There are a variety of age-related benefits offered by the Government of Canada for seniors; understanding these is incredibly complex, so this will be a high-level survey of what is offered and how to obtain it. In our next blog post, we’ll talk about eligibility for Old Age Security and Guaranteed Income Supplement, but for today we’ll discuss the Canada Pension Plan (CPP) and it’s related Disability Benefits. Understanding these can help you when you’re 60 years of age or older, and if you ever face a serious disability that renders you unable to work.
The CPP and it’s associated benefits are contribution based. This means that you must have contributed to the plan in order to see benefits. Unsure if you’ve contributed to the plan? In all likeliness, you have, so long as you’ve worked in Canada and earned more than 3,500$ per year. When you work, you contribute 5.1% of your income to the CPP, and your employer contributes another 5.1%, for a total of 10.2%. For a long time, your contributions were 4.95%, but there was an increase in January 2019, in order to shore up the total funds available in the CPP. The more you’ve contributed over time, the more money you’ll get when you retire; the maximum that can be contributed per year is $5,497.50 per year, adding your contributions with your employers.
You can begin receiving CPP benefits as of age 60, but taking your pension before 65 results in a reduction of benefits. In the same vein, waiting before receiving your pension results in an increase, though there’s no advantage to waiting past the age of 70. When you work after the age of 65, your contributions to the CPP change; instead of going to your total contribution, the money you contribute goes towards an associated post-retirement benefit. There are ways to increase the amount you might receive from your pension, most notably if you were the primary caregiver for a child, and that acting as caregiver resulted in a reduction in your contributions. The math is complicated, so I encourage you to contact Service Canada.
The Disability Benefit is tied in with the Canada Pension Plan, which is to say it’s contribution based. You can apply for the Disability Benefit if you have a disability that is severe and prolonged, where “severe” means it renders you unable to perform gainful work, and “prolonged” means it is long-term or indefinite. There is a base monthly amount you’ll receive, plus another amount based on your CPP contributions. Your children may also receive a benefit if you are eligible for the Disability Benefit.
Disability that renders you incapable of finding gainful employment can make it difficult to do chores or even move around your house. There are highly specialized home care professionals who can help you no matter what your illness is. Don’t go it alone; help is available, and that help can make all the difference.