Background Image

Understanding The Canada Pension Plan

Loan Express | October 29, 2022

What is the Canada Pension Plan? (CPP)

Loan Express does not require credit checks, decline a loan based off a credit check, nor do credit checks affect the minimum approved amount of the loan. The following article is purely for educational purposes.

The Canada Pension Plan is a monthly, taxable benefit that acts as part of your income when you retire. Valid contributions to your CPP can be from work you did in Canada or as a result of receiving credits from a former partner/spouse at the end of the relationship. 

If you qualify, you’ll receive the CPP retirement pension for the rest of your life. To qualify, you must be at least 60 years of age and have made at least one contribution to the Canada Pension Plan. 

Taxes taken from your paycheck during your working days before turning 60 for CPP are just over 5% of your income. If you are self-employed, you will pay that percentage and the employer’s portion. The longer you wait to collect your Canada Pension Plan benefit, the more it increases (there is a 0.7% increase for every month you choose not to collect CPP past age 65). 

What are the Requirements?

To apply for the Canadian Pension Plan, you must ensure you have the qualifications of being at least 60 years of age and having made valid contributions. If you qualify, you can apply online. There are also mail-in or drop-off options if you complete the necessary form and bring it to a Service Canada office near you.

How to Apply for CPP

To apply for the Canada Pension Plan, you must receive an application to fill out and submit. Those living in Quebec are not eligible for the CPP as the government of Quebec opted out of the program.

Ensure you have your SIN card and banking information handy when filling out the application. To participate in pension sharing, have your partner’s SIN card ready. You also need to provide your children’s SIN information and proof of birth if you want to request a child-rearing provision on your form. The maximum amount of time you can apply before your pension begins is six months.

After you complete the application online or on paper (which means you will have to mail it in or bring it to your closest Service Canada office along with various other documents), you will submit it (electronically, via mail, or in person) and print out the signature page of the application. You will sign this portion and mail it to Service Canada.

What is the Canada Pension Amount?

According to www.canada.ca, this year, the maximum monthly amount you could receive as a new recipient starting the pension at age 65 is $1,253.59. Your situation will determine how much you’ll receive up to the maximum. 

What are the Other CPP Benefits you can Apply For?

Some other Canada Pension Plan benefits you can apply for include:

  • Post-Retirement Benefit. If you continue to work while receiving your CPP and are younger than 70, you can continue to participate in the CPP. Your CPP contributions will go toward post-retirement benefits.
  • Disability Pension. The Disability Benefit is a monthly payment you can receive if you are under 65, have made valid contributions to the CPP, and have a disability that stops you from working or have a long-term/chronic disability.
  • Post-Retirement Disability Benefit. The PRDB is intended for Canada Pension Plan recipients found to be disabled but not eligible for a disability pension due to CPP retirement pension beneficiaries for more than 15 months. Applicants who have made sufficient contributions may qualify for this benefit in addition to their retirement pension.
  • Survivor’s Pension. The Canada Pension Plan survivor’s pension is a monthly payment paid to the spouse or common-law partner of the deceased contributor.
  • Children’s Benefit. The Canada Pension Plan children’s benefits provide monthly payments to the dependent children of disabled or deceased CPP contributors. You can choose one of two benefits based on whether the contributor is disabled or deceased. The child must be under 18 or under 25 and attending a post-secondary institution full-time. 
  • Death Benefit. The Canada Pension Plan death benefit is a one-time payment payable to the estate or other eligible individuals on behalf of a deceased CPP contributor. The deceased must have paid into the CPP for no less than 3 years.

Can I Get a Payday Loan with CPP from Loan Express?

Yes, you can use your Canada Pension Plan to get a loan with Loan Express, as we consider CPP as a source of income. Our fast and easy loans are accessible and can help you pay off debt, treat yourself, or fund the last financial requirement of that dream vacation you’ve always planned on taking. Enjoy your retirement with Loan Express and rid yourself of any money worries – it’s time to relax!