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SOCIAL DEVELOPMENT CANADA. Income Security Programs. SOCIAL DEVELOPMENT CANADA. Income Security Programs. Old Age Security (OAS) Canada Pension Plan (CPP) International Social Security Agreements 1 800 277-9914 Canada's Retirement Income System.

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income security programs1


Income Security Programs
  • Old Age Security (OAS)
  • Canada Pension Plan (CPP)
  • International SocialSecurity Agreements
  • 1 800 277-9914


Retirement Income System

the 3 levels of canada s retirement income system
The 3 levels of Canada’s Retirement Income System

3Private SavingsEmployer Pensions

2 Canada Pension Plan Québec Pension Plan

1 Old Age Security

canada s retirement income system
Canada’s Retirement Income System
  • In general, 70% of pre-retirement income is required
  • OAS and CPP retirement pensions are designed to replace about 40% of thepre-retirement income
canada s retirement income system1
Canada’s Retirement Income System
  • On average, 70% of pre-retirement income is required to maintain pre- retirement lifestyle
  • The OAS pension and CPP Retirement pension are designed to replace about 40% of the average pre-retirement income
  • Maximum OAS and CPP retirement benefits in year 2006 is about $16,000
old age security sustainability
Old Age Security Sustainability
  • Financed from general tax revenues of the Government of Canada
  • OAS on solid ground - Actuarial studies
  • Canada’s Gross Domestic Product (GDP) and individual incomes to rise
old age security benefits
Old Age Security Benefits
  • Old Age Security pension (OAS)
  • Guaranteed Income Supplement (GIS)
  • Allowance
  • Allowance for the Survivor
old age security oas pension
Old Age Security (OAS) Pension
  • Based on age, legal status, and years of residence in Canada
  • 2 types of pension - Full and Partial
  • Taxable
  • May be subject to OAS Repayment of Benefits
oas pension
OAS Pension


  • be 65 years ofage or more;
  • meet the legalstatus andresidencerequirements;
  • apply in writing
oas pension legal status requirement
OAS PensionLegal Status Requirement

Must be:

  • a Canadian citizen; or
  • a legal resident of Canada; on the day preceding the approval of your application or on the day before the day you stopped living in Canada.
oas residency requirement
OAS Residency Requirement

People living inCanada

  • Must be a Canadian citizen or a legal resident at the time your application is approved
  • Must have resided in Canada for at least 10 years after the age of 18
oas residency requirements
OAS Residency Requirements

People living outside of Canada

  • Must have been a Canadian citizen or a legal resident of Canada when you left Canada
  • Must have resided in Canada for at least 20 years after the age of 18
full oas pension
Full OAS Pension


  • have resided in Canada for at least40 years after age 18 and before your application is approved; or
  • meet the 10 years residence rule; or
  • meet the “3 for 1” residence rule.
full oas pension 3 for 1 residence rule
Full OAS Pension“3 for 1” Residence Rule






Need 3 years ofresidence

For each year ofabsence

partial oas pension
Partial OAS Pension
  • You do not qualify for a full OAS pension
  • 1/40th of a full OAS pension for each full year of residence in Canada after age 18
  • Minimum of 10 years residence required
  • Once approved, a partial OAS pension will not be increased following additional years of residence in Canada

To have the OAS pension paid outside Canada, you must:

  • have 20 years of residence in Canada after age 18; or
  • meet the 20-yearresidence throughone of Canada’sInternationalAgreements withanother country.
oas repayment of benefits
OAS Repayment of Benefits
  • OAS pension higher-income pensioners
  • Net World Income from $62,144 to $100,914 (2006)
  • 15% for residents, varies for non-residents
  • Based on previous year’s income


guaranteed income supplement gis
Guaranteed Income Supplement (GIS)
  • For low-income seniors
  • Added to the OAS pension
  • Based on income and marital status
  • Based on combined income, if the applicant has a spouse/partner
  • Not taxable


  • be in receipt of an OAS pension;
  • reside in Canada;
  • apply in writing.
  • For low-income seniors who meet the eligibility conditions
  • Based on combined income from the previous year
  • Not taxable
  • Must apply in writing

Must be:

  • between the ages of 60 and 64;
  • the spouse/common-law partner of a GIS recipient;
  • a Canadian citizenor a legal resident(same as OAS);
  • a resident of Canadafor at least 10 yearsafter age 18
allowance for the survivor
Allowance for the Survivor
  • For low-income seniors who meet the eligibility conditions
  • Based on previous year’s income
  • Not taxable
  • Must apply in writing
allowance for the survivor1
Allowance for the Survivor

Must be:

  • between the ages of 60and 64;
  • a survivor;
  • a Canadian citizen or legal resident (same as OAS);
  • a resident of Canada for at least 10 years after

age 18.

allowance and allowance for the survivor at age 65
Allowance and Allowance for the Survivor at age 65:
  • At age 65, the Allowance and Allowance for the Survivor stops,must apply for OAS Pension
  • May also qualify for the GIS
maximum net income allowed
Maximum Net Income Allowed

Jan to March 2006

GIS – Single $ 14,256 Table 1

GIS Married - Spouse/Partner is:

  • an OAS pensioner (65+)$ 18,720 Table 2
  • a Non-pensioner (under 60)$ 34,368 Table 3
  • an Allowance pensioner (60-64) $ 34,368 Table 4

Allowance $ 26,496 Table 4

Allowance for the Survivor $ 19,368 Table 5

(widow/widower 60-64)


  • GIS, Allowance andAllowance for theSurvivor may only be paid outside of Canada for the month of your departure and for the following six months
  • GIS, Allowance and Allowance for the Survivor must be renewed each year
  • They are renewed automatically if you file your income tax return prior toApril 30


canada pension plan
Canada Pension Plan
  • Began in January 1966
  • Employment-based contributions
  • Self-supporting
  • Payable outside Canada
  • Reviewed and revised regularly
  • Québec has a program with similar benefits
cpp investment board
CPP Investment Board
  • Professionally manages the CPP fund,not needed to pay benefits
  • Broadly subject to the same investment rules as other pension funds
  • Reports its investments and returns regularly

contributions for year 2006
Contributions for Year 2006

Maximum Contributory Earnings:

$42,100 (YMPE) - $3,500 (YBE) = $38,600

Employee Rate: 4.95%

Amount: $1,831.50

Employer Rate: 4.95%

Amount: $1,831.50

Self-Employed Rate: 9.9%

Amount: $3,663

contribution rates schedule
Contribution Rates Schedule

Year Employee Employer Self-Employed

2000 3.9% 3.9% 7.8%

2001 4.3% 4.3% 8.6%

2002 4.7% 4.7% 9.4%

  • 4.95% 4.95% 9.9%

2006 4.95% 4.95% 9.9%

(Contribution Rate will now be maintained at this maximum rate of 9.9%)

adjusted earnings
Adjusted Earnings
  • Protects pension by taking growth of wages into account
contributory period
Contributory Period

Starts (later of):

  • January 1966; or
  • month after your 18th birthday.
contributory period1
Contributory Period

Ends (first of):

  • month before your Retirement pension starts; or
  • month you reach age 70; or
  • month you die; or
  • when eligible for Disability benefits.
contributory period example
Contributory Period Example
  • Ends (first of):
  • retirement; or
  • age 70; or
  • death
  • Starts (later of):
  • January 1966; or
  • age 18

Age 60

Age 65

Age 70


(Flexible start date option)

canada pension plan1
Canada Pension Plan

Statement of


  • Sent periodically
  • 1 877 454-4051
drop out provisions
Drop-Out Provisions
  • Periods of CPP Disability
  • Periods during which children were raisedup to age 7
  • Plus 65 years of age
  • 15% of the lowest earning years in your contributory period(calculated last on remaining years)
drop out provisions example
Drop-Out ProvisionsExample:

Year 2005Age 65

1968 - 1974


1977 - 1978

1985 - 1990

Contributory Period40 Years23 years after drop-outs

(approximate only as calculation actually uses months)

1. Periods of disability (1985 to 1990) 6 Years

2. Raising children (1968 to 1974) 7 Years

3. 15% (39 - 13 = 26 years x 15%) 4 Years

child rearing drop out
Child Rearing Drop-Out

Must have:

  • a child born after December 31, 1958;
  • left or reduced work to care for the child while under the age of 7;
  • received the FamilyAllowances; or
  • been eligible for theChild Tax Benefit.

Must apply in writing

credit splitting
Credit Splitting
  • “Credits” may be divided upon divorce, legal annulment or separation of spouses or common-law partners
  • “Credits” may create eligibility or increase/ decrease entitlement toCPP benefits
  • Applicant’s ex-spouse/ex-partner is notified ofthe request in writing
canada pension plan benefits
Canada Pension Plan Benefits
  • Retirement pension
  • Disability benefit
    • Disabled Contributor Child’s benefit
  • Survivor benefits
    • Death benefit
    • Survivor’s benefit
    • Surviving Child’s benefit
retirement pension
Retirement Pension

May start receiving theRetirement pension:

 between age 60 and 65;

 at age 65;

 between age 65 and 70.

  • Must have made at least one valid contribution
  • Must apply in writing
  • Taxable
flexible retirement pension
Flexible Retirement Pension

Between 60 and 65:

  • Amount decreased by 0.5% for each month under age 65
  • Maximum decrease of 30%
  • No re-adjustment of pension amount at age 65


flexible retirement pension1
Flexible Retirement Pension

Between 60 and 65

  • No retroactivity
  • Stop or earn up to a maximum amount for period of time
  • Stops contributing to CPP/QPP
substantially ceased working cessation test for early retirement
Substantially Ceased WorkingCessation Test For Early Retirement
  • Earnings from employment must be below the maximum monthly CPP Retirement pension
  • Only for the month before the Retirement pension starts and for the month the pension starts being paid
  • Max. of $844.58 for each month (2006)
flexible retirement pension2
Flexible Retirement Pension

Between 65 and 70

  • Increased by 0.5% for each month over age 65
  • Maximum increase of 30%
  • Retroactivity of maximum of 11 months prior to application (back to age 65 only)
  • Cannot contribute after age 70
sharing your retirement pension
Sharing Your Retirement Pension

Sharing your Retirement pension withyour spouse or common-law partner.

canada pension plan disability benefit
Canada Pension Plan Disability Benefit

Number of beneficiaries

(2002/2003): 285,000

Max. monthly basic benefit (2006): $1,031.05

Total expenditure

(2002/2003): $ 2.8 B

disability benefit
Disability Benefit
  • Under age 65
  • Paid contributions for the minimumqualifying period
  • Disability both severe and prolonged
  • Must apply inwriting
minimum qualifying period
Minimum Qualifying Period

Applicants disabled after January 1, 1998

  • 4 of last 6 years in the contributory period
  • 4 years, if there is less than 6 years in the contributory period


minimum qualifying period1
Minimum Qualifying Period

Applicants disabled after January 1, 1998

Earnings must be at least 10% of YMPE (Disability Basic Exemption - DBE) rounded down to nearest $100

YMPE for 2006 is $42,100

DBE for 2005 is $4,200

minimum qualifying period2
Minimum Qualifying Period

Applicants considered disabled before 1998

  • 5 of last 10 years; or
  • 5 years, if less than 10 years in the contributory period; or
  • 2 of last 3 years; or
  • 2 years, if only 2 years in the contributory period.
disability benefit1
Disability Benefit

Severe and Prolonged


  • condition prevents from doing any type of work on a regular basis.


  • condition is long term or may result in death.
disability benefit2
Disability Benefit

Eligibility Provisions for Late Applicants

  • Protects eligible applicants who are late applying
  • Must meet the minimum qualifying period at time considered disabled
  • Up to 12 months retroactive payments
disability benefit3
Disability Benefit

Vocational Rehabilitation

  • Vocational Rehabilitation Program is designed to help recipients of CPP Disability benefits return to work
  • Started in 1995
  • Voluntary
disability benefit4
Disability Benefit

Vocational Rehabilitation

  • Motivated toreturn to work
  • Doctor agrees
  • Signs a consentto participate
disability benefit at age 65
Disability Benefit at Age 65
  • At age 65, the Disability benefit is replaced by the CPP Retirement pension
canada pension plan2
Canada Pension Plan

Survivor Benefits

survivor benefits
Survivor Benefits

Minimum Contribution Required

  • Deceased contributor must have paid into CPP for 1/3 of their contributory period


  • 10 years (whichever is less)


  • have a minimum of 3 years of contributions
canada pension plan3
Canada Pension Plan

Death Benefit

Max. lump sum benefit (2006): $2,500

Total expenditure (2002/2003): $234 M

death benefit
Death Benefit
  • Paid to the representative of the estate
  • If there is no estate,the benefit is paid to:

1) person or agency responsible for the funeral expenses;

2) survivor (spouse or common-law partner);

3) next-of-kin.

canada pension plan4
Canada Pension Plan

Survivor’s Benefit

Number of beneficiaries

(2002/ 2003): 907,000

Max. monthly benefit (2006): $471.85 (-65)

$506.75 (+65)

Total expenditure (2002/2003): $3.1 B

survivor s benefit
Survivor’s Benefit
  • Paid to the survivor of the deceased contributor
  • Survivor must be overage 35, or have adependent child,or be disabled
  • Benefit continues uponchange in marital status
  • Up to 12 monthsretroactive payments
  • Taxable
  • Must apply in writing
canada pension plan5
Canada Pension Plan

Combined Benefits

Retirement pensionor Disability benefit

Survivor’s benefit

Combined benefits

canada pension plan6
Canada Pension Plan

Child’s Benefit

Number of beneficiaries (2002/2003):

Disabled Contributor Child’s benefit 90,000

Surviving Child’s benefit 86,000

Flat-rate monthly benefit (2004): $200.47

Total expenditure (2002/2003):461M

child s benefit
Child’s Benefit
  • Dependent child of a deceased or disabled contributor
  • Maximum oftwo benefitsmay be paidper child
  • Taxable
  • Must apply in writing
full time attendance at school
Full Time Attendance at School
  • Acceptable educational institution
  • Benefits paid during vacation period
  • Must confirmattendance eachyear/semester
  • May be deemedin school, ifabsence is dueto illness


Social Security Agreements



  • Reconsideration
  • Review Tribunal
  • Pension AppealsBoard
direct deposit
Direct Deposit
  • Bank, Credit Union or Financial Institution
  • 81% of ISP clients receive their monthly payment through direct deposit
start planning today
Start Planning Today

Things to do now!

  • Social Insurance Number
  • Birth certificate
  • Marriage certificate
  • Citizenship certificate
  • Immigration/legal status
  • Passport
  • Will
  • Statement of Contributions
how to reach us
How to reach us ?

1 800 277-9914 (English)

1 800 277-9915 (French)

1 800 255-4786

(TDD/TTY device)