Quebec Pension Plan and Canada Pension Plan

Contributions

Employer and employee QPP/CPP contributions for 2013 are as follows:4

Contributions QPP CCP
  • Maximum pensionable earnings
  • Basic exemption for the year
$51,100.00
3,500.00
$51,100.00
$3,500.00
  • Maximum contributions:
    • Employer
    • Employee
    • Self-employed worker
Rate
Maximum
Rate
Maximum
Rate
Maximum
5.10%5
$2,427.60
5.10%5
$2,427.60
10.20%
$4,855.20
4.95%
$2,356.70
4.95%
$2,356.20
9.90%
$4,712.40

4 For additional information on the QPP, go to the Régie des rentes du Québec Internet site at www.rrq.gouv.qc.ca/en or the HRSDC site for the CPP at http://www.hrsdc.gc.ca/eng/retirement/index.shtml.
5 The rate will increase to 5.175% in 2014, 5.25% in 2015, 5.325% in 2016 and 5.4% in 2017 (rates doubled for self- employed workers). An automatic adjustment mechanism will be introduced starting in 2018.

Benefits

QPP and CPP benefits for 2013 are as follows:

Benefits QPP
$
CPP
$
Retirement Benefits
Maximum monthly benefit, starting at:
- age 60
- age 65
- age 70
708.75
1,012.50
1,437.75
684.45
1,012.50
1,437.75
Death Benefits
Single amount 2,500.00 2,500.00
Maximum monthly surviving spouse benefit:6
- 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 over
Monthly orphan’s pension7
495.83
800.76
833.18
833.18
607.50
228.66
556.64


556.64
607.50
228.66
Severe and Prolonged Disability Benefits
Maximum monthly benefit
Monthly benefit of disabled pensioner’s child7
1,212.87
72.60
1,212.90
228.66

6 Specific rules apply when the benefit is combined with a pension or disability benefit.
7 The QPP 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.

Adjustments to Benefits

Retirement benefits paid before age 65 are reduced according to a certain factor for each month between the beginning of the benefit payment and the 65th birthday. The monthly reduction factor applicable to CPP contributions claimed before age 65 is 0.54% in 2013 (0.56% in 2014, 0.58% in 2015 and 0.6% as of 2016). For QPP purposes, the reduction factor is 0.5% in 2013. As of January 1, 2014, this adjustment factor will vary according to the amount of the pension benefit; it will remain 0.5% if the benefit amount is very low and may reach 0.53% in 2014, 0.56% in 2015 and 0.6% in 2016 when the pensioner becomes entitled to the maximum benefit. Those born before January 1, 1954 are not affected by this change in Quebec.

Since January 1, 2013, 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 (maximum increase of 42% for a deferment period of five years). These changes will have an impact on the decision regarding the time to claim the benefit (see Section 8).

QPP supplemental retirement benefit and CPP post-retirement benefit

The QPP and CPP allow workers who are already receiving benefits under one of these two plans to continue to contribute to obtain a supplement, i.e., the QPP retirement benefit supplement and the CPP post-retirement benefit. It is not necessary to register for this benefit as it is paid automatically in the year following the contribution payments.

Quebec beneficiaries must contribute to the QPP when their employment income exceeds the general exemption of $3,500. Beneficiaries between age 60 and 65 who work outside Quebec must still contribute to the CPP to finance the post-retirement benefit, whereas those aged 65 to 70 may choose to contribute or not. Worker and employer contributions are based on the same rates as those applicable in the regular plan.