The Canada Pension Plan (CPP) Retirement Pension provides a monthly taxable benefit to retired contributors. CPP is delivered nu Service Canada on behalf of Human Resources and Skills Development Canada (HRSDC).
How do I qualify?
You qualify for a CPP retirement pension if you worked, you have made at least one valid contribution (payment) to the Canada Pension Plan, and you are:
- at least 65 years old; or
- between age 60 and 65, and you meet the requirements of the work cessation test (see definition below).
Your retirement pension does not start automatically. You must apply for it.
If you are receiving a CPP disability benefit and you turn 65, your disability benefit automatically changes to a retirement pension. See "What happens to my disability benefit when I turn 65?".
What is the work cessation test?
The work cessation test is a requirement that people who want to take their CPP pension before age 65 must meet. The work cessation test is only in effect until the end of 2011.
To meet the work cessation test, you have to either:
- Stop working and receive no earnings – This means that you are not working by the end of the month before the CPP retirement pension begins and during the month in which it begins.
Example: If you want your pension to begin in April, you have to stop working by the end of March and you cannot work during the month of April.
- Earn less than a specified amount – This means you earn less than the current monthly maximum CPP retirement pension payment ($960 in 2011) for at least two consecutive months–in the month before your pension begins and in the month in which it begins.
Example: If you want your pension to begin in April 2011, you need to earn less than $960 in both March and April.
Once you start receiving your CPP retirement pension, you can work as much as you want.
Starting in 2012, the work cessation test will be eliminated. For this reason, you will be able to start receiving a reduced CPP retirement pension as early as age 60 without having to stop working or reduce your earnings.
For more information regarding CPP, including the affects of age on pension, payment rates and when to apply, please visit Service Canada's CPP website by clicking here.