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When you start receiving your CPP retirement pension from the government, there’s a maximum amount you can receive; however, how much you actually receive is based on your individual circumstances. The maximum amount is based on paying CPP contributions for the maximum number of years, which not everyone does. No matter how much you receive, though, the amount will continue to increase with the rate of inflation.
Getting CPP in Canada if You Only Worked for 5 Years
If you only worked for 5 years, you’re eligible to receive CPP as long as you’ve made one valid contribution to CPP. However, you don’t have to have worked in order to make that valid contribution. You can also make that contribution by receiving credits from a former spouse or common-law partner after the relationship ends.
If you did work for 5 years, your CPP payments are going to be much smaller than someone who has worked their whole life. This is because they’ve made many more CPP contributions. It’s difficult to determine the exact amount, though, because the age at which you start claiming your CPP payments also determines how much you’ll receive.
Years of Work Needed to Get a Pension in Canada
As we’ve already discussed, you only need to make one valid contribution in order to receive CPP. However, in order to receive the maximum amount of CPP, you would have needed to have worked for 39 years between the ages of 18 and 65. For these 39 years, you would have had to make CPP contributions the whole time and spend most of your time making the maximum pensionable earnings amount. This amount changes every year.
The 10-Year Rule for CPP
When it comes to CPP, the 10 year rule comes into effect for the CPP death benefit. In order to qualify for the death benefit the deceased would have had to have made contributions to CPP for one third of their time they were eligible to make CPP contributions (no less than 3 calendar years) or 10 calendar years.
If the deceased meets the requirements for the CPP death benefit, then a flat rate of $2,500 will be given to help cover the cost of funeral expenses. With this benefit, there’s also the possibility of receiving atop-upp of $2,500, which makes the maximum death benefit $5,000.
Getting CPP if You Never Worked
Before we dive too much into this question, it’s important to note that there are different types of CPP, and each has its own requirements. While you technically do have to have worked in order to start receiving CPP payments, there are different benefits, like the survivor's benefit and the death benefit, that have requirements based on the deceased’s history instead of yours. To receive benefits for yourself, though, you do have to have worked.
If you were self-employed but didn’t work for an employer, you can still arrange to contribute to CPP. This will allow you access to CPP benefits in retirement. What you do contribute to CPP will be determined by your contribution rate.
Who Can Get CPP
As we mentioned before, there are a few different types of CPP available. Here are the different types of CPP benefits and the requirements you need to meet in order to start receiving them.
Canada Pension Plan
Qualifying for the standard CPP is actually pretty simple. You only need to have made one contribution and be at least 60 years of age. Just being qualified though doesn’t determine how much you will get from CPP, just that you’re eligible to receive it. If you live in Quebec, instead of the Canada Pension Plan you will receive the Quebec Pension Plan.
CPP Disability Benefit
The CPP Disability Benefit is the monthly amount you could be eligible for if you can’t work due to a disability. In order to qualify, you need to:
- Be under the age of 65
- Contributed enough to CPP
- Have a mental or physical disability that regularly impacts your working
- Have a disability that’s considered to be long-term or have an indefinite duration
If you meet these qualifications, you’ll continue to receive the benefits until you’re no longer eligible.
CPP Post- Retirement Benefit
CPP Post-Retirement Benefits are benefits you could receive if you have already received the CPP retirement pension. The other eligibility requirements that you need to meet include:
- Being between the ages of 60 and 65
- Having contributed enough to CPP
- Having a mental or physical disability that regularly stops you from working
- Having a disability that’s long-term or for an indefinite period of time
- Having been receiving the CPP retirement pension for more than 15 months or becoming disabled after starting to receive CPP
CPP Children’s Benefit
For those receiving a CPP disability benefit, their dependent children could qualify to receive a monthly payment. However, in order to receive this monthly payment they have to be under 18 years of age, or between the ages of 18 and 25 and going to school part-time or full-time.
CPP Survivor’s Pension
A survivor's pension is for the legal surviving spouse of someone who contributed to CPP. In order to qualify, you either have to be legally married to the contributor or their common-law partner. How much you could receive is based on your age and how much the contributor paid into CPP. Due to this, the survivor's benefit amount is different for everyone.
Death Benefit
As we mentioned, this amount is given after the contributor is deceased and is given to their family in order to help pay for expenses related to their death. The minimum you can receive for the benefit is $2,500, and the maximum is $5,000.
What’s The Minimum Pension in Canada?
While you may not be able to collect the CPP pension in Canada if you’ve never worked, you can still collect OAS. In order to receive OAS, also known as Old Age Security, you have to be 65 years of age, be a Canadian citizen or legal resident and have lived in Canada for at least 10 years since the age of 18.
Plus, if you receive OAS and are considered to have a low income, you can supplement your income with the Guaranteed Income Supplement which is also referred to as GIS. You have to meet all of the OAS requirements as well as the income requirements.
- If you’re single or widowed, your income must be under $22,056
- If your spouse receives the full amount of OAS, then your income must be under $29,136
- If your spouse doesn’t receive the full amount of OAS, the max income is $52,848
- If your spouse receives the allowance, the max is $40,800
How Zero Earning Years Affect CPP
Due to the fact that it’s common to have low earning or no earning years, this is accounted for when your CPP amounts are calculated. Up to 8 years of low earnings or no earnings will be dropped from the calculation which will help to increase the amount of your pension. This means your best 40 years of earnings are used. That said, if you have more than 8 years of low or zero earnings, then this could negatively impact how much CPP you earn.
Years of Working Needed for Minimum and Maximum CPP
As we’ve mentioned, there’s no minimum amount of time you’ve had to have worked for CPP. You only have to have made one valid CPP contribution. Earning full benefits requires you to work at least 39 years between the ages of 18 and 65, with the majority of these years earning the CPP maximum pensionable amount. However, if you choose to work after the age of 65, these contributions will also be calculated into your payment. You can even receive CPP payments through direct deposit while you’re still working.
How Much CPP You’ll Receive Based on The Age of Retirement
While you are able to start collecting your CPP pension at age 60, you have until the age of 70 to start collecting it. How much you receive depends on which age you decide to start collecting.
If you choose to start your pension at age 65, which is the average retirement age, you can get up to $1,433 per month. If you choose to take your pension at 60, then your maximum monthly amount can be up to $917.12. If you wait until the age of 70, then your average monthly payments will be somewhere around $2,000 per month.
Final Thoughts
In Canada, CPP is just one of the public pensions available to Canadians. In order to receive CPP, you have to have worked; OAS doesn’t require this. You can receive OAS as long as you’ve lived in Canada for at least 10 years and can supplement your income using GIS. However, you can also receive CPP at the same time if you qualify.
CPP isn’t just available to those who are at retirement age, though. You can also receive different types of CPP, including death benefits, survivors' benefits, CPP disability benefits, and children's benefits. In order to qualify, though, you do have to meet the requirements and will only receive benefits for as long as you’re eligible.
