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Christian Farstad, CFA, CFP, FCSI is Wealth Advisor and Associate Portfolio Manager with ScotiaMcLeod in Vancouver specializing in Retirement Income Planning for private clients. Christian has been quoted in the Globe and Mail, Wall Street Journal, National Post, Vancouver Sun and Dow Jones Newswires. Christian is also an Olympic athlete in the sport of Bobsleigh. Sign up for his Retirement Income Tips Newsletter at Click Here

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A simple guide to Canadian Pension Plan and Old Age Security

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Canada Pension Plan (CPP)
The CPP is a federal program that provides pensions to qualified contributors in retirement. Any benefits paid by the CPP are taxable both federally and provincially. CPP operates throughout Canada. Quebec has its own similar but not identical program, the Quebec Pension Plan (QPP), which is closely associated with the CPP.

Who pays into the CPP?
With the exception of very few, every person in Canada who is over the age of 18 and is working pays into the CPP. Contributions are split equally between employers and employees. If you are self - employed, you are required to pay both the employer and employee amount.

How much do I pay into the CPP?
The amount you pay is based on your salary (self-employed contributions are based on your net business income). You pay contributions on your annual earnings between the minimum and a set maximum level (these are called your “pensionable” earnings). The minimum level is frozen at $3,500 while the maximum level is adjusted each January.

For 2009, the maximum level is $46,300 and contributions are 4.95% for both the employer and employee. As a result, the maximum employee contribution is $2,118.60.

When you file your personal tax return, the federal and provincial governments provide a tax credit for your CPP contributions. The Federal government credit is equal to 15% of your contribution.

How much CPP can I expect monthly?
In general, your retirement pension replaces about 25% of the earnings on which you paid into the CPP. The exact amount of your CPP pension depends on how much and for how long you contribute. For 2009 - the maximum CPP retirement pension is $ 908.75 per month if taken at age 65. CPP pensions are adjusted for inflation every January.

Should I take CPP early? Age 65? Age 70?
The age at which you decide to take your pension also affects the amount you receive each month. The normal age to start CPP is 65. However you can start receiving your CPP pension as early as 60 or as late as 70. By opting to take your CPP pension early, the pension will be reduced by 0.5% for each month the start date precedes your 65 the birthday to a maximum reduction of 30% at age 60. If you start receiving your pension before 65, you must have stopped working.

By opting to delay your CPP pension, the pension will be increased by 0.5% for each month the start dates surpasses your 65th birthday to a maximum of 30% at age 70.

Am I able to share my CPP pension?
Yes … you are able to share your pension with your spouse or common law partner equally if you are at least 60 years old and have both applied for retirement pensions. This could result in income tax savings if one spouse was in a lower tax bracket than other spouse.

What are other benefits that CPP offers?
Disability Pension - To receive a disability pension from CPP you must be disabled according to the terms of the CPP legislation (physical or mental disability which is both severe and prolonged), under the age of 65 and not in receipt of a CPP retirement pension.
For 2009 - the maximum CPP disability pension is $1,105.99 a month.
Death Benefit - A death benefit up to a maximum of $2,500 may be paid to the estate of a deceased contributor.
Other Benefits - Other CPP benefits include benefits for children of disabled parents or deceased parents and surviving spouse’s pension.

Old Age Security (OAS)
OAS is a federal government program that provides a basic amount of retirement income to all individuals who meet certain residency requirements. The amount of OAS that you receive is not dependent on your past employment or salary. Any benefits paid by the OAS are taxable both federally and provincially.

Who is eligible to receive OAS?
To receive OAS you must be:
•a Canadian citizen or legal resident of Canada,
•at least 65 years of age and,
•lived in Canada a minimum of 10 years after reaching age 18

How much can I expect from OAS?
From January to March 2009 - The maximum OAS pension is $516.95 per month or $6,203.52 yearly. OAS pensions are adjusted for inflation quarterly. In order to qualify for the maximum OAS pension, you must have lived in Canada (after reaching age 18) for at least 40 years.

If you have lived in Canada for more than 10 years but less than 40 years, you may be eligible for a partial pension.

What is the OAS clawback and when does it apply?
The OAS ‘clawback’ requires the repayment of OAS benefits by high-income earners. For 2009, the threshold at which the OAS ‘clawback’ starts is $66,335. If your net income (including OAS benefits) exceeds the threshold ($66,335), 15% of the amount of income above the threshold is deducted from the basic pension. Your OAS pension will be entirely clawed back if your net income exceeds $107,692. For example, if you had a net income of $90,914, your OAS pension would be reduced by 15% of the amount over the threshold. That means that your annual OAS pension will be reduced to $2,516.67 or $209.72 per month.

Written by Christian Farstad, CFA, CFP, FCSI a Wealth Advisor with ScotiaMcleod specializing in Retirement and Estate Planning. He can be reached at christian.farstad@scotiamcleod.com or (604) 737-3543.

There Are 158 Responses So Far. »

Comment by Robert Dixon on 19 February 2009:

Does the 10 year requirement for old age pension have to be consecutive or can it be a total of non-consecutive years?
Comment by christian on 19 February 2009:

No, the 10 requirement for old age pension does not need to be consecutive. If you have not lived in Canada for all of these last 10 years prior to approval you can still qualify for a full pension.

If you lived in Canada for the year immediately before you apply for OAS and prior to the last 10 years, you lived in Canada after age 18 at least 3 times as long as the total of your absences during the last 10 years you still qualify for a full pension.

If you don’t meet these qualifications you may qualify for a partial pension.

There are also International benefits available if you have lived or worked in another country, or are the surviving spouse or common-law partner of someone who has lived or worked in another country. Check the Service Canada website at http://www1.servicecanada.gc.ca/eng/isp/ibfa/intlben.shtml
Comment by Lydia on 6 March 2009:

I,m 60 years of age, I worked in my husband’s busness and he & I contributed to CPP. Currenty the business is ide with no income & I do not work any longer for him.

Now I want to apply for CCP benefits, my qustion is if I start working again in the future do I and my husbands bussnes need contribute to CPP ?
Do I continue collecting CPP? if I do work
Comment by Christian Farstad on 9 March 2009:

If you apply for CPP and start receiving benefits you may still work in the future and collect employment income. You would continue receiving the CPP benefits while working. Because you would be collecting CPP benefits you would not contribute to CPP any longer.
Comment by Glenn on 15 March 2009:

My wife only worked 10 months in canada during which she contributed during only last 5 weeks to CCP.after that she had serious accident and she is disable now from last years and is not working.she is currently 40 years only.can she be able to get CCP/OAS beneifts.where can she apply.
Comment by Christian Farstad on 16 March 2009:

I am very sorry to hear about your wife’s unfortunate accident. I hope that the information I give you here can be of some benefit to you.

The basic requirements to apply for CPP disability benefits are:
You must be under 65 years of age
You have stopped working because of a medical condition
In addition, you must have either paid into CPP at least four of the last six years
or
if you have paid into the CPP for at least 25 years and made valid contributions to the plan in three of the last six years

From your short note it sounds as if your wife does not qualify under these requirements.

There may be some exceptions to these basic qualification requirements. For example, in certain circumstances, people who have worked outside the country may receive benefits without fulfilling all the basic qualifications. You should contact Service Canada to discuss 1-800-277-9914.

Here is a link to the Service Canada website that gives more information and the forms required to apply for benefits. You are required to fill out the application and send to Service Canada. If you are rejected on your original application there is information on the Service Canada website regarding how to appeal the decision. http://www1.servicecanada.gc.ca/eng/isp/cpp/applicant.shtml#b

Sincerely,
Christian Farstad
Comment by Mike on 31 March 2009:

Hi, question about old age security.

Question #1:My family immigrated to Canada in 2000. My 65+ years old parents have visited home country for couple months then came back to Canada. I heard if the absence is less than 6 months. Let’s say 5 months, the absence is still count toward the living time in Canada. Is that correct?

Question #2, so they can’t not get full pension because they have not lived in Canada for 40 years. How much can they expect in terms of percentage of the maximum pension benefits? Thank you.

Mike
Comment by Christian Farstad on 3 April 2009:

Mike

You have two great questions here. The difficulty in answering is that more information is needed. Your parents do not meet the minimum qualification for Old Age Security because they have not lived in the country for a minimum of 10 years. They still may qualify for some pension depending on what country they emigrated from and whether that country has an agreement with Canada. There is also differences in how they qualify if your parents are sponsored or non-sponsored immigrants. I suggest you call Service Canada directly to discuss 1 800 277-9914 for service in English. They will help you go through the process.

It is a good idea to start the application process as soon as possible because it can take some time to get approve for complicated situations.

I hope this helps.

Sincerely,
Christian Farstad
Comment by MSHAH on 4 April 2009:

Hi Mike,

my parents came to canada in 2005 december as a immigrant i sponserd them. they have permenent resident card my father turn 65 years in 2007 they went to india for 1 year and no they return to canada. my question is now they have to live in canada for 11 years for eligible to get oas? is there any other govt. benifits for my parents they eligible for ? pls. let me know

Thanks

Megha
Comment by Lena on 14 April 2009:

Hi, I cannot understand what income is used for Old-age security calculation. On my 2007 income tax taxable income is $6,275, but on the old-age security paper it is $1,787?
Comment by Kevin on 29 April 2009:

My pension will be much higher than my spouse’s, as I’ll have a company pension in addition to CPP and OAS. When the calculation is done for the OAS clawbacks, will it be done on the basis of our combined incomes or will they be calculated independently? Does it matter that we’ll be splitting our income for tax purposes?
Comment by Christian Farstad on 30 April 2009:

Kevin

The income test for Old Age Security clawbacks is based upon your net income from your income tax. You are able to split income with your wife but you should plan this out very carefully with the help of a good retirement plan by a Certified Financial Planner. This plan should be reviewed with you accountant. Proper planning will help you minimize any OAS clawbacks.

Many people don’t realize how important proper planning is for income flow during retirement. Good for you for starting to plan ahead.

Sincerely,
Christian Farstad, CFA, CFP, FCSI
Comment by Kevin on 1 May 2009:

Will my wife’s UK pension result in a clawback of CPP or OAS for either her or me or can she “double-dip” without penalty? We’re thinking of purchasing pension years from the UK government, an option she has as a former citizen.
Comment by Jackie on 3 May 2009:

Hi, my parents currently are living in Hong Kong right now, they cannot afford to live here. They are 59 and 55 right now. I have been doing some research and i found out the maximum is $516.95 per person. So my mom and dad combined would only get a little over $1000. My question is, how will they pay for rent? I am prepare to subsidize some of their basic necessities in the future but how will they afford to live if something were to happen to me?
Comment by Kathy on 6 May 2009:

Hi,

I was married for 12 years of the 25 years I lived in Canada, then moved to the US where I’ve been living for the last 11 years. My husband and I have been divorced for many years. He is a Canadian and I was a landed immigrant. I don’t know if my landed immigrant status is still valid, as I did not fill out paperwork when I left Canada. Would I eligible for s portion of his pension? I am 61 and he is 63.
Comment by John Ghee on 13 June 2009:

I am 55, I lived in Canada for 25 years. Except for 1 full year of 1995, I never contributed to CCP or any retirement plan. I was always working as self employed or casual. I am now diabetic and tired to work. What kind of plan (assistance) am I eligible for?
Comment by Christian Farstad on 15 June 2009:

John:

You are in a difficult situation. Since you have not contributed to CPP in any form you are not qualified for a CPP disability pension at this time. You should call Service Canada directly to confirm at 1-800-277-9914. You will be eligible for some form of Old Age Security when you turn 65.

There are other types of assistance through Service Canada. Here is the link for those services http://www.pwd-online.ca/pwdcontent.jsp?&lang=en&contentid=28

I hope this helps you. All the best and good luck.

Sincerely,

Christian Farstad, CFA, CFP, FCSI
Comment by sue on 16 June 2009:

I have no cpp pension .. maybe i will get 13 dollars a month.. anyhow..someone told me that he shares his pension with his wife.. she would have only gotten 90 approx a month.. now she is getting 900 .. and he is getting 800 .. how is this possible..??? Does it mean a shorter pension time?
Comment by Christian Farstad on 17 June 2009:

Thanks for the comment. You do have the ability to split your CPP income with your spouse but there would be no net gain in the process. If a one spouse is getting $700 and the other $300 from CPP they do have the ability to split. The total income $700 + $300 = $1000 would be split in 2 so each would get $500. The reason you may want to do this is to minimize taxation but there is no real net gain from the CPP program.

Your friend may be referring to a private defined benefit pension plan that they are splitting in addition to the Canadian Pension Plan.

Sincerely.
Christian Farstad, CFA, CFP, FCSI
Comment by Dale Underhill on 1 July 2009:

I am applying for the Canada Pension Plan credit splitting, Can my ex wife inturn go after my Old Age Pension when I reach 65 in 5 years?
Comment by Christian Farstad on 2 July 2009:

Dale

Thanks for your note. The CPP can be split at divorce but Old Age Security normally can not. Your ex-wife can not go after your OAS when you reach 65.

Sincerely,
Christian Farstad, CFA, CFP, FCSI
Comment by pauline gonsalves on 3 July 2009:

my mom is 67 she came canada in 98 she is recieving she did apply for old age pension last year and she is only recieving 160.00 is it because she was not in canada for more than ten years when she applied is she only getting partial pension
Comment by Mary Navarro on 3 July 2009:

I was born in BC in ‘43 starting working at 17 moved to the States Dec ‘71 so 10 years of working after 18 yrs of age. Am I eligible for CPP; it is taxable in Canada - and reduced by 25%? I am eligible In Oct for US Social Security.
Comment by Christian Farstad on 6 July 2009:

Pauline

Thank you for your inquiry. Based on the information you have given me, the reason your mother is not receiving a full pension is because she has not lived in Canada for the full 40 years required to qualify for the full pension.

Here is how the Old Age Security pension works. A person who cannot meet the requirements for the full Old Age Security pension may qualify for a partial pension. A partial pension is earned at the rate of 1/40th of the full monthly pension for each full year lived in Canada after his or her 18th birthday. Once a partial pension has been approved, it may not be increased as a result of added years of residence in Canada.

You mother has qualified for a partial pension based upon here residency duration in Canada. You can call Service Canada at 1 800 277-9914 for further information.

Sincerely
Christian Farstad
Comment by Christian Farstad on 6 July 2009:

Mary

You may qualify for some level of payment from the Canadian Pension Plan (CPP). This depends on the income and nature of the employment that you had in Canada when you lived here. The CPP system is a credit system meaning that for each year you worked and contributed to the CPP system you build up credits. When you retire your total accumulated credits determine your level of CPP payments. Please phone 1 800 277-9914 to find out how many credits you may have earned and how to apply for your pension. This is a toll free number for the US and Canada.

The CPP pension is taxed and there would normally be 25% withholding tax to payments sent outside of Canada.

Sincerely
Christian Farstad
Comment by Nick on 8 July 2009:

Hi,

First of all I must say that you have a great site running for the people in need. Here is my question

My family immigrated to Canada in 1995. Since then my 65+ years old dad visited home country a few times for couple months then came back to Canada. I have heard if the absence is less than 180 days it is still counted toward the living time in Canada. Is that correct?

Thanks,
Nick
Comment by Christian Farstad on 9 July 2009:

Nick

It is my understanding that a few months of the year traveling does not effect the addition of that year to your Old Age Security residency requirement. It would be best for you to talk to Service Canada regarding your father’s individual situation to clarify with them. If you disagree with their assessment you have the ability to appeal.

The number to call is 1 800 277-9914 for service in English and the website reference is http://www.hrsdc.gc.ca/eng/isp/oas/oasoverview.shtml

Sincerely
Christian Farstad
Comment by Mary on 28 July 2009:

my husband will be 65 in april 2010 and i will be 65 in oct 2010
i dont seem to be able to get a straight answer from cpp in regard to our monthly pensions amount.they have told me the cpp eligibilty but i am unable to find out if we are both eligable for OAS .Is OAS dependent upon income.

from what they have said i will receive less monthly than if we were not married because they calculate net income of the household .Our yearly income was 36000 last year that was gross.

Also my husband receives a 30000 payout from a LIR retirement fund
he is forced to take the lump sum as legislated if under 45000 .How will that calculate .Thank You very much
Comment by will on 29 July 2009:

hi
my question is can someone that is going to be turning 65 very soon,but is not going to retire, collect oas and cpp and also get a full pay cheque every two weeks from their job.
Comment by Christian Farstad on 4 August 2009:

Dear Will:

Your question is a very common one. You can collect OAS while still working but CPP can only be claimed when you stop working. You can delay collecting CPP and collect more benefits when you do eventually claim benefits. Or you can stop working and claim CPP benefits and then start working again and continue collecting CPP.

Best regards,
Christian Farstad
Comment by Ann on 5 August 2009:

My common-law partner is 25 years older that I. He is presently 62 and still working. We both have incomes over 70000 per year. Can you foresee any difficulties with any aspect of his retiring due to the age difference? I hate to ask but if he passes can his company say they will only pay the pension benefits to me for certain amount of time?
Comment by Christian Farstad on 10 August 2009:

Dear Mary

Thank you for your question. I understand your frustration, it is often difficult to get individualized answers to retirement questions. I am able to answer part of your Old Age Security question but to answer your other questions we would need to talk on the phone for me to gather more information.

Old Age Security is not based on income. It is based on residency in Canada. When we talk on the phone we can discuss your specific. In general here are the eligibility requirements.

Eligibility conditions: To qualify for an Old Age Security pension, a person must be 65 years of age or over, and must be a Canadian citizen or a legal resident of Canada on the day preceding the application’s approval; or if no longer living in Canada, must have been a Canadian citizen or a legal resident of Canada on the day preceding the day he or she stopped living in Canada.

A minimum of 10 years of residence in Canada after reaching age 18 is required to receive a pension in Canada.

Amount of benefits: The amount of a person’s pension is determined by how long he or she has lived in Canada, according to the following rules:

A person who has lived in Canada, after reaching age 18, for periods that total at least 40 years, may qualify for a full Old Age Security pension;

A person who has not lived in Canada for 40 years after age 18 may still qualify for a full pension if, on July 1, 1977, he or she was 25 years of age or over, and lived in Canada on July 1, 1977; or had lived in Canada before July 1, 1977, after reaching age 18; or possessed a valid immigration visa on July 1, 1977.

In such cases, a person must have lived in Canada for the 10 years immediately prior to approval of the Old Age Security application. Absences during this 10-year period may be offset if, after reaching the age of 18, the applicant lived in Canada before those 10 years, for a period of time that was at least three times the length of absence. In this case, however, the applicant must also have lived in Canada for at least one year immediately prior to the date of the application’s approval. For example, an absence of two years between the ages of 60 and 62 could be offset by six years of residence after age 18 and before reaching age 55.

I hope this helps. Give me a call at 604-737-3543 or at 1-800-661-1495.

All the best
Christian Farstad, CFA, CFP, FCSI
Wealth Advisor
ScotiaMcLeod
Comment by Christian Farstad on 10 August 2009:

Dear Ann:

Retirement planning is a complicated process for any couple. Many people who are planning their retirement focus on the wrong things such as income and savings. What you should really be concerned about is what you are going to do day to day and how retirement is going to change your quality of life. I have gone through the retirement process with hundreds of people and I can tell you that pretty much everyone has difficulties. Minimizing the difficulties is easy with good advice but people rarely plan for retirement the right way.

The 25 year age gap that you and your common law spouse have can create some planning difficulties but also opportunities. I know from experience that most couples do not plan their retirement together. You and your spouse need to start to talk about what you expect to do in retirement. For example - Will you retire at the same time as your spouse or will you continue to work? It can be problematic for one spouse to be retired while the other continues working but on the other hand if your retire with your spouse the amount of time you would require income could be over 50 years. 50 years of income would require significant savings. These types of questions need to be answered well in advance of the retirement date.

Your specific question regarding your spouse’s pension plan is easier to give you a general answer but I would require more information regarding the specific company plan before I could give you an answer that was accurate to your situation. Regardless of whether your spouse’s pension plan is defined benefit or defined contribution at retirement your spouse will be given many options on what can do with the plan. It is at that time when he will decide the treatment of the plan at his death. If the plan is a defined benefit plan you can set it up to continue with reduced payments to the spouse of a deceased plan member but it can also be set to end at his death. These options need to weighed carefully and the ramifications need to be fully understood.

I would make the suggestion that you and your common law spouse make an appointment to see a retirement planning specialist. The planner will help facilitate discussions regarding retiring and in the process give you answers to your specific questions so that you can make your retirement as smooth and easy as possible.

All the best
Christian Farstad, CFA, CFP, FCSI
Wealth Advisor
ScotiaMcLeod
604-737-3543
1-800-661-1495
Comment by Rebecca on 25 August 2009:

Hellow,
My mom came to canada in 2000 August as a immigrant I sponserd her. She is 75 years old still Indian citizenship and has permenent resident card. She went to india for 1 year return to canada. My question is now she has to live in canada for 11 years for eligible to get oas? is there any other govt. benifits my mom is eligible for ? pls. let me know.

Thanks
Comment by Christian Farstad on 31 August 2009:

Rebecca

Your mother may be eligible for a partial payment of Old Age Security. You should call Service Canada at 1 800 277-9914 to discuss her specifics. Go to this link for more information on partial pensions. Click here

Depending on your mother’s eligibility for OAS she may also qualify for the Guaranteed Income Supplement. Here is more information on this topic. click here

All the best
Christian Farstad, CFA, CFP, FCSi
Wealth Advisor
ScotiaMcLeod
http://www.farstadretirement.com
Comment by charlie schembri on 28 September 2009:

Hi I’m 57 years of age I work in a retail enviroment as a stock replenisment associate. My legs hurt,I have a pain in my butox that hurts and switches from side to side witch makes it hard to do the job. ? How do I go about aplying for disabuility and would it be enough to live on. My current rate is $1960. a month,or is ther any other goverment help I could apply for.
Comment by Sherry B on 1 October 2009:

Hi Christian,
I am a 44 yr old Widow, I was married tomy husband since 1989, as of Dec 1998 he dissappeared and has not been seen since. I had to wait the 7 yrs beofre I could have him declared as deceased, and when I went upto the Pension office to fill in the proper forms , I was told I did not qualify for a monthly pension benefit until I was 65. The reasons for this , they told me was, I was under 35yrs old when he dissappeared and did not have any children with him. I was of course very upset by this and do not think it is fair as I was 40yrs old when I was able to go through proceedings to have him declared deceased, and to try and move on with my life. So as you can guess I have been in a turmiol about this stuff since. I think I should be intitled to what ever is coming my way as I feel the Gov should be paying me for not having any children with him, he suffered from a Mental Illness for yrs and it was a living hell for me and seems to continue. I am currently living on my own as a young Widow and struggle to survive each and every day. Can you help me and guide me as to what I may be able to do about this and any action or rights I may have in this situation. I feel because I was the one who was left hanging when he dissappeared there must be some recoarse for me to help me regain my life back, as things continue to be a struggle. So can you please give me some guidance with this matter, as I am at a dead end as to what to do and what I am entitled to …..Thank you ….
Comment by S.K. patel on 7 October 2009:

I am going to complete 56 years.I heard that I can apply at this age or earlier than 60 years of age. Is it true ? My kids were born in INDIA, can have CPP benefit plus under CPP Child Rearing Provision ?
Comment by Susan on 22 October 2009:

1. Is the clawback calculated and adjusted annually…i.e. if income is high enough at age 64 to result in clawback at age 65, but then reduces at a later date such that it is lower than the clawback income?
2. Is it a good idea to postpone the CPP for a few years until the income reduces…i.e. to reduce the clawback amount?
Comment by Christian Farstad on 9 November 2009:

Dear Sherry:

I am very sorry to hear about your situation. It must have been extremely difficult to go through. I hope that I can steer you in the right direction here. Both Canadian Pension Plan and Old Age Security aren’t really set-up to assist people in your situation. A better place to look at potential benefits that you could apply for is at the following site Government Benefits

Check out bothe the federal benefits and the provincial benefits available where you reside. I hope this helps.

All the best
Christian Farstad
Comment by Christian Farstad on 9 November 2009:

Dear Charlie:

You can apply for disability through the Canadian Pension Plan system but the disability is “available to people who have made enough contributions to the CPP, and whose disability prevents them from working at any job on a regular basis. The disability must be long lasting or likely to result in death. People who qualify for disability benefits from other programs may not qualify for the CPP disability benefit.” This a quote from the Service Canada website.

The disability needs to pretty severe to qualify. The amount you could potentially qualify for is on average $816.14 a month with a maximum of $1,105.99 (from Service Canada May 2009).

Here is a great website to check out other benefits you could potentially apply for Government Benefits.

All the best
Christian Farstad
Comment by Christian Farstad on 9 November 2009:

Dear S.K. Patel:

You have the ability to apply for Canadian Pension Plan at age 60 but the earlier you take the pension the more your pension payout will be reduced. At age 56 you do not have the ability to apply. You may qualify for benefits with a disability or the death of a spouse. To discuss with Service Canada contact them at Service Canada

You may qualify for the Child Rearing Provision even though your children were born in India. To apply you will need to provide an original or a certified true copy of your children’s birth certificates. You may also be required to provide proof of the date of entry into Canada. To get the Child Rearing Provision you must meet the other requirement for application to CPP. It would be best for you to contact Service Canada and find out what your options are at this time.

All the best,
Christian Farstad
Comment by Christian Farstad on 9 November 2009:

Dear Susan:

Although we discussed this in person I thought that others may appreciate the answers as these are questions that are quite common.

The Old Age Security clawback is adjusted annually based on your income. You may get a clawback one year and not the next based on your income. This allows for income strategies to maximize your income and reduce clawbacks. Taxation is a major consideration when you are retired. Carefully planned strategies will help you manage your taxable income in a way to maximize income and minimize taxation. Dealing with an expert in this area will help you plan these strategies out for the long term to best meet your individual needs.

Taking the Canadian Pension Plan early or late has been debated for some time. Here is a great article by Jonathon Chevreau from the National Post exploring this situation in detail. Article

Please note that the rules for CPP are in the process of being changed. For information on those proposed changes click here

Take care
Christian Farstad
Comment by Cynthia on 16 November 2009:

I am a Canadian citizen born in the year of 1953. I worked full-time between 1983-1989, prior to those dates, I did part-time work. I left to work in the US in 1989 at the age of 36 and have been working there now for 21 years. Will I be entitled to CPP?
Comment by Christian Farstad on 17 November 2009:

Dear Cynthia
The Government of Canada and the US have an agreement with regards to retirement benefits. This agreement covers both Canadian Pension Plan and Old Age Security. Link to information. Under this agreement work done in the US can count towards your benefits in Canada. Call Service Canada at the link above and find out the specific benefits you have qualified for. The number is toll free from the US.

Regards,
Christian Farstad
Comment by Ralph on 24 November 2009:

Hello,

I contributed 29 years to the CPP, till inclusive 2006. Later in 2006, I resigned from my post due to illness (applied for Disability Pension, but was not approved to due to not enough disability for me not to do some work). Now, I could go back to work as I am healed. My wife and I moved in September 2006 to the Philippines and are now economically not active.

I received my Canada Pension Plan Statement of Contributions in the mail and it says: “If you were 65 today, based on your average pensionable earnings since age 18 or January 1, 1966, you could receive a retirement pension of $905.13 per month.”

In 2006, I was 48 years of age and did not contribute to the CPP as of 2007. I am not planning to go back to Canada and work there, as for now.

However, I am planning to apply to receive my CPP benefits at 65.

Based on the $905.13 per month, how much will I receive when I turn 65? Will I get a full pension of the said $905.13 or will it be reduced? If reduced, by how much?

Thank you very much.
Comment by Paresh on 27 November 2009:

I am 40 years old lived in Canada for 4 years on PR from India, became citizen. Because of changing dynamics, globalization and recession, I was given an option to work out of India which I opted for and I continue to get Canadian Salary and have CPP contributions despite staying in India.

Will this affect my Pension and Disability benefits in future because of not staying in Canada?
Comment by Christian Farstad on 4 December 2009:

Thanks for your note.

Working in India will not affect your Canadian Pension Plan accumulation because, as you mentioned, you are still contributing to CPP despite staying in India. The Old Age Security program is based upon residency in Canada but employees working outside the country for a Canadian employer may have their time working abroad counted as residence in Canada. Therefore, working in India for Canadian company shouldn’t affect your government pension and disability benefits.

All the best
Christian Farstad
Comment by Christian Farstad on 4 December 2009:

Ruth

You may ask for a review of your situation. Contact Service Canada to discuss. click here
You may have your situation reviewed and if you do not agree with their assessment you may appeal. Click here for the process.

I really hope this helps. Best of luck.

Christian Farstad
Comment by Christian Farstad on 4 December 2009:

Ralph

If in 15 years when you would start your CPP payments the rules are still the same, you payments will be lower than the maximum payout. Your statement assumes that you are going to be continuing contributing to the system. Since you are not you will not receive the maximum payout.

CPP is calculated on the earnings you make between the ages 18 and 65 that is 47 years. You have contributed the maximum for 29 years of the 47 years available. You should be able to drop 15% of the years or 7 actual years due to disability. That gives you 29 years or 40 about 75%. The maximum payment is $908.75. 75% of that is $681.56.

This calculation is very rough and assumes that rules stay the same over the next 15 years (very doubtful).

The best way to check is to continue to receive statements of contributions from Canada. If you don’t get them anymore you can go to click here to get an update.

I hope this helps!

Christian Farstad
Comment by Agnes J on 10 December 2009:

Hi We have a question on CPP contributions. My mom is 56 years old and not working for about 2 years now. She have contributed to the CPP in the past and would like to contribute as a non worker (in order to receive the full benefit in the future) . How can she do that ? Please advise.
Comment by Jack on 12 December 2009:

My parents got their immigrant certificate in Nov.2009(I sponsor them to immigrant Canada).They are both 70 years old now. they already lived in canada over 10 years (from 1998 to 2009).

My question is: can they apply Old Age Security Pension now? or need to wait for 10 more years?
Comment by Barb on 16 December 2009:

Is it possible in negotiating a settlement for spousal support to ask for the ex-spouse to sign over their CPP and OAS benefits. I understand I will already receive the CPP split and as a stay-at-home mother, will receive 1/2 but, in lieu of an outright settlement at this time, can the benefits be negotiated. I am 57 so it would not take place immediately. Thank you for your help.
Comment by Christian Farstad on 18 December 2009:

Dear Jack,

The application approval process states that the person applying must be a Canadian citizen or legal resident at the time of the pension approval. As long as you can prove that they have been on the country for the 10 years you should be approved. You should apply for the pensions for your parents now and see how the government replies. According to the rules as I read them, they should get some form of pension. Click here to get the application forms.

Christian Farstad
My retirement income guide
Comment by Christian Farstad on 18 December 2009:

Dear Agnes
Unfortunately, you can not contribute to CPP when you are not working. The only way to make contributions is to be employed and make the contributions through payroll or to be self-employed and make the contributions yourself. If you go the self-employed route you have to remember that there are both employee and employer contributions so as a self-employed person you have to make both contributions.

Christian Farstad
My Retirement Income guide
Comment by Christian Farstad on 18 December 2009:

Barb

This question would be best answered by a lawyer. It is out of my area of expertise. I don’t believe that you can receive more CPP than what is available through the credit splitting system. From my understanding Old Age Security can not be shared.

The CPP benefit is accumulated through a system credits gained through each year of contributing to the system. When you take the pension at retirement your personal benefit amount is calculated based on the amount of credits you have accumulated. The credits can be split between between spouses. Here is a great summary of how credit splitting works on the Service Canada website with examples.

I hope this helps
Christian Farstad
My Retirement Income Guide
Comment by Ron on 4 January 2010:

I am 56 and stopped working. I have been a Canadian citizen all my life. I have paid into CPP since I was 18 and max rates for the past 15 years or so. Will my CPP be reduced more at 60 if I do not go back to work then if I worked until 60?
Comment by Christian Farstad on 5 January 2010:

Ron,

I am going to assume that you are going to claim CPP at age 60 as opposed to waiting until age 65. As I sure you are aware your payments will be reduced by .5% for each month that you claim CPP before 65. If you claim at age 60 you will receive 30% less than if you would claim at 65 (60 months * .5%).

Here is an excerpt from the Service Canada site

What is my “contributory period” and how is it used?

The time when you may contribute to the CPP is called your “contributory period”. It is used in calculating the amount of any CPP benefit to which you are entitled. You do not contribute while you receive a CPP disability benefit. Removing that time from your contributory period protects the calculation of your future benefits (see next question).

The CPP contributory period starts when you are 18 years of age (or January 1, 1966, whichever is later) and ends when you start getting your retirement pension, die, or turn 70.

If I had some low-earning years, will that reduce my pension?

CPP calculations include both how much and how long you contributed.

To keep your pension as high as possible, the CPP drops out some parts of your contributory period from the calculation:

- periods when you stop working or your earnings are lower while you raise your children under the age of seven;

* months after the age of 65 (which can be used to replace any low-earning months before 65);
* any month when you were eligible for a CPP disability benefit;
* the 15 percent of your contributory period in which your earnings were lowest.

Your contribution period, if you take the pension at age 60, is 42 years. The calculation drops your lowest 15% of your contribution time for you is 6.3 years (42 years * 15%). You will more then likely receive less CPP by retiring now than working until 60 because the years dropped will be years that you would have contributed the maximum to CPP as opposed to years when you first started working and your contribution level was lower.

There is a form you can submit to Service Canada to see the actual difference in your payments. I have attached the form below.

Click here for the Service Canada form

I hope this helps

Christian Farstad, CFA, CFP, FCSI
Free retirement guide
Comment by Marlene O'Hara on 6 January 2010:

I have worked full time for over 20 years.
I have been paying in to both short term and long term disability under my companies extended plan.
I had an operation on Oct 13th and have been off work since then due
to an unexpected diagnosis of cancer and subsequent chemo treatments.
My job is being held for me until I am able to return to work.
I have just received a letter saying my short term disablity will end on February 10 of this year. The reason being –I am 67 years old—-still most capable of keeping my job when healthy again but being discriminated against because of my age. I am paying in to both short term and long term disability {14.80} per month for the long term. Now have discovered re searching today that Old age pension disability ends at 65 as well as EI. Where does that leave me now. I will have only 1000 coming in with my two pensions and my rent only is 980. I am not able to move right now due to my illness and chemo sessions every other week.
Surely the government needs to recognize that the demographics have changed in the work force and we have pensioners who are working in to their 70’s and should also benefit from insurances paid in to on a monthly basis. Taking my money on a false pretense of receiving a further disability seems criminal if I don’t qualify.
I would appreciate an explanation or a solution for this matter.
Thanks
Comment by raheem on 7 January 2010:

Whats the rules governing OAP and residency? If I travel abroad every year but return within. However sometimes I have stayed abroad longer than 6 months. Is my OAP affected?

What if my stay in Canada was 6 months in a year but not continuous?

Am I able to transfer my pension so I get paid abroad?

Thanks
Comment by Christian Farstad on 11 January 2010:

Marlene

I am very sorry to hear about your illness and situation. I wish you the best with your recovery.

Unfortunately, employer insurance plans are not my area of expertise so I feel unqualified to answer your question. The insurance companies that offer the employer or group plan insurance are private companies. I do agree with you that it doesn’t seem right that they can take premiums this way.

Regards,
Christian Farstad, CFA, CFP, FCSI
My Free Retirement Income Guide
Comment by Christian Farstad on 11 January 2010:

Dear Raheem

The Old Age Security pension is based upon residency. If you are traveling but still keep your residence in Canada than those years would count towards a full resident year.

As you know the Old Age Security pension is like a large pie divided into 40 equal portions. If you qualify for the “full pension,” you are entitled to receive all 40 portions each month. If you qualify for a “partial pension,” you will receive some, but not all, of the 40 portions each month. Whether you qualify for a full or partial pension depends on how long you’ve lived in Canada.

You are able to be paid abroad. Check out this site for more information click here

All the best
Christian Farstad, CFA, CFP, FCSI
My Retirement Income Guide
Comment by Robert on 12 January 2010:

I am a 45 year old Canadian citizen. I have lived in Canada since birth and contributed to CPP from 1985 to 1996 and also from 2008 until now. My CPP statment of contributions shows that - if I were 65 today - I would receive 238.49. I am now planning to go overseas to work in China. I am going to submit an application to Revenue Canada for non residency.

1) Does Canada have any agreement with China concerning CPP and OAS?

2) If I am declared a non resident for tax purposes and I stay in China long term can I still receive my CPP there subject to a 25% withholding tax?

3) If I return to Canada at age 65 can I receive my CPP without any withholding tax?

4) If I am declared a factual resident (which means - even though I live in China - I am taxed by Canada would I still qualify for the full OAS ? (in other words if you are living in China and paying tax to Canada - does this count toward residency for OAS purposes?)

Thank you for a great website.
Comment by Marg A. on 16 January 2010:

Christian:
Great site!! I am writing from China where my partner and I are presently teaching. As in many situations here, there are no pension benefits until after a fairly lengthy stay (approx. three years or so). Prior to coming to China I had been working for the NB Dept. of Education as a full time teacher. I was injured on the job and fully recovered. However, I was off work for over two years until I had major back surgery. During that time I was solely on Workers Compensation Benefits. I am fairly certain I was not making contributions during my recovery time.

My partner and I are a little concerned because we are middle aged and are trying to make some good financial decisions about our future. We were wondering what occurs if there are lapses in your contributions and what the cost is to pay your contributions while out of the country? Also, are their financial penalties for working abroad in terms of CPP?

We hope you can help us answer some of these perplexing questions.

Thank you in advance,
Marg & Eric
Comment by Niel Braun on 21 January 2010:

I was recently informed that along with old age pension,there is also old age pension with supplement,which I presume is an amt.added to the basic old age pension a person recieves.How does one get approved for this supplement and what is the $ value?
Comment by Darlene on 25 January 2010:

My mother took early retirement several years ago, she is now asking for us to give her our social security numbers so she isn’t cheated out of money due to her through her Canadian Pension Plan. IS there any reason for her to require our SIN numbers this late in life? We are in our 40’s and Ive always been under the understanding that SIN numbers are not to be shared so this has us perplexed.

Thanks
D.
Comment by Tyler on 31 January 2010:

Hi, I have a scenario id liek you to comment on:

-an elderly woman who had a stroke dictated a will to a lawyer, which was made properly in 2003.

-some 3 years later the elderly womans son, types his own will and prints it off his computer, and witnessed by his wifes friend and a friend of the elderly woman, gets his elderly mother to sign the will.

-the son wrote out the grandchildren in the new will

My question: is this a valid holograph will?

Thanks
Comment by Louise on 2 February 2010:

Hi Christian,

What determines whether you were in residency each year? Also what are some proof of residency other than passport and customs declarations? Do utility bills or income tax returns proofs? My father is 64 years old, owns a home here, and files his taxes every year, however he only spends about 10% of his time in Canada for the past couple of years. He plans on living full time in Canada starting this year and is wondering if he can qualify for full OAS.

Thanks for your help,

Louise
Comment by Judy on 4 February 2010:

I have a friend who has worked in Canada for the past 21 years, is now a Canadian Citizen and contributing to CPP. He would like to retire in three years, at age 65 but he recently went into debt to help out his children.

Does a person’s personal debt affect the amount of CPP they will receive at retirement. He is afraid because the debt is around $50,000 that he will not get the full CPP pension he is entitled to.

People are telling him because of his big debt, his pension will be reduced. Thank you.
Comment by Darlene Clevenger on 5 February 2010:

Hello Christian,

I am enjoying the read here on your website. Great Info on Pensions!

I am planning an early retirement and take the 54/11 package, next year.

My company pension will be roughly $28,000, commuted value. The company pays $4,000 to this pension. They don’t tell you what the commuted value is until you receive the package, very crafty I say! we may want to prepare better for our retirement!

Anyway, my question is would you have any idea as to what the total payout will be on $28,000? I plan on putting immediately into an RRSP.

Thanks
Darlene
Comment by Shailesh on 10 February 2010:

First let me thank you for the wonderful work you are doing by answering these questions.

I am a Canadian citizen and have worked in Canada for 12 years and have paid into CPP regularly. I am now planning to go back to India but will maintain my bank accounts here and will visit from time to time.

1, Having lived here for more than the stipulated 10 years make me eligible for OAS. India is not on the list of countries that Canada has a treaty with. Does it mean that I will not get the OAS benifit at all?
Once I turn 65, will I get the OAS pension even if I am not living here?
Since I will maintain my bank account here, will they deposit the pension amount in it? I can then make arrangements with my bank to have it remitted to me in India.
Do I have to necessarily live in Canda to avail OAS?

2.Same as above but about CPP. Can I get CPP while living in India?

I am not able to comprehend the logic of the rule that one has to be in Canada to get OAS. The amount is small, and the cost of living in India is comparatively much lower. While it can be difficult to live in Canada on the small amount of benefit from OAS, one can live fairly decently in India in the same amount.

Thanks in advance for any clarification that you can provide.
Comment by Earl D on 12 February 2010:

My wife works part-time making about $5000 per year. We are in our late 40’s. If she only continues to make this income, will she get only a reduced cpp pension.

Also, in order to get a ‘full’ cpp pension, what would her income have to be?

Thanks.
Comment by chelsey vaughan on 15 February 2010:

my father in law died 3 weeks ago and It;s a nightmare. his wife never worked. He worked for the spectator until he retired. She has been informed she gets nothing. question…what is she entitled to now. She has no income and very little savings. We need to know what percentage of the old age pension from the government will she get? also the guaranteed income supplement as well as the pension.? he left every thing in a mess and she thinks she will be broke. it concerns us all as we would like her to remain in her own home it’s paid off. Please if you have time to respond would be great. need total amount in dollars as we don’t have a clue with the math.
Comment by Imelda on 15 February 2010:

My mother is 82 years old and she is receiving almost the full amount of OAS and GIS. She is babysitting my kid and I’m wondering if I can put the babysitting income on her income tax. Will it affect her OAS or GIS amount? Thank you.
Comment by Rosemary Bayliffe on 21 February 2010:

Christian,
My husband is 65 and receiving CPP. The OAP was clawbacked part way through 2009 because of his 2008 earnings. He worked for the first quarter in 2009.
As a British (and Canadian)citizen my husband has the opportunity to purchase pension years in his UK pension to increase his monthly payments. He does not receive a UK pension at the moment.
If he chose to activate his UK pension would this affect the amount he would receive in his CPP and/or OAS? He’s trying to decide if it is worthwhile activating the UK pension as is and whether to purchase pension years?
Comment by Tom on 24 February 2010:

Dear Christian,

My parents have recently heard a rumor that if they legally live in Canada for a 6 months period after they submit their immigration application, the 10 years waiting period for OAS can be counted from the day they sumbit the application. It sounds pretty baseless and unheard of, but unfortunately one occasionally has to resort to a professional to debunk even such hearsay. I apologize for the rumor unworthy of your time, but could you kindly confirm its falsehood? Thanks.

Tom
Comment by Annie Ryan on 25 February 2010:

My ex-husband (72yr.) and I (62 yr.) have been “Canadian Landed Immigrants” from the US for over 36 years. I have not remarried but have been cohabiting for 13 years. Will I, or our children, be able to collect my ex-husbands pension after his death? Is there anything we should do to insure that either of us can collect his pension after his death?
Comment by Christian Farstad on 2 March 2010:

Dear Robert

Thanks for the note. Unfortunately, Canada does not have an agreement with China regarding CPP and OAS.
If you are declared a non-resident you can still receive your CPP subject to 25% withholding tax. You have the ability to apply to have the withholding tax rate reduced by filling out a NR5 form. To receive this form contact Canada Revenue Agency directly.
If you return to Canada you would receive your CPP without withholding tax but remember that CPP is still taxable income and you would be taxed at whatever rate is applicable to your situation.
I think it best that you talk to Service Canada directly regarding your last question. Click here I read the rules for qualifying for OAS as residency in Canada but you should discuss your situation directly with Service Canada to ensure you get the right information for you.

All the best
Christian Farstad
Comment by Christian Farstad on 2 March 2010:

Dear Marg & Eric:

I am sorry but I don’t have great news for you. The CPP system works on a contribution plan. Each year you work in Canada and contribute to the CPP and you gain corresponding credits for your retirement pension. Basically, when you are out of the country and not contributing your CPP will be reduced at retirement. There isn’t any way that I know of to contribute directly to CPP when you aren’t working in Canada. There aren’t financial penalties for working outside the country, you just don’t get credit because you aren’t contributing. Just for your information, most people do not receive the full CPP pension at retirement.

You can receive a summary of your pensionable earnings from Service Canada . This will help you understand what your CPP pension would like when you retire.

Your best bet to accumulate savings. This is the only way to guarantee a safe retirement. Savings and, of course, continue working.

Good luck in China!
Christian Farstad
Comment by Christian Farstad on 2 March 2010:

Dear Niel

There is a supplement to Old Age Security. It is called the Guaranteed Income Supplement. The maximum amount you can receive is $652.51 in 2010. To qualify you need to have low income (maximum $15,672 not including OAS). Check out this web page for more information on the program and how to qualify

Sincerely
Christian Farstad
Comment by Christian Farstad on 2 March 2010:

Tyler
I am no expert on this subject but from my understanding a ‘holograph will’ needs to written in the person’s own handwriting.
Christian Farstad
Comment by Christian Farstad on 2 March 2010:

Louise

To qualify for full Old Age Security your father needs to have resided in Canada for 40 years since the age of 18. He doesn’t have to have resided in Canada every year since 18. As long as he has lived in Canada for 40 years since the age of 18 and he resides in Canada when he applies he would receive the full benefit. Residing outside Canada and traveling internationally are two different things. You should http://www.servicecanada.gc.ca/eng/isp/contact/contact_us.shtml if you need more clarity on your father’s situation.

All the best
Christian Farstad
Comment by Christian Farstad on 2 March 2010:

Judy

Personal debt does not affect your CPP payment rate. The only things that affects the payout are at what age you apply for benefits and the amounts you contributed to the program.

I hope this information helps you.
Christian Farstad
Comment by Christian Farstad on 2 March 2010:

Earl

Thanks for the note. I would like to let you know that most people do not receive a full CPP pension. The CPP is based upon your complete complete contribution history to the program. If you are in your 40s and have had period of low or no contributions to the system you get a reduced pension. To get a full pension you need to contribute the maximum to the system. The system automatically drops about 15% of your lowest income years (usually when you are young). Right now the income level to contribute the maximum to CPP is $47,200.

All the best
Christian Farstad
Comment by Christian Farstad on 2 March 2010:

Chelsey

I am very sorry for your loss. This is a very difficult situation. Your father in law’s wife should be receiving her own OAS payments if she she has been a Canadian resident most of her life. You should contact Service Canada directly to discuss the situation with them. They will walk you through the process and let you know the specific information you need.

There are lump sum death benefits and monthly survivor’s benefits available. Call Service Canada 1 800 277-9914 for service in English and get more information.

All the best
Christian Farstad
Comment by Christian Farstad on 2 March 2010:

Imelda
Your mother would have reduced GIS benefits if her income rises above $15,672. Here is more information on the program.
All the best
Christian Farstad
Comment by Christian Farstad on 2 March 2010:

Dear Annie

To help me answer your question can you tell me which ‘pension’ you are referring to? Is it the Canadian Pension Plan, Old Age Security or another?

Thanks
Christian Farstad
Comment by Leigh on 28 March 2010:

Having never worked outside my home, what with looking after my children, then grandchildren and then my in-laws until they passed away. I am wondering if I will receive any pension at all, Old Age Security or CPP. I am assuming not as I have not contributed to neither. Would appreciate any information and thanking you in advance.
Comment by Christian Farstad on 29 March 2010:

Dear Leigh

If you have lived in Canada your whole life you will qualify for Old Age Security. In 2010, the amount is $516.96 a month. If you income is not very high than you may also qualify for the guaranteed income supplement. In 2010, a maximum of $652.51. You may also qualify for some CPP. Did you have children after 1958?
If your earnings either stopped or were lower because you were raising your children under the age of seven, you can ask us to exclude that period of time from the calculation of your retirement pension. This is called the “child rearing” provision. It means we do not count these child-rearing years when calculating the amount of your benefit and ensures that you get the highest possible payment. Please contact Service Canada to find out more information. 1-800-277-9914

All the best
Christian Farstad
My website
Comment by Leigh on 29 March 2010:

Dear Christian,

Thanks so much for answering my questions. I have learnt so much from your website.
Comment by Nada on 6 April 2010:

Dear Christian,
I found your website which is very helpful, and realy appriciate your effort , and help to people.
I also have question for you I sponsored for 10 years my mother to Canada ,she came in 2001 to Canada,she is Canadien citizenship, and she is 87 old.
My question is:can she get any income supplement or old age security or she should waituntil 10 years pass?

Thank you very much
Nada
Comment by Shezza on 13 April 2010:

hey Christian,
Iam an Australian on a work visa and will be heading back to Australia to live I was wondering if I can claim any of the CPP I have paid or can i get it tranfered to the australia under our own pension program.
thanks,
shezza Malik
Comment by John on 14 April 2010:

I am planning to retire to my country of birth (Wales) at the beginning of next year, at which time I will be over 65 years of age. I am a British Citizen and a Permanent Resident in Canada.

I came to Canada in November, 1972 and have lived and worked here all those years. I have been approved for a full OAS pension effective November 16, 2010 and elected to collect CPP a few years ago.

My question to you is, since the information I have been able to find is contradictory, how will my absence from Canada effect my OAS pension payments?

Thanks so much in advance for your assistance.

P.S. I really enjoy your site and you provide invaluable information to many on this complicated topic.
Comment by Christian Farstad on 16 April 2010:

Shezza
Canada and Australia do have an international agreement for pension benefits. Payments made to the Canadian Pension Plans should give you credit in the Australian Pension plan according to the agreement. Keep your records and contact the Australian government on your return to Australia.
All the best
Christian Farstad
My website
Comment by Christian Farstad on 16 April 2010:

John
You must looking forward to getting back to Wales. I hear that it is a beautiful country.

If you have already qualified for full OAS and are already collecting CPP moving to Wales will not change your payment rates. You should contact (phone) service Canada to discuss directly. You need to decide how you will receive your payments i.e. Canadian dollars, where is you bank located, converted to another currency, etc…

Have you read this document?

All the best
Christian Farstad
my website
Comment by Christian Farstad on 16 April 2010:

Nada
Please contact Service Canada by phone directly. They will tell you the best solution. There should be some some of benefit at this time.
Service Canada can be contacted at 1 800 277-9914

All the best
Christian Farstad
my website
Comment by Steve on 29 April 2010:

Dear Christian,

I’m 30 years old and have been contributing to CPP about 4 years.When I review my “Estimate CPP Benefit” today, it says that “If you were 65 today,you could receive a monthly retirement pension of: $199.97″ My question is if I stop contributing to CPP from now until retire, how much will I get when I retire $199.97 or it will be reduced a lot?

Also, can you please give me a list of countries that have agreement with Canada regarding CPP contributions as I wanted to find out what countries if I go to work, I can still contribute to CPP.

Thank you,
Steve
Comment by Christian Farstad on 30 April 2010:

Dear Steve

Thank you for your question.

The CPP Statement of Earnings that you received assumes that you will continue to contribute to CPP until age 65. If you stop contributing today you will receive a much lower CPP payment than what is on your statement.

Here is a link to the Service Canada site that can tell you what countries we have international agreements with for pension arrangements. The site

All the best
Christian Farstad
My website
Comment by Steveb on 1 May 2010:

Dear Christian,

Thank you so much for the info and they are very helpful and useful. I’m wondering can you please tell me or give me a link from Service Canada site regarding on how to calculate CPP payment.

Thank you for your help,
Steve
Comment by mona on 3 May 2010:

I am get canada widows benefits i live in quebec and have been receiving this since my husband passed away in 2007 at
age 61. I am now 57 years old. I live in quebec. I understand that when I turn 65 the widows pension ends.
I dont understand this … because i will still be a widow at 65….. do i get his regular canada and quebec pension
when the widows pension or survivors benefits end…

thank you
Comment by Carol on 8 May 2010:

I am 60 & will receive a pension from where I have worked Is it beneficial for me to wait until 65 to take my CPP I plan on retiring this year or will the Gov. changes to the CPP have a negative effect in 2011.
Comment by Jewel on 15 May 2010:

Hi,
I’m a Canadian citizen who lived in Canada until I was 37 and then started working in the US (4 months before qualifying for OAS if I retire in the US). I sold my Canadian principal residence after reaching 38. While I had 2 residences (one in the US and one in Canada), I was deemed a Canadian resident for Canadian tax purposes but used the US-Canadian tax treaty tie breaker rule to avoid paying taxes to Canada on my US income.

1- Can I qualify to receive 19/40 of OAS based on the US-Canada Social Security agreement?
2- Is the residency based on the tax status or country of employment for OAS purposes?

If I don’t qualify, can I move back to Canada for 4 months and qualify for OAS (and even without becoming a resident for tax purposes)?
Comment by Robert Brockie on 17 May 2010:

Hi Christian,
All this pension stuff is very daunting to say the least. I’ve been to the CPP site to estimate my pension and it says I will receive around the max, IF I take it at 65. I’m thinking of taking it at 60 years old. Now my question is; this estimated $900 a month amount they have given me (which would be reduced by 25% if I take it at 60), does it include my OAS or am I to understand I will receive $900 (less 25%) plus an additional $516 OAS at 65 years old?
Comment by Christian Farstad on 18 May 2010:

Robert

Retirement planning can be quite daunting. With all the government programs, pension plans and plus the forced deregistering of your RRSPs it can be a complicated process making it difficult to make the right decision for you. Most of these decisions are irreversible so think through the consequences before making the final decisions. I recommend that you get good advice.

The CPP and OAS are separate. So yes, if you claim the CPP (and start receiving 75% of $900 at 60) five years later you will receive the OAS in addition to what you are receiving with the CPP.

All the best
Christan Farstad
My website
Comment by Christian Farstad on 18 May 2010:

Carol

This is a great question and a very common dilemma that retirees need to consider. I generally tell people to take CPP early. The CPP is a simple annuity that has very little death benefit. The break even point for taking CPP early is 78. In other words, if you live past 78 you would receive more money by waiting to 65 before claiming your CPP. But by taking it early you will be using CPP money for spending rather than your savings. This allows your savings to last longer. One last point is that after tax income is the real concern in retirement. By taking CPP early the payments will be smaller. This allows you to manage your income and taxation levels later and prevent OAS clawback.

If you would like more information please feel free to call me 1-800-661-1495. or email at christian_farstad@scotiamcleod.com

All the best
Christian Farstad
My website
Comment by Shiraz on 30 May 2010:

Hi Christian,
I will turn 65 in 2014 and my wife will turn 60 in 2015 and are preparing for our retirement. How many months can I live outside the country before losing OAS. Can I collect OAS year round or is there a time frame. I understand that CPP can be paid year round.
Thank you
Shiraz
Comment by Sal on 30 May 2010:

Hi,
My mother, aged 62, collects very little from cpp and would like to apply for oas benefits. Does she qualify? She has been divorced from my father (who collects oas benefits) for several years now and lives with me. Can she apply now for reduced benefits or does she not meet criteria and must wait until she’s 65?
Thanks for your help!
Comment by John Kovacs on 30 May 2010:

I am 65 and collecting OAS and CPP with payments automatically deposited to my bank account. Do I have to live in Canada part of the year to continue receiving the pensions or can I move to Mexico full time and still collect them?
Comment by Lee K on 5 June 2010:

Hi Christian

I came across this site on the hunt for answers- I hop you can help.
My father moved to Canada in 1974 from the UK. He was a permanent Canadian resident and worked and paid all his taxes until he moved back to the UK in 1993. He is a bit useless in finding out information but he is nearing retirement and would like to find out if he is eligible to claim any Canadian Pension? If not does he have any transferable amounts or partial entitlements?

Many thanks for all you kind help

Lee
Comment by pat on 6 June 2010:

My husband is turning 65yrs and I am still gainfully employed, will he be allowed to still receive his OAS when the time comes, presently he is receiving his CPP.
Pat.
Comment by Christian Farstad on 15 June 2010:

Pat

Your husband should have no problem receiving his Old Age Security at age 65 even though you are working.

All the best
Christian Farstad
My website
Comment by Christian Farstad on 15 June 2010:

Lee

The UK and Canada have an agreement regarding pension benefits. Here is a link to the site with more information.
You should contact Service Canada to discuss your father’s situation in more detail. Here is their contact information. If you are calling from the UK use this number 1-613-957-1954 (collect calls accepted). If you are calling from Canada or the US use this number 1-800-277-9914.

I hope this helps
Christian Farstad
my website
Comment by Christian Farstad on 15 June 2010:

Chaz

Thanks for your kind comments.

Here is the information you are looking for.

A person who has not lived in Canada for 40 years after age 18 may still qualify for a full pension if, on July 1, 1977, he or she was 25 years of age or over, and lived in Canada on July 1, 1977; or had lived in Canada before July 1, 1977, after reaching age 18; or possessed a valid immigration visa on July 1, 1977.

In such cases, a person must have lived in Canada for the 10 years immediately prior to approval of the Old Age Security pension application. Absences during this 10-year period may be offset if, after reaching the age of 18, the applicant lived in Canada before those 10 years, for a period of time that was at least three times the length of absence. In this case, however, the applicant must also have lived in Canada for at least one year immediately prior to the date of the application’s approval. For example, an absence of two years between the ages of 60 and 62 could be offset by six years of residence or presence after age 18 and before reaching age 55.

If you meet these requirements you will receive the full old age pension at 65.

All the best
Christian Farstad
my website
Comment by Christian Farstad on 23 June 2010:

Tracey
If you do not agree with the rejection of your mothers claim for OAS there is a review process to follow. Here is more information on the process. Click here to see

All the best
Christian Farstad
my website
Comment by Jo-Ann on 28 June 2010:

Christian,

I am a Canadian citizen who made contributions to the Canada Pension Plan from 1970 to 1999. In 1994, my company transferred me to the U.S. and my husband & I got our green cards in 1997. I continued to pay CPP as permitted, for the first 5 years, then started FICA payments in 1999. In March 2007, I took early retirement at age 55, and we moved back to Canada. We turned in our green cards to Homeland security in early 2008, so we shouldn’t be tax resident in the U.S.

I hope to start collecting my Canada Pension when I turn 60 (2012). I’m trying to estimate what my total pension will be, but I’m not sure how to calculate it. I saw the earlier posting from the fellow who retired at 57 and wondered how much his pension would be reduced (you directed him to a form on the Services Canada website) but he had paid CPP his whole working life. My situation is quite different in that last 9 years of contributions were made to Social Security, and naturally, those were my highest earning years.

1. I don’t have enough credits to actually qualify for Social Security; however, because of the treaty I should get something. Do you have any idea how this calculation would be done?

2. I do qualify for Canada pension, but again I have no idea how to actually work out an estimate. I have my statement from Service Canada, but other than the earnings/contribution numbers, the estimate is based on wrong assumptions. I’m not sure if the form you referenced in the earlier posting would work for me in my situation (I couldn’t figure out which form to use, anyway).

3. Any tips on getting through to Service Canada? I’ve been trying to ring through to their published phone number all day and have been getting a busy signal.

4. Any tips on dealing with Social Security when the time comes?

Thanks in advance for your help!

Jo-Ann
Comment by Belinda on 3 August 2010:

I’m trying to find out some information for my parents about their retirement.

My parents immigrated to Canada in 1968. My father worked in Canada from ‘68 to ‘89 and then left to work in the US. He will retire in January at age 70. My mother stayed home to raise 4 kids and started work in Canada in about ‘83. She has continued to work in Canada and will also retire this coming January at age 65. She moved to the US in 1990 but commutes across the border each day.

My mother is applying for her CPP/OAS but my father is concerned that if he applies for CPP, his US pension will be clawed back. He is under the impression that his US pension will pass to my mother on his death so he wants to maximize this amount.

Are they missing something? Can you recommend any on-line resources that address this issue?

Thanks in advance,
Belinda
Comment by Christian Farstad on 5 August 2010:

Belinda
Your best bet is to call Service Canada directly to answer your question. The on-line resources aren’t specific enough to answer your questions. Call 1 800 277-9914 - they can answer your questions.
All the best
Christian Farstad
Comment by Christian Farstad on 5 August 2010:

Jo-Ann

There is an agreement between Canada and the US in regards to social benefits. Normally, each country pays for the amount earned by you in that specific country. Sometimes though credit can be transferred. It is best to call Service Canada and discuss your specific situation with them directly. Call at 1 800 277-9914.

Best of luck
Christian Farstad
Comment by Belinda on 5 August 2010:

Thanks Cristian. I did contact Service Canada but they were very unclear about US clawbacks and the impact that Canadian CPP payments would have on a US Pension.

Thanks,
Belinda
Comment by Christian Farstad on 6 August 2010:

Belinda
You should get information from Service Canada on the amount of benefits your parents would receive if they applied for them. You should note that your mother may be able to get more benefits because she could apply for some extra benefits for the years she was home taking care of her kids. I would then call the US Social Security and discuss with them what the impact would be taking these Canadian benefits. I much less familiar with the US system of Social Security so I am not able to give you any real guidance on the impacts.
Another idea would be to contact a good Canadian accountant that deals with cross border clients. You would have to pay for the advice but it could be worth the investment.
Sorry for not being able to help more.
All the best
Christian Farstad
Comment by Heather Stang on 13 August 2010:

Hi Christian. The information you provide is very easy to understand and informative - thank you. One question: I’m taking a course in compensation and my professor implied that CPP could be open to clawback. While I understand that OAS could be clawed back based on income testing, isn’t CPP something that I’m entitled to, since I’ve paid into the plan, regardless of any other income I may have upon retirement (i.e. doesn’t CPP work just like any other RRSP?) Many thanks for your answer.
Comment by Ken on 19 August 2010:

If I am a Canadain citizen who came from the UK 1n 1977 and do not not have enough qualifying working years in Canada to qualify for the full Canadian Pension, can I get credit for the 12 years of full time work in the uk.

If so how do i go about this.

Ken
Comment by Karen on 30 August 2010:

I have been off work for over 2 yrs and I will not be able to return due to my disability. I didn’t even know about the CPP disability pension until recently. Would I still qualify for it, as I haven’t been making contributions?
Also, I have a company pension plan that also has a disability pension. Would collecting that affect any CPP that I might receive?
Thanks/
Comment by Christian Farstad on 1 September 2010:

Karen

I am very sorry to hear that you are out of work due to your disability. You may be able to apply for CPP disability benefits. I encourage you to try. You really have nothing to lose. The application can be linked to here CPP disability application
If you have been receiving disability benefits from your company plan you should call the provider to discuss the implications of getting the CPP disability pension.

All the best
Christian Farstad
Comment by Christian Farstad on 1 September 2010:

Ken

There is an international agreement between Canada and the UK for government benefits. Call Service Canada to discuss your individual situation. They can guide you through the process. Call 1‑800‑277‑9914.

All the best
Christian Farstad
Comment by Christian Farstad on 13 October 2010:

Virginia

I am sorry to hear about the difficulties you are having with your husband’s employer. If he is already collecting CPP it doesn’t make sense that the employer would want to still make these payments because they are contributing in addition to your husband’s contributions. You should consult an accountant regarding this matter. From my understanding you should be able to get these CPP payments back when you file your taxes but consult with an accountant to confirm.

All the best
Christian Farstad
my website
Comment by Christian Farstad on 13 October 2010:

Paul

Thanks for the email. From the information you have sent me it looks like your pension will be adjusted at age 65 to account for your CPP. This means that your pension plan will be paying less than it is now once you turn 65. Many pensions do this. Some include Canadian Pension Plan (CPP) and Old Age Security (OAS) and some only include CPP. I am not sure which type of plan yours is. Basically, the letters are telling you your work pension payout will be reduced soon.

If you would like to send me more information about your pension plan and the letters you have received - I would be happy to assist you. Send by fax (604-737-3524) or email christian_farstad@scotiamcleod.com.

All the best
Christian Farstad
my website
Comment by Christian Farstad on 13 October 2010:

Vinay

The one piece of important information that you left out is the age of your parents. If they are 65 now they won’t be able to qualify to Old Age Security at this time because they haven’t lived in the country for 10 years. You should contact Service Canada to confirm this information at 1‑800‑277-9914. They may qualify for some kind of pension through the US but you should talk to Service Canada about this.

Christian Farstad
my website
Comment by Madonna Mortensen on 11 November 2010:

I am a 60 years old woman living in the USA for the last 38 years. I was born in St. John’s, NL in; I am a Canadian citizen. I worked for 3 and 1/2 years in NL, Canada. Do I still qualify for a Canadian pension of any kind?

Thank You,
Madonna M
Comment by sandra Harquail on 8 December 2010:

I lived common law with a man and bore 3 children by him. I am now remarried and he has passed away, I am entitled to his cpp? I have written proof on birth certificates and personal letters to attest to the fac that I was living common law with him for the above mentioned years.
Comment by Erika on 11 December 2010:

Hi I’m a Peruvian citizen with a Canadian fiance. He is 44 years old and he has been receiving disability because he has had severe depression over the years (he is bipolar) and he did work for a Canadian company for 15 years and then he couldnt work anymore because of his illness. With the money he gets from the pension he came to peru and we want to get married but he isnt sure if is possible to still receive the pension while abroad. He doesnt own a house or anything in Canada and he hasnt have any other family besides 2 sisters and a brother but no former wife or child. He does pay taxes If you could tell me if is possible to still get his pension What is the procedure we must follow? He was asked to get a reassessment but he has been in Peru could he reschedule the appointment? What can he do to still get a pension? Please any advice I will really be grateful or at least where can i get info about it.
Comment by Christian Farstad on 22 August 2011:

If you retire to another country there are ways to get your earned Canadian Pension Plan. There are different rules depending on where you end up living. The different rules are set-up to ensure that you continue to pay taxes on these benefits. Check out this web site for more information Service Canada Website
Comment by Christian Farstad on 22 August 2011:

Barb
You can live outside Canada and collect benefits. Here is more information from Service Canada click here
All the best
Christian Farstad
Comment by Christian Farstad on 17 October 2011:

Margaret
Your friend can appeal the decision without a lawyer. Here is the process Service Canada
All the best
Christian Farstad, CFA, CFP, FCSI
Farstad Retirement
Comment by Christian Farstad on 17 October 2011:

Lynne
Thanks for the note. Based on the information that you have sent me, you would qualify for the full amount of Old Age Security at age 65. I am not sure of how your status would be considered for Canadian Pension Plan. You should call Service Canada and discuss you situation with them directly. The number is 1‑877‑454‑4051.
I hope this helps
Christian Farstad, CFA, CFP, FCSI
Farstad Retirement
Comment by Christian Farstad on 17 October 2011:

MIke
I am not sure how Service Canada would consider your mother. Try contacting them directly. They are generally pretty easy to talk to - 1‑877‑454‑4051
All the best
Christian Farstad, CFA, CFP, FCSI
Farstad Retirement
Comment by Christian Farstad on 17 October 2011:

Shan
Your mother should have access to Old Age Security at some level. Check out this site Old Age Security for more information.
All the best
Christian Farstad, CFA, CFP, FCSI
Farstad Retirement
Comment by Christian Farstad on 17 October 2011:

Gwan
Normally, travelling for 3-4 months a year would not impact residency.
All the best
Christian Farstad, CFA, CFP, FCSI
Farstad Retirement
Comment by Christian Farstad on 27 October 2011:

Doru
If both your spouse and you qualify for OAS you both get it individually. If you both qualify for $524 then you would receive $1048.
All the best
Christian Farstad, CFA, CFP, FCSI
farstadretirement.com
Comment by Christian Farstad on 27 October 2011:

Doru

The CPP is a contribution based system. If you stopped working you will stop contributing and it would normally affect your CPP amount at retirement. You can ask Service Canada for a statement that shows how much you have contributed and therefore how much you could estimate to receive in retirement.

Regarding your question about OAS. Once you qualify for and start receiving OAS your residency claim never increases. So, no, the OAS would not increase once you claim it (except for cost of living increases).

All the best
Christian Farstad, CFA, CFP, FCSI
farstadretirement.com
Comment by Christian Farstad on 8 November 2011:

Doru

The service Canada reports assume that you will be working until age 65 and that you would be continuing to contribute to the CPP program. So, no, you wouldn’t receive that amount if you quit working today and waiting 9 years without contributing to the system.

All the best
Christian Farstad
http://www.farstadretirement.com
Comment by Christian Farstad on 5 December 2011:

Gerry

Your company does not have to make contributions to CPP anymore on your behalf under the current CPP rules.

All the best
Christian Farstad
http://www.farstadretirement.com
Comment by Christian Farstad on 6 March 2012:

Irene
Both full-time and part-time work will add to your Canadian Pension Plan as long as you are contributing to the system. You can contact Service Canada to find out what you have accumulated in benefits so far. Your question regarding how long it takes to get a decent pension is a difficult question to answer because the term decent means something different to every individual.
All the best
Christian Farstad, CFA, CFP, FCSI
My blog
Comment by Christian Farstad on 6 March 2012:

Dave
This is a tough one. Keeping good records is the key. Do you have tax records that go back that far? You should have some sort of employment records such as full-time work that would support your residency.
All the best
Christian Farstad, CFA, CFP, FCSI
My Blog
Comment by Christian Farstad on 6 March 2012:

Irene
There is an appeal process. Check it out here
Best of luck with this
Christian Farstad, CFA, FCP, FCSI
My Blog
Comment by carly budgell on 16 March 2012:

My spouse was born in ottawa and moved to british columbia eight years ago in 2004. He worked and contributed to CPP in ontario. My question is, will he be able to claim his CPP contributions from ontario when the time comes or are you giving up your CPP contributions after three months when you are no longer a resident of that province. So do CP contributions follow you from province to province, or will you lose it when you move ?
Comment by Christian Farstad on 16 March 2012:

Carly

Your CPP contributions follow you no matter where you move in the country.

All the best
Christian Farstad, CFA, CFP, FCSI
My blog
Comment by Lynne on 21 March 2012:

Hi, I was downsized in the latter part of 2010. I’m thinking of applying for CPP in 2015 (age 60) but I will have a total of 9 years of non-payments since age 18. I presume if I wait until later (when I am 65) that the payments will be even less than I’m quoted now, because I would then have 14 years of non-payments. Is that correct? (FYI non-payments were not due to child raising). Thanks.
Comment by GURU on 23 March 2012:

my parents got canadian PR on 22 oct 2011….so my question when will my parents will get pension my mom is 58 nd my dad 60 now nd living in canada after geting pr….
reply
Comment by Sheila on 26 March 2012:

Hi Christian,

Thanks for all your excellent comments and advice given on this site.

I am a canadian resident of some 14 years and qulaify for my canadian pension in 2015.I was born in the UK and qualified for the UK state pension aged 60 in 2010. I have deferred collecting this until 2015, this gives me the option of taking some of it as a UK tax free sum. How would that play out in Canada, would the lump sum be liable for tax? The lump sum would be around $40,000.

Thanks Sheila
Comment by Gilda on 26 March 2012:

Hi Christian - Thanks for all the helpful info you provide. I hope you can help me with some retirement income issues. I will be 65 in September of 2012 and my husband in May of 2013. We both receive pension from OMERS since 2006 (me $1800 / him $3700 monthly) and CPP since age 60 (me $566 / him $595 monthly.) We withdrew $6250 from our RRSP in 2011 that I included with my income. I use a computer program to do our income taxes; it recommended an income splitting amount of $7058 to be added to my income so my taxable income was $45,275 and his was $55,523. It resulted in me owing $1329 and my husband owing $227.69. (Would it make a difference if I add the RRSP income to my husband’s income or add half to each of us before the income splitting?) I am planning to apply for OAS benefits to start at age 65 and think I would receive the average amount, currently $510 monthly. From your previous comments I understand it is important to be careful how our income is split so there is no clawback. I’m not sure how much RRSP income to add each year. Also complicating things is a one-time payment to my husband from an insurance policy that he can take in 2012 or 2013 that is around $12,000. Do you have any advice for us?
Comment by Grant on 2 April 2012:

My wife has never worked outside of the home. When she reaches 65 will she be entitled to OAS as well?
Comment by Suresh Kumar on 3 April 2012:

Hi
I am getting 65 years and entitled for CPP and Old Age Security but my wife is only 59 years (when I will become 65 years)
I have following question:

# Will my wife (she is not working) will get Old Age Security when I apply??
# I mean should I apply as couple for CPP and Old Age Security even my wife is attaining 59 years on my attaining 65 years??

Suresh
Comment by Mary on 5 April 2012:

I just sat reading most of the comments on CPP and OAP pensions. I find most of these very disgusting. People come to Canada, stay for a few years, go back where they came from and expect Canada to pay them pensions. I think it is disgusting and Canada should tell them to all take a hike. I’m fed up with these freeloaders because they usually get what they want while people living, working and contributing in Canada get the run around. I’m tired of it and something needs to be done about it. Just because their own countries won’t give them anything doesn’t mean Canada has to. Also, what is this child rearing pension I saw on a post here. I’ve never heard of that. How does someone from another country know about this. I reared 3 children of my own so I want in on this as well.
Comment by De Alwis on 6 April 2012:

Will I receive my old age pension if I move out of the country.
I also get CPP.
Comment by A Marsh on 25 April 2012:

My husband passed away 28 years ago, I was under 25 at the time and was told I was not eligible for a CPP widows pension because of my age. They told me that when I retired I could collect on his portion, or if I became disabled. I s this true
Comment by A Marsh on 25 April 2012:

Correction to my posting I was under 35 years old (31 to be precise)
Comment by Maggie on 9 May 2012:

My husband died at the age of 59 may 24 2003
I was 57…I am 64 now
My income is 30,000
Have I been eligible for OAS survivors allowance
I receive CPP survivors allowance
Thankyou