The Canada Revenue Agency (CRA) is set to release the next Canada Pension Plan (CPP) payments on November 27th, 2024.
CPP is a key financial support program in Canada, providing income to retirees, survivors, and individuals with disabilities.
According to Immigration News Canada (INC), International citizens, including immigrants, should understand how CPP works and how it may affect their financial planning in Canada.
How CPP affects international citizens
INC reports that international citizens and immigrants who work in Canada contribute to CPP through payroll deductions, regardless of their country of origin. This system allows contributors to access financial support in their retirement, or if they become disabled.
If you live and work in Canada, you are eligible to receive CPP benefits once you meet the required age and contribution history.
In 2024, the maximum monthly benefit available through CPP is $1,364.60 for individuals who have made the highest contributions throughout their working years. However, on average, CPP recipients in Canada receive about $816.52 per month.
How CPP payments are determined
According to reports, monthly CPP payments depend on several factors, including how much you have contributed during your working years and the age at which you begin receiving benefits. If you begin receiving benefits at age 60, payments will be reduced by 0.6% per month until age 65. If you delay until age 70, your payments will increase by 0.7% per month, resulting in a 42% increase compared to starting at age 65.
This means that the amount you receive from the CPP depends on two main factors:
1. How much you’ve contributed during your working years.
2. When you start receiving the benefits.
- If you start receiving CPP benefits at age 60, the amount you receive each month will be reduced by 0.6% for every month you start early, up until age 65. For example, if you were meant to receive $1,000 at 65, starting at 60 would mean you only get 94% of that amount, or $940.
- However, if you decide to delay receiving benefits until age 70, your monthly payments will increase by 0.7% for each month you wait after age 65.
- This means that by age 70, your monthly payments would be 42% higher than if you started at 65. For example, if your payment at 65 was $1,000, by waiting until 70, you could receive $1,420 per month.
In short, starting early results in lower payments, while waiting longer increases the monthly benefit.
Eligibility requirements for international citizens
As long as you have worked and contributed to CPP while living in Canada, you are eligible to receive benefits once you reach age 60. Even if you are a newcomer to Canada, contributing to CPP ensures that you will be eligible for retirement benefits.
Additionally, if you move abroad after contributing, you may still qualify for CPP payments, though the amount will depend on your contribution history.
How to apply for CPP
To apply for CPP, reports inform that you can use the My Service Canada Account or submit a paper application.
INC notes that it is important to apply ahead of time, as processing typically takes about 120 days. International citizens should plan to apply early to ensure they can start receiving their benefits on time.
For those planning their retirement or who may need financial support in case of disability, understanding CPP is key to securing their financial future.
Stay updated on payment dates
The next CPP payment will be issued on November 27th, 2024. Additional payments will follow on December 20th, 2024.
Reports inform that it is important for international citizens and immigrants to be aware of these dates to manage their financial planning.
For more information on CPP or to apply, visit the official Canadian Government website or log in to your My Service Canada Account.
