CPP Payment Dates 2022
As you’re probably aware, the CPP, or Canada Pension Plan, is a program intended to offer an income alternative for retired Canadians. It works a little like this: Canadians make contributions to the program throughout their working years, and then collect benefits from their date of retirement to the end of their life.
While it’s a pretty straightforward benefit to receive, there are still many questions that commonly come up surrounding the CPP. In this article, we’ll go over the important information that you need to know about CPP payments in 2022, including CPP payment dates, requirements, and other important changes that you should be aware of. Let’s dive in!
Table of Contents
CPP Payment Dates for 2022
First thing’s first, when should you expect CPP payments in 2022? Here’s the dates to keep your eye out for, according to the Government of Canada:
- January 27, 2022
- February 24, 2022
- March 29, 2022
- April 27, 2022
- May 27, 2022
- June 28,2022
- July 27, 2022
- August 29, 2022
- September 27, 2022
- Octiber 27, 2022
- November 28, 2022
- December 21, 2022
How much CPP will you receive?
Here’s the estimated average retirement income you can expect from the CPP in 2022:
|Year||Average monthly amount||Maximum monthly amount|
*Rough estimation based on % increase in maximum CPP earnings in 2022
Will you have to pay tax on CPP ?
Yes. Because your CPP pension counts as taxable income. You will have to pay income tax on all of the CPP income that you earn on a quarterly basis.
If you prefer to have your tax contributions automatically deducted from your pension payments, you can request this from the federal government either online, through the mail, or in-person at a Service Canada office.
If you are receiving CPP payments but are not a resident of Canada, you will notice that the non-resident tax will be deducted from your CPP payments. This happens at a rate of 25% or less, depending on whether or not a tax treaty exists between Canada and the country of your residence. Canada has tax treaties with over 100 countries. If you’d like to request an adjustment in the amount that is removed automatically, you can also do that using the same forms mentioned above.
Maximizing CPP benefits
Many individuals wonder whether or not it’s possible to maximize the CPP benefits that they receive. The answer to this question is technically “yes”—but it’s not always easy.
In order to maximize the amount of CPP retirement pension that you receive, you will have to make the maximum CPP contribution for many of your working years. The maximum CPP contribution amount is set out by the federal government and is re-evaluated every year. It’s referred to as the Year’s Maximum Pensionable Earnings, or YMPE. For 2021, the YMPE is set at $61,600.
However, in order to make the most out of your CPP benefits, you would need to have been making the YMPE for several years in a row. You will also need to avoid any years of unemployment.
Other types of CPP Benefits
Worried that you’re not getting enough out of your standard CPP benefits? Fortunately, there are some other types of CPP benefits that you can look into as well:
CPP post-retirement benefit
If you are under the age of 70 and continue to work while you’re receiving your CPP pension, you may be eligible for the CPP post-retirement benefit. Any contribution that you make during this time will be paid to you in your CPP pension once you fully retire.
When you’re 65, the government gives you the option of stopping your CPP post-retirement benefit contributions. Regardless of whether or not you stop working at age 70, your contributions to the post-retirement benefit programs stop.
CPP disability pension
This post-retirement benefit is another option for Canadians who are living with a disability. However, those eligible to receive it should take note that it’s not possible to receive both your CPP payments at the same time as your CPP disability pension. Instead, the federal government will automatically change your CPP retirement pension into a CPP disability pension when you turn 65.
CPP post-retirement disability benefit
If you are under 65 years of age and receiving the CPP retirement pension, you may be eligible for the CPP post-retirement disability benefit. In order to qualify, you will need to have a severe and long-term disability. You will also need to have made enough CPP contributions in order to qualify. This benefit is not applied automatically—it must be applied for.
If you are receiving CPP benefits and have a dependent child, you may be eligible for the children’s benefit. In order to qualify as a dependent, the child must be under the age of 18 (or 25 if they’re attending school).
CPP survivor’s pension
In the event that a CPP contributor passes away, their legal partner will receive their CPP contributions. In order to qualify, the recipient must either have been legally married to the deceased contributor or have been recognized as common-law. For these purposes, a common-law partner is a person of either the same or opposite sex who has lived together in a conjugal relationship for one year or more. This benefit may also be available to separated legal spouses in certain cases.
The death benefit differs from other CPP benefits in that it is a one-time payment. It is paid out to eligible individuals (or to the estate) when a CPP contributor passes away.
Applying for CPP benefits
Applying for CPP benefits is easy and consists of the following steps:
1. Determine your eligibility. In order to receive CPP benefits, you must be at least 60 years of age and have made at least one valid contribution. A contribution usually comes as a result of work that you performed in Canada, but can also come from benefiting from the work that a former spouse/common-law partner did.
2. Determine when the benefits should start. Depending on your situation, you may choose to either start receiving your pension on the date of your first eligibility, or once you turn 65.
3. Submit an application. In some cases, such as if you live outside of Canada, are making your application through a power-of-attorney, or have a denied CPP benefit in your history, you will have to send in a paper application. In other cases, you can apply online through your My Service Canada (MSC) account. If you don’t have an MSC account, you can register for one.
4. Keep an eye on your application status. If you applied for CPP benefits online, you can log into your MSC account to look for updates on your application. Otherwise, you’ll have to contact CPP directly.
At what age should you apply for CPP ?
There are often many questions over when you should apply for CPP, and whether or not there are advantages to when you apply.
For most Canadians, it makes sense to start your pension at the age of 65. However, you do have the option of receiving your benefit as young as 60 or as late as 70. Note, though, that if you do decide to receive your pension at a younger age, the monthly amount that you’ll receive will be lower. Likewise, if you push off your payments until a later date, you will receive larger monthly payments.
There isn’t any advantage to pushing your payments back past the age of 70. Once you reach age 70, you will max out the amount of monthly payments that you are eligible to receive.
If you make your CPP application after turning 65, you may be able to receive some retroactive payments. These payments can go up to 11 months.
CPP changes in 2022
The Canada Revenue Agency (CRA) has already set out the upcoming contribution limits for the year 2022. Earlier we mentioned that the maximum earning level was $61,600 annually—this has now been increased to $64,900.
The employee/employer contribution rates are also rising. They were previously 5.45%, and they will now be 5.7%. The self-employed contribution rate was previously 10.9%, but now it’s 11.4%.
CPP vs OAS Payments
It is common to be confused about the difference between CPP and OAS. While CPP is a benefit pension plan, it’s not technically part of government assets. It is funded by the contributions of Canadians and their Canadian employers.
OAS, however, is government-funded. This means that it will not be deducted from paycheques. It stands for Old Age Security and is paid out to Canadians who meet certain citizenship and residency requirements. First payments can be received one month after turning 65.
The Bottom Line
The CPP is a useful benefit, and if you’re approaching retirement age it’s worth your while to research as much as possible about how this benefit can affect you. This includes knowing when the best time to start collecting this benefit will be, as well as how much you can expect from your pension payments. Happy retirement!
Frequently Asked Questions
Yes. If your spouse or legal common-law partner passes away, you will likely be eligible to collect their CPP payments. The pension is usually paid to the person who was either married to the deceased spouse at the time of death or who was the common-law partner, however, if the deceased does not have a common-law partner the separated spouse may be eligible for their CPP payments. If you are widowed more than one time, you will be eligible for the larger of the CPP payments.
You can apply for CPP benefits as early as age 60 and as late as age 70. The more advantageous option will depend on your particular situation. If you are healthy and have an outlook for a long life, it may make sense to delay your payments as long as possible. If you wait until the age of 70 to collect CPP payments, you will see an increase in your monthly payment.
Good news! Even if you move outside of Canada, you can still collect your CPP. One major difference is that you will see a standard 25% tax deduction on your monthly payments. Unlike the default for CPP payments, this deduction will be made automatically. Important: in order for this deduction to be made, the country that you’re residing in must share a tax treaty with Canada. Countries that share tax treaties with Canada include the United States and the United Kingdom.