Changes to CPP

By -
Starting January 2012, there will be changes made to the Canada Pension Plan or CPP. Here are the changes according to Service Canada's website.

These changes will affect you if you are:
  • an employee who contributes to the Canada Pension Plan (CPP), whether you are just starting your career or you are planning to retire soon;
  • a self-employed person who contributes to the CPP;
  • between the ages of 60 and 70 and you work while receiving your CPP retirement pension (or if you work outside of Quebec while receiving a Quebec Pension Plan (QPP) retirement pension); or
  • an employer who contributes to the CPP on behalf of your employees.
    You will not be affected by these changes if you started receiving a CPP retirement pension before December 31, 2010, and you remain out of the work force.
The CPP operates throughout Canada, except in Quebec, where the Quebec Pension Plan (QPP) provides benefits. These changes do not apply to the QPP. For information about the QPP, visit the QPP Web site.

What are the changes?

The following changes to the CPP will be phased in gradually between 2011 and 2016, with the first major change occurring in January 2011 for people retiring after age 65:
  • Your monthly CPP retirement pension amount will increase by a larger percentage if you take it after age 65 (gradually from 2011 to 2013).
  • Your monthly CPP retirement pension amount will decrease by a larger percentage if you take it before age 65 (gradually from 2012 to 2016).
    The number of years of low or zero earnings that are automatically dropped from the calculation of the CPP retirement pension will increase (in 2012 and 2014).
  • You will be able to begin receiving your CPP retirement pension without any work interruption (starting in 2012
  • If you are under 65 and you work while receiving your CPP retirement pension, you and your employer will have to make CPP contributions. (or if you work outside of Quebec while receiving a QPP retirement pension) (starting in 2012). These contributions will increase your CPP retirement benefits (starting in 2013).
    If you are age 65 to 70 and you work while receiving your CPP retirement pension, you can choose to make CPP contributions (or if you work outside of Quebec while receiving a QPP retirement pension)(starting in 2012). These contributions will increase your CPP benefits (starting in 2013).
These changes will improve retirement flexibility for working individuals in Canada, enhance pension coverage, and improve equity in the CPP.

On April 1, 2010, administrative penalties under the Canada Pension Plan and the Old Age Security Act came into force.

The penalty provision imposes monetary penalties on individuals (an applicant, a beneficiary, or a third party) who receives or tries to receive benefits by knowingly providing false or misleading information or omitting information.

The interest provision came into force on April 1, 2011. This provision gives the Minister of Human Resources and Skills Development Canada the authority to charge interest on monetary penalties and on overpayments that are subject to a penalty.

Service Canada’s disclosure policy allows individuals to come forward and correct inaccurate or incomplete information.

About the interest provision:
  • The rate of interest is the Bank of Canada average rate plus three percentage points. Interest is calculated daily and compounded monthly.
  • Interest starts accumulating 120 calendar days after the Department has sent a demand for payment in writing.
  • This 120-day period allows individuals the time to appeal the decision that originally led to a penalty and/or to negotiate a repayment schedule.
  • The Department will not charge interest on either the penalty or the associated overpayment amount as long as there is a monthly payment made according to a repayment schedule.
  • You have the right to appeal the penalty amount and/or the circumstances that gave rise to the penalty by requesting a reconsideration of the decision. To do this, you must make a request in writing within 90 days of having been notified of the penalty.
Here are links more information about the changes to CPP:
Here's a link to a video explaining the changes to CPP.

Comments

Post a Comment

Popular posts from this blog

Trump Tweets

By Unknown -
Image
President Donald Trump has been shaking up the whole establishment, issuing travel bans, repealing the Affordable Care Act (ObamaCare), tweeting about industries like defense and auto manufacturers. When a President of a country calls out companies or industries, the stock market reacts to it. When Trump tweeted about the F-35 jet being overpriced, six of the 28 stocks in aerospace and defense industry dropped 2% or more. When he tweeted about car manufacturers building plants in Mexico saying they should build the plants in the US or pay big border tax, Toyota’s stock loses $1.2B in value 5 minutes after the tweet came out. When Trump issued the immigration travel ban on a weekend. Airline stocks in the US that has international destinations lost $4.9 billion in market value . When Trump signed an executive order to review or end the financial regulations set up during the Obama administration which was enacted after the 2008 financial crisis that was meant to protect cons
Read more

Just The Minimum Please

By Unknown -
I see a lot of clients looking to get home insurance and when I ask them how much they want to insure for, they always say, "we only want the minimum, we don't have a lot of stuff". It's interesting when people say that because all they're focused on is how much it would cost them to buy the insurance. They never really think about how much it would really cost to replace what they own. Home insurance policies are normally set up to insure you for "replacement cost". This means that they'll get you back to where you were before the loss, never more, never less. So if your neighbor upstairs had a water leak and your 55" 4K Ultra HD TV that you bought for $2,500 3 years ago short circuits because of that, the insurance company will replace the TV with the same brand, size and model without depreciation. They're not going to say that it's 3 years old now, here's $500 to replace it. People don't realize this so they underest
Read more

TFSA, RRIF and other changes from the 2015 Federal Budget

By -
Here are the personal tax changes from the Federal Budget yesterday. TFSA The TFSA was introduced in 2009 as a way to save and invest for your future on a tax exempt basis. Contributions to a TFSA is not tax deductible but gains, income and withdrawals are tax free. Originally, the TFSA started with a $5,000 limit subject to inflation adjustments of $500 increments. Because of this, the TFSA limit from 2009 to 2012 was at $5,000, but changed to $5,500 from 2013 to 2014. The new 2015 budget proposes to increase the TFSA annual contribution limit to $10,000 effective immediately and going forward. However, the annual contribution limit will no longer be indexed to inflation but will be increased only if legislated. So if you have never contributed into a TFSA, you can now contribute up to $41,000 as long as you have been 18 years old since 2009. You can invest your TFSA into a variety of investments like stocks, bonds, GICs, mutual funds and segregated funds. RRIF A RRIF i
Read more