, delaying the benefit until age 70 (Age 72 for the QPP as of January 1, 2024) increases the amount.

Aside from the economic factors, opting for an early, normal or late pension must take account of personal factors such as your health, marital status, age of your spouse and your income from other sources. Make sure that you have all the necessary information before making a decision.


4 CPP contributions stop at age 70. 
5 Some other years, for example when a parent stays home to care for a preschool child may also be excluded from
the calculation. Furthermore, from January 1, 2024, low working income e 
6 For QPP purposes, the reduction factor varies according to the amount of the pension benefit; it is 0.5% if the benefit amount is very low and reaches 0.6% when the pensioner is entitled to the maximum benefit. 
7 I.e., 0.6% X 60 months.
8 Amounts indexed annually.

The following table presents QPP and CPP benefit amounts for Canadian taxpayers based on the different applicable situations8:

Benefit amounts QPP (2023)
$
CPP (2023)
$
Retirement Benefits
Maximum monthly benefit, starting at:
  • age 60
  • age 65
  • age 70 and older
836.20
1,306.57
1,855.33
836.20
1,306.57
1,855.33
Death Benefits
  • Single amount
2,500.00 2,500.00
  • Maximum monthly surviving spouse benefit:
  • under age 45, without dependent children
  • under age 45, with dependent children
  • under age 45, disabled, with or without children
  • age 45 to 64
  • age 65 or older10
649.20
1,024.88
1,064.81
1,064.81
804.13
707.95
707.95
707.95
707.95
783.94
  • Monthly orphan’s pension
281.72 281.72
Severe and Prolonged Disability Benefits
  • Maximum monthly benefit11
  • Monthly benefit of disabled
    pensioner’s child
1,537.13
89.45
1,546.0512
281.72

Combined pension

When an individual receives a retirement or disability pension in addition to the surviving spouse’s pension, the amounts are paid in a single payment (combined pension). Generally, the combined pension is subject to the maximum amount determined by law, which is not necessarily equal to the sum of both pensions. The amount of the surviving spouse’s pension could therefore be reduced.


8 Amounts indexed annually. 
9 Benefits are indexed annually as of January 1. The QPP monthly orphan’s benefit and the monthly benefit of a disabled pensioner’s child are payable until age 18. The CPP pays such benefits to a child under age 18, or under age 25, if he/she is studying full-time.
10 As of age 65, if an individual receives the maximum pension benefit for a year, the surviving spouse’s pension will be permanently discontinued (QPP).
11 This amount is composed of $558.71  ($558.74 for CPP), which is identical for all beneficiaries (for pension benefit recipients, the amount is added to the benefit) and a variable amount depending on the work income registered in the name of the QPP contributor.
12 The maximum monthly CPP disability benefit increases each month. In 2023, the monthly amount in January is $1,538.67 and increases to $1,546.05 in December.

 

QPP Retirement Pension Supplement and CPP Post-retirement Benefit

The QPP and CPP allow workers who are already receiving benefits to continue to contribute to obtain a supplement, i.e., the QPP retirement pension supplement and the CPP post-retirement pension. Each year of work can therefore provide a contributing beneficiary with an additional benefit, payable for life. Like the basic pension, the amount of this supplement is indexed annually according to the cost of life.

It is not necessary to register for this benefit as it is paid automatically in the year following the contribution payments. Beneficiaries working in Quebec must contribute to the QPP when their employment income exceeds the general exemption of $3,500. Beneficiaries aged 60 to 65 who work outside Quebec must still contribute to the CPP to finance the post-retirement benefit, whereas those aged 65 or more but less than 70, may choose to contribute or not. Worker and employer contributions are based on the same rates as those applicable in the regular plan.

Continuing to work after you have begun receiving your QPP and CPP pension can allow you to increase your pension amount for subsequent years.


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