CPP Enhancements Explained: What Every Canadian Needs to Know

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Steadyhand

Күн бұрын

Пікірлер: 26

@stevebridge4375 24 күн бұрын

Great stuff guys, thank you!

@TheBreamer999 17 күн бұрын

I retired in May 2023. I decided to take early CPP, which is 870.48 a month. On November 29th I received another deposit for 53.98. I assume that is the enhancement part, and that will be an additional amount monthly going forward?

@FINEPOINTSOLUTIONS 17 күн бұрын

I suspect that this is an adjustment because Service Canada did not have all your contribution history information from the CRA, when they originally calculated your retirement pension amount. This kind of adjustment is not unusual. There are two entities that administer the CPP. The CRA collects contributions (via payroll), and Service Canada delivers benefits. The CRA and Service Canada have information sharing agreements. However, this means that there is a lag between when Service Canada has an individual's complete information for doing the benefit calculations. Some of the amount will be a retroactive portion (and would not continue), and some of the amount will represent your new going-forward amount. So, this has less to do with the enhancement part, and more to do with Service Canada having your complete contribution history for a proper benefit calculation.

@TheBreamer999 17 күн бұрын

@@FINEPOINTSOLUTIONS Thank you for the detailed reply

@Topaz2022 17 күн бұрын

This is all common knowledge. Was this an ad for Jason?

@SenadaPasic Ай бұрын

Is that four percent on about four thousand dollars - the difference between the two numbers? Why don't they let employees contribute over the seventy three thousand? Without the employer..

@johnnyv5995 Ай бұрын

Max. CPP is currently $1364(if taken at 65), so for those paying the extra 4%, what is the gain?

@saskaman8538 Ай бұрын

My guess it’s a redistributive tax

@Hyperpandas Ай бұрын

The gain obviously increases based on the number of years you contribute under the new rates.

@FINEPOINTSOLUTIONS Ай бұрын

Great question. Behind the scenes, that $1364 CPP maximum now has 3 parts: the original or Base CPP, and two parts of the new Enhanced CPP. The extra 4% is specifically on earnings between the original (lower) earnings threshold - called the YMPE, and the new (higher) earnings threshold - called the YAMPE. The new Enhanced CPP works by always taking your best 480 months (40 years) of contributions/earnings, on an on-going forward basis. Thus, the CPP maximum is actually increasing each month. It does so because each new monthly contribution into the Enhanced CPP (such as the extra 4% on earnings between the YMPE and YAMPE) is earning an individual a new month of pension credit for the 'best 480 months' in the calculation. This is described on a Government of Canada website here, along with historic data for each monthly CPP maximum since the Enhanced CPP started: open.canada.ca/data/en/dataset/e547539b-7fc6-4879-be54-3d1f80ac9e9e So the extra 4% is paying for a part of the monthly CPP maximums, which increase throughout the year.

@stynger_OO7 29 күн бұрын

Appears the gain will be felt long after thise that have contributed (the mass retirees) are long gone. Gov is trying to hide something, would it have anything to do with Carney accessing $10 billion of CPP to invest partly in his own US company?

@Hyperpandas 29 күн бұрын

@@stynger_OO7 No, man, what you get out of CPP is based on what you put in. Someone who is just retiring mostly just contributed using the older lower rates, whereas someone just entering the work force will have contributed using the new higher rates. In no way should current retirees be drawing funds from CPP as though they put in more than they did. That would defy the whole purpose of CPP, which is run as a pension rather than a government program.