Child Rearing Drop Out Provision (CRDO)

If your earnings either stopped or were lower because you were raising your children under the age of seven, you can ask the CPP to exclude that period of time from the calculation of your benefit.

Your benefit is determined primarily by how long and how much you have contributed to the Plan.

Overview

The Canada Pension Plan (CPP) provides contributors and their families with retirement, disability, survivor, death and children’s benefits:

• The retirement pension is a monthly payment available to CPP contributors as early as 60 years of age.



• The disability benefit is a monthly benefit available to qualified CPP contributors and their dependent children.



• Survivor benefits are paid to a deceased contributor’s estate, surviving spouse or common-law partner and dependent children.

CPP Retirement Pension

You qualify for a CPP retirement pension, if you have made at least one valid contribution (payment) to the CPP Plan and if:

• you are at least 65; or
• you are between 60 and 64, and meet the earning requirements set out in the legislation.

To qualify for a retirement pension between the ages of 60 and 64, you need to do one of the following:

• Stop working - 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. For example, if you want your pension to begin in July, you have to stop working by the end of June and you cannot work during the month of July.
  OR
• Earn less than a specified amount - This means you earn less than the current monthly maximum CPP retirement pension payment ($828.75 in 2005) in the month before your pension begins and in the month it begins. For example, if you want your pension to begin in July 2006, you need to earn less than $828.75 (using 2005 rate) in both June and July.

CPP payments are taxable income.

CPP benefit is indexed to inflation every January. If inflation (as measured by CPI) increases, so does your monthly benefit.

Once you start receiving your CPP pension, you can work as much as you want without affecting your pension amount. You can still contribute to the RRSP. However, you cannot contribute to the CPP on any future earnings from employment.

Your retirement pension normally starts the month after your 65th birthday. Your monthly payment is smaller if you begin receiving it before then, and larger if you take it after. This flexible pension can start as early as at the age of 60 or any time up to the age of 70.

The CPP adjusts the amount of your pension by 0.5 percent for each month before or after your 65th birthday from the time you begin to receive your pension. The adjustment is permanent. This means that if you choose to start your pension early, the payment does not increase when you reach 65.

For example, if you start your pension at 60, your monthly payment is 30 percent lower than if you wait until you're 65. However, by starting it sooner, you will likely receive it for a longer time. If you start your pension at 70, your monthly payment is 30 percent higher than if you had taken it at 65. There is no financial benefit in delaying receiving your pension after the age of 70.

For an estimate of your CPP retirement pension, check your CPP Statement of Contributions, or contact Social Development Canada.

CPP Disability Benefit

The Canada Pension Plan (CPP) disability benefit is available to people who have made enough contributions to the CPP, and whose disability prevents them from working at any job on a regular basis. The disability must be long lasting or likely to result in death. People who qualify for disability benefits from other programs may not qualify for the CPP disability benefit.

You must apply for a disability benefit in writing. There are also benefits available to the children of a person who receives a CPP disability benefit.

Survivor Benefits

Canada Pension Plan survivor benefits are paid to a deceased contributor's estate, surviving spouse or common-law partner and dependent children. There are three types of benefits.

(1) The death benefit is a one-time payment to, or on behalf of, the estate of a deceased Canada Pension Plan contributor;

(2) The survivor's pension is a monthly pension paid to the surviving spouse or common-law partner of a deceased contributor;

(3) The children's benefit is a monthly benefit for dependent children of a deceased contributor.