income security programs old age security canada pension plan international agreements

Human ResourcesDevelopment Canada

Développement desressources humaines Canada

Income Security Income Security ProgramsPrograms

•Old Age Security

•Canada Pension Plan

•International Agreements



• In general, 70% of pre-retirement income is required

• OAS and CPP retirement pensions are designed to replace about 40% of thepre-retirement income

• $14,500 (2001)

Canada’sCanada’sRetirement Income Retirement Income

System System



•Cornerstone of Canada’s Retirement income system

•Financed from general tax revenues

Old Age SecurityOld Age Security



• 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 SecurityOld Age SecuritySustainabilitySustainability



Old Age SecurityOld Age Security

BenefitsBenefits

•Old Age Security pension

•Guaranteed Income Supplement•The Allowances



Based on:

•Age•Legal Status•Years of Residence

OAS PensionOAS Pension



ResidenceResidence RequirementRequirement

FullFull or PartialPartial OAS pension

depends on the years of living in Canada

OAS PensionOAS Pension



People living inin Canada

• need 10 years10 years after 18

People living outsideoutside of Canada

• need 20 years20 years after 18

Partial OAS PensionPartial OAS Pension



Rate = 1 for each year in Canada 40 after age 18

International Agreements can be

used when there are not enough years in Canada.

Partial OAS PensionPartial OAS Pension



Protects social security rights

Current

Agreements:

38 countries

International International AgreementsAgreements



Antigua/ Finland Korea St. Kitts/Nevis

Barbuda France Luxembourg St. Lucia

Australia Germany Malta St. Vincent/

Austria Greece Mexico Grenadines

Barbados Grenada Netherlands Sweden

Belgium Iceland New Zealand Switzerland

Chile Ireland Norway Trinidad /

Croatia Italy Philippines Tobago

Cyprus Jamaica Portugal United Kingdom

Denmark Jersey / Spain United States

Dominica Guernsey




•Help to meet eligibility rules

* Total Time

* Prorate payment




Must:

• receive OAS pension

• reside in Canada

• have low income

Supplement - GISSupplement - GIS



Based on:

•rate of OAS pension

• income

•marital status

Paid on a sliding scale

GIS AmountGIS Amount



SpouseSpouse• legally married person

Common-law partnerCommon-law partner•person cohabiting in a conjugal

relationship for at least one year

•same sex or opposite sex

DefinitionsDefinitions



AllowanceAllowance

Paid to the younger partner if:

• age 60 to 64• couple’s

income is low• residence

rules are met

Paid on sliding scale



Paid if:• age 60 to 64• a survivor• residence rules are

met

Paid on sliding scale

Allowance for the SurvivorAllowance for the Survivor



• Began in January 1966

• Compulsory contributions based on earnings

• Self-supporting

• Payable outside Canada

• Québec has a similar program

Canada Pension PlanCanada Pension Plan



• Workers pay into CPP during earning years

• To protect against future loss of

income due to retirement retirement

disability disability

deathdeath




Contribution Rates Contribution Rates ScheduleSchedule

Employee Employer Self-Employed

2000 3.9% 3.9% 7.8%

2001 4.3% 4.3% 8.6%

$1,496.40 $1,496.40 $2,992.80

2002 4.7% 4.7% 9.4%

2003 4.95% 4.95% 9.9%



• $3,500 - Year’s Basic Exemption (YBE)

• $38,300 - Year’s Maximum Pensionable

Earnings (YMPE)

Pensionable EarningsPensionable Earnings

$3,500$0 $38,300

Pensionable Earnings for 2001



StartsStarts

• January 1966

or

• month after 18th birthday

Contributory PeriodContributory Period

EndsEnds

• month before Retirement pension

• month age 70

• month of death



• Periods of CPP disability

• Periods during which children were raised

• Plus 65 years of age

• 15%

Drop-Out ProvisionsDrop-Out Provisions



Drop-Out ProvisionsDrop-Out ProvisionsExampleExample

January1966

Year 2001

Age 65

Contributory Period36 Years

20 years after drop-outs

1. Periods of CPP Disability (1985 to 1990) 6 Years2. Raising Children (1968 to 1974) 7 Years3. 15% (36 - 13 = 23 years x 15%) 3 Years

1968 - 1974 1977 - 1978 1985 - 1990 1982



Statement of Statement of ContributionContribution

ss

• Sent annually• Records

earnings after age 18




• Employment-based contributions

• Self-supporting (contributions, interests and earnings from investments)

• Financially sound - 17th Actuarial Report

Canada Pension PlanCanada Pension PlanSustainabilitySustainability



• Separate Act - Minister of Finance

• 12 members - Provincial representation

• Operates at arm’s length from government

• Professionally manages the CPP surplus accrued since 1998

• Subject to the same investment rules as other pension funds

• Reports investments and returns regularly

CPP Investment BoardCPP Investment Board



• RetirementRetirement

• DisabilityDisability

- Children’s benefits

• SurvivorSurvivor

- Death benefit

- Survivor pension

- Children’s benefits

CPP BenefitsCPP Benefits



• Need one valid contribution

• Retirement Choices

EarlyEarly - age 60 to 65

StandardStandard - age 65

LateLate - age 65 - 70

CPP Retirement PensionCPP Retirement Pension



• must have stopped or stopped or substantially stopped worksubstantially stopped work

• pension is reducedreduced by 0.5% for each month under age

65

Early Retirement PensionEarly Retirement Pension



• no no need to stop work

• pension is increased increased by 0.5% for each month over age 65

Late Retirement PensionLate Retirement Pension



Rules:

• Under age 65

• Paid long enough and recently enough

• Disability must be both severe and prolonged

CPP Disability BenefitCPP Disability Benefit



A child of the disabled contributor

• under 18 or• 18 to 25, at school• flat rate

Children’s BenefitChildren’s Benefit



Vocational RehabilitationVocational Rehabilitation ProgramProgram

• designed to help recipients of CPP Disability benefits return to work

• Voluntary

Disability BenefitDisability Benefit



Earnings RequirementsEarnings Requirements

• 1/3 1/3 of years in contributory period up to 10 years 10 years

•never less than 3 3 yearsyears

Survivor BenefitsSurvivor Benefits



•Paid to the survivor of the deceased contributor

• legal spouse or common-law partner

CPP Survivor’s PensionCPP Survivor’s Pension



A child of the deceased contributor

•under 18 or•18 to 25, at school

•payment is a flat rate

Children’s BenefitChildren’s Benefit



• Retirement $ 13.3 billionbillion

• Disability $ 2.5 billionbillion

• Survivor $ 2.7 billionbillion

• Death benefit $ 232 millionmillion

• Children $ 440 millionmillion

Amounts PaidAmounts Paid



70%

13%

14%

1%2%

Retirement

Disability

Survivor

Children

Death

CPP Current Benefit CPP Current Benefit PaymentsPayments



How to reach us ?How to reach us ?

Call toll free:Call toll free:1 800 277-9914

English

1 800 277-9915 French

1 800 255-4786 TDD/TTY

Visit our web at:Visit our web at:

www.hrdc-drhc.gc.ca/ispwww.hrdc-drhc.gc.ca/isp

income security programs old age security canada pension plan international agreements

Documents

canada oas pension slide

survivor slide

partial oas pension

sliding scale slide

government of canada

opposite sex definitions

pre retirement income

preretirement income