The Canada Pension Plan (CPP) was established as a means of providing some compensation to plan contributors and their beneficiaries. Payouts may be requested in the event that the contributor retires, becomes disabled, or passes away. Except for those living in Quebec, virtually every citizen of Canada does contribute to the Canada Pension Plan. In cases where the individual has lived in another country and qualifies for pension plans in that country, they can still be eligible to participate in the CPP if they have contributed to the program.
The Quebec Pension Plan, or QPP, covers residents of that district, ensuring all citizens of the country are covered by some kind of pension. In some cases, individuals may have contributed to both the QPP and the CPP. If you have contributed to the Quebec Pension Plan in the past and have moved to another part of Canada, you would only apply for your pension through the Canada Pension Plan. Claims are processed according to your current place of residence and not by your past residences. Similarly, if you have lived elsewhere and currently live in Quebec, you would apply to the QPP for coverage. In either situation, your total amount of benefits will be calculated by taking the sum of all contributions you have made to both plans.
Upon your retirement, you will be eligible to begin receiving full benefits at 65 years of age. However, you may take an early retirement at age 60, provided you understand this will result in a permanent reduction of your benefits. Alternatively, retiring later at 70 will grant you a permanent increase of benefits. Additionally, you can continue to work up until age 70 and contribute to the plan. This will allow you to increase your post-retirement benefits.
Those who have suffered a permanent disability can receive monthly support benefits. In order to qualify, you must be able to show that the disability prevents you from working at any job full-time.
Death benefits work in two ways. When you die, your spouse or common law partner may be eligible to receive your pension. Additionally, a one-time death benefit payment may be paid out to your estate. If you have minor children, they may also receive monthly benefit payments in the event of your death or a serious disability.
The CPP and QPP are in place to ensure everyone in Canada is cared for in the event of retirement, disability, or injury. This is a protection for those who may otherwise be left in need at a vulnerable time. However, your participation of the program determines how much you will benefit from it later in life.