The Canada Pension Plan (CPP) is one of the most important sources of income for retired Canadians.
Your Old Age Security (OAS) payments might get clawed back, but your CPP will get paid out no matter what your income is.
Knowing at what age to start your CPP is crucial to planning out your retirement income in your golden years.
If you’re wondering when is CPP paid in 2020, you’ve come to the right place:
CPP Payment Dates 2020
Here is the CPP payment schedule for 2020:
- January 29, 2020
- February 26, 2020
- March 27, 2020
- April 28, 2020
- May 27, 2020
- June 26, 2020
- July 29, 2020
- August 27, 2020
- September 28, 2020
- October 28, 2020
- November 26, 2020
- December 29, 2020
Note that these days include your payments for the following:
- CPP retirement pension (the most common one)
- CPP disability (Find out if you qualify)
- CPP children’s benefits
- CPP survivor’s benefits
Average vs. maximum CPP received
The average CPP Canadians received in October 2019 was $672.87 per month if CPP was started at age 65. The maximum CPP in October 2019 was $1,175.83 per month.
Continue reading to see how you can receive the maximum CPP payment.
How to calculate CPP
How much CPP you receive will be based on two main things:
- How much your income was from age 18-65
- If you made the proper CPP contributions for those years
You can get an estimate of your CPP payments by signing into your My Service Canada Account on the Canada.ca website, and request an estimate of your CPP benefits. You will need to register for the service, and require a CPP personal access code from Service Canada.
Call Service Canada 1-800-277-9914 if you’re having trouble, and they can help walk you through the process.
It’s a bit of a complicated process, but the easiest way to accurately figure out your CPP payments if you are reasonably close to retirement. The farther away from retirement you are, the harder it will be to calculate since it’s hard to know what your income will be.
How to get the maximum CPP Payout
To receive the maximum CPP payments, you must have earned an income equal or higher than the Yearly Maximum Pensionable Earnings (YMPE) for 39 out of the 47 years between the ages of 18-65.
The YMPE for 2020 is $58,700. Here’s a link to the YMPE list for all prior years.
One way to estimate how much CPP payments you will receive is by comparing your income to your YMPE. If, for example, you had earned around 50% of the YMPE over 39 out of the 47 years between ages 18-65, you will receive about 50% of the max CPP payments.
Here are the two most common provisions that could boost your CPP payouts:
- Low-income years dropout – You can drop out 17% of the months of your career where you earned the least. Up to eight years of your lowest earnings can be removed from the CPP calculation.
- Child-rearing dropout – If you were the primary caretaker of a dependent child under the age of seven and your income was affected by it, and you may be able to drop some of those years from the CPP calculation.
CPP contributions increase in 2020
The good news is that your CPP payouts will increase after 2020s changes. The bad news is, the amount that you contribute to your CPP will also increase. The CPP is now designed to replace one-third of your averaged lifetime earnings, an increase from 25% previously.
Employee and employer contribution rates for 2020 is 5.25%, an increase from 5.1% in 2019.
If you’re an employee, you don’t have to worry about these changes when filing for your taxes, as CPP should be deducted directly from your paycheque. If you’re self-employed, make sure you’re setting aside the extra amount every month for CPP.
Should you take your CPP at age 60, 65, or 70?
Knowing when to take your CPP payments is an important part of planning out your retirement. What age to start the CPP depends on your situation.
Here’s a detailed guide on when you should start taking your CPP – Should You Take Your CPP at 60, 65, or 70?
Is CPP taxable?
Yes, your CPP is considered part of your taxable income after you start collecting payments.
Can your CPP get clawed back?
No, it can’t be clawed back. Unlike your Old Age Security (OAS), your CPP can’t be clawed back in retirement, even if you have a very high income after you start collecting your CPP payments.
Read about 13 simple ways to avoid the OAS clawback here.
CPP Pension Disability
If you are disabled, you might qualify for the CPP pension disability. Read my full guide here on if you qualify for the pension disability.
Can you receive a CPP pension payout if you move away from Canada?
Yes. No matter what country you live in, you can receive your CPP pension payouts.
If you become a non-resident of Canada and resident of another country:
- The CRA will keep a 25% withholding tax on your CPP payments, which could be waived depending on the tax treaties with Canada and the country you are living in.
- Payments can be made in the currency of the country you live in, or in Canadian dollars.
Lesser-Known CPP Benefits
Here are some under-the-radar CPP benefits that many Canadians aren’t aware of:
- CPP Survivor’s Pension – Paid to the spouse or common-law partner of a deceased CPP contributor.
- CPP Disability Pension – CPP contributors who have a “severe and prolonged” disability could qualify.
- CPP Death Benefit – $2,500 is paid out to the estate of a deceased CPP contributor.
- CPP Children’s Benefit – Dependent children under the age of 18, or 25 if in school full-time, of a deceased or disabled CPP contributor can receive this payment.
- Post-Retirement CPP – You can continue to make CPP contributions up to age 70, which will boost your CPP payout.
CPP payment dates for 2020 are helpful to know. It’s also helpful to understand how to calculate CPP payments, and most importantly, when to start taking your CPP payments from the ages of 60 to 70.