The Canada Pension Plan (CPP) Post-Retirement Benefit (PRB) is a lesser-known but valuable component of Canada’s retirement system.
Designed to support those who continue working after beginning to receive their CPP retirement pension, the PRB provides an additional source of income during retirement.
This article explains what the CPP PRB is, how it works, eligibility requirements, and how much you can expect to receive.
What is the CPP Post-Retirement Benefit?
The CPP Post-Retirement Benefit (PRB) is a supplementary pension benefit available to individuals who continue working and contributing to the CPP after they start receiving their CPP retirement pension.
Contributions are mandatory for workers aged 60 to 65, while those aged 65 to 70 can choose to contribute by completing the CPT30 form.
The goal of the PRB is to enhance the retirement income of individuals who choose—or need—to work beyond the traditional retirement age.
How the PRB Works
The CPP PRB is automatically calculated based on the additional CPP contributions made after starting to receive your CPP retirement pension.
Contributions continue until you reach 70 years of age, after which you are no longer required to contribute to the CPP. Each year, the contributions made result in an additional PRB payment starting the following year.
For those who choose to stop contributing after age 65, submitting the CPT30 form to both the Canada Revenue Agency (CRA) and their employer is necessary. Employers must also stop making contributions once the form is processed.
Eligibility for CPP Post-Retirement Benefit
To qualify for the CPP PRB, you must meet the following criteria:
- Age: You must be between 60 and 70 years old.
- Employment Status: You must be either working for an employer or self-employed.
- CPP Contributions: You must continue making CPP contributions if you are working.
- Receiving CPP: You must already be receiving your CPP retirement pension.
It’s important to note that the PRB is independent of other pension benefits, such as the Quebec Pension Plan (QPP). If you are receiving a pension from the QPP, your eligibility for the CPP PRB may differ.
How Much is the CPP Post-Retirement Benefit?
The amount you receive from the CPP PRB is based on your CPP contributions during the years you continued working after starting your retirement pension.
For 2024, the maximum annual PRB amount for individuals is approximately $40.25 per month for each year of contributions, which equates to $483 annually.
If you are over 75 years old, the combined total of your CPP retirement pension, PRB, and Old Age Security (OAS) can reach up to $9,120.84 per year.
When including the OAS and any Guaranteed Income Supplement (GIS) you may qualify for, your monthly income could be as much as $1,516.39.
The PRB is calculated annually, and your payments will start in January of the year following your additional contributions. It’s also worth noting that the PRB is indexed to inflation, meaning it increases in line with the cost of living.
Maximizing Your Retirement Income
To maximize your retirement income, consider opening a Tax-Free Savings Account (TFSA). The TFSA limit for 2024 has increased to $7,000, offering a tax-free way to save additional funds.
Contributions to a TFSA can be made via mutual funds, Guaranteed Investment Certificates (GICs), or other investment vehicles, allowing you to grow your savings without worrying about taxes on the interest, dividends, or capital gains.
CPP Retirement Payment Dates
The Canadian government schedules CPP payments annually, ensuring pensioners receive their benefits on time.
For 2024, payments started on January 27th and continued monthly, with the final payment scheduled for December 20th, 2024.
Here’s a quick overview of the remaining payment date:
| Month | Payment Date |
|---|---|
| December | 20th |
If you do not receive your payment on the scheduled date, it is advisable to contact the authorities immediately.
The CPP Post-Retirement Benefit is a valuable addition to your retirement income, especially if you continue working past the age of 60. Understanding how the PRB works, the eligibility requirements, and how much you can expect to receive can help you make informed decisions about your retirement planning.
By maximizing your contributions and considering supplementary savings options like a TFSA, you can ensure a more comfortable and secure retirement.
FAQs
What is the CPP Post-Retirement Benefit (PRB)?
The PRB is an additional benefit for those who continue working and contributing to CPP after starting their CPP retirement pension.
Do I need to apply for the CPP PRB?
No, the CPP PRB is automatically calculated based on your contributions after you start receiving your CPP pension.
How much can I receive from the CPP PRB?
In 2024, the maximum PRB amount is approximately $40.25 per month for each year of contributions.
When do PRB payments start?
PRB payments start in January of the year following your contributions.
Can I stop contributing to CPP after age 65?
Yes, but you must submit the CPT30 form to the CRA and your employer to stop contributions.
