The Canada Pension Plan

Persons with Canadian residency who are employed and 18 years and older automatically pay a portion of their earnings into the government’s social insurance program, the Canada Pension Plan (CPP), which helps provide retirement and disability income and other benefits to those who meet minimum qualifications.

The CPP Disability Canada was established in 1966 under Prime Minister Lester B. Pearson and mandated that all residents pay 1.8 percent of their gross annual income into the program. With demographic and economic changes, the government realized that over time the CPP would never be able to support a growing population based on the original contribution rate. Thus, the contribution amount gradually rose to 4.95 percent for those employed by a company and 9.9 percent for the self-employed by 2003.

If you are a Canadian who has paid into the system, the CPP pays retirement pensions, disability benefits, survivor benefits, and children’s benefits for students aged 18 to 25.

Common Questions about The Canada Pension Plan

• Who pays into the CPP disability Canada?

Most Canadian residents 18 and older through payroll deductions whether self-employed or employed by a company. At age 70, you no longer make contributions, even if you continue working.

• How much do residents pay into the system?

The amount paid depends on your income, based on a minimum wage of $3,500. If you’ve earned less than $3,500, you don’t pay into the CPP Disability. Otherwise, the amount paid is based on pensionable earnings between $3,500 and $42,100. Here are two examples. John is employed as an accountant for a large firm and made $58,000 last year, which is higher than the maximum taxable pension of $42,100; his maximum contribution for that year was $1910.70 (42,100 – 3,500 multiplied by .0495). Jenny is self-employed and made $39,000 last year, and her contribution was $3614.50 (42,100 – 3,500 multiplied by .099 percent). Jenny pays a higher amount because she is self-employed and doesn’t have an employer making contributions on her behalf, as is the case with John.

• Where can I find out how much I’ve contributed?

CPP Disability sends out a Statement of Contributions each year, which lists your pensionable income since you started paying into the system.

• I lived and worked outside of Canada for a few years, is that a problem?

Not necessarily, as Canada has agreements with several countries where you can receive benefits from either. But more information is available by calling CPP Disability Canada at 800-622-6232.

• I don’t agree with something in my Statement of Contributions or how my benefits are credited. What can I do?

If you are in disagreement with a CPP decision, you may submit a written request for reconsideration. In the event you disagree with the reconsideration, you may submit a first-level appeal, followed by a final second-level appeal.

The Canada Pension Plan provides key disability, retirement, and other benefits to qualifying adults, but it’s important for you to know your annual earnings, how you or your dependents qualify, and other key information. Disability Credit Canada’s mission is to help disabled Canadians qualify for Disability Tax Credit & CPP Disability Benefits and then maximize their tax refunds & credits. In this endeavor, we have worked with thousands of Disabled Canadians and we recognize the difficulties they face in their everyday life.