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CPP benefits increase by 0.4 percent: 2010 Yearly Maximum Pensionable Earnings (YMPE) set at $47,200
Ottawa (11 December 2010) – Human Resources and Skills Development Canada today announced the benefit rates for the Canada Pension Plan (CPP) and Old Age Security (OAS) effective January 1, 2010.
Canadians already receiving CPP benefits as of December 2009 will see their benefits increase by 0.4 percent on January 1, 2010. CPP benefits are revised once a year, in January. Increases are based on changes over a 12-month period (November 2008 to October 2009) in the Consumer Price Index, which is the cost-of-living measure used by Statistics Canada. The maximum CPP retirement benefit for new beneficiaries will increase on January 1, 2010, from $908.75 to $934.17 per month. This is calculated based on the Average Yearly Maximum Pensionable Earnings for the past five years.
The Yearly Maximum Pensionable Earnings (YMPE) for 2010 has been set at $47,200.
As of January 1, 2010, the basic OAS pension, paid to people 65 years of age and over, will remain unchanged at $516.96 per month. The Guaranteed Income Supplement and Allowances payments, which provide additional benefits to eligible low-income pensioners and their spouses or common-law partners, as well as to eligible survivors, will also remain the same.
These payments are also based on the Consumer Price Index but are revised quarterly, in January, April, July and October. Although OAS and CPP benefits are not indexed at the same time, they are both adjusted with the cost of living over a given year.
Both OAS and the CPP enhance the quality of life of Canadian seniors by providing a modest base upon which to build additional income for retirement.
The OAS program is funded through general tax revenues and provides a basic minimum income for Canadian seniors. It provided 4.5 million seniors with $33.4 billion in 2008-2009.
The CPP (or the Quebec Pension Plan in Quebec) is funded through contributions by Canadian workers, their employers and the self-employed, and through investment earnings on the Plan's funds. In addition to retirement benefits, the Plan provides disability benefits, death benefits, survivor benefits and benefits for children.
Canada's public pensions are fully sustainable for generations to come. Canadians can count on their public pensions to be there for them in the future.
The 2010 maximum RRSP deduction limit will be 18 percent of earned income to a maximum of $22,000.
Maximum Old Age Security benefit rates as of Jan. 1, 2010
| Type of Benefit | Maximum Monthly Rate Jan – Mar 2010 |
|
Basic Old Age Security pension |
$516.96 |
|
Guaranteed Income Supplement Single Spouse/Common-law partner of
|
$652.51
$652.51 $430.90 $430.90 |
|
The Allowance
|
$947.86 $1050.68 |
Maximum CPP benefit rates as of Jan. 1, 2010
| Type of CPP Benefit | Maximum Rates for 2010 |
| Retirement pension (at age 65) | $934.17 |
| Disability pension | $1,126.76 |
| Death benefit | $2,500.00 |
| Survivor's pension (under age 65) | $516.57 |
| Survivor's pension (age 65 & over) | $560.50 |
|
Combined pensions: Survivor/Retirement ( at age 65) Survivor/Disability |
$934.17 $1,126.76 |
| Disabled contributor's child benefits | $214.85 |
| Deceased contributor's child benefits | $214.85 |
| Yearly Maximum Pensionable Earnings (YMPE) | $47,200.00 |
| Year's Basic Exemption (YBE) | $3,500.00 |
| Employer / Employee CPP Contribution Rate | 4.95% each - up to a maximum of $2,163.16 annually |
| Self-Employed CPP Contribution Rate | 9.9% - up to a maximum of $4,326.40 annually |
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