CPP Payment Dates 2022: How Much CPP Benefits Will You Get?

The Canada Pension Plan (CPP) is a monthly taxable social benefit paid to retired seniors in Canada.

For the average Canadian, CPP is probably the biggest source of retirement income and financial security, the others being the Old Age Security (OAS) and the Guaranteed Income Supplement (GIS).

If you have ever seen a CPP deduction on your payslip or T4, then it means you have been contributing to this plan, and you are most likely eligible to receive monthly payments after you retire from active work.

Every working Canadian is entitled to the CPP payment, except Quebec residents who have their own Quebec Pension Plan (QPP) in place.

CPP payment dates vary from year to year, and even month to month. Therefore it might seem a little overwhelming to keep up with these constantly changing dates.

If you do not want to skip on your bills or get charged with NSF fees, I will advise you to generally expect the benefit to be paid on the last business day of the month, and then just plan your finances around that time.

I might as well kill two birds with a stone by stating here that the CPP payments date also happens to be the same day the OAS benefits are paid.

So if you are uncertain about CPP payment dates for 2022, your uncertainty ends here, and I will answer all your questions on the CPP payment dates, how to qualify for CPP, and how to apply for the CPP benefit.

CPP Payment Dates 2022: When Is CPP Paid?

The CPP payment dates for 2022 and 2021 are:

How Much CPP Payments Will I Receive?

To qualify for the CPP payments or anticipate the CPP payment dates, you must be at least 60 years old, and you must have contributed to the CPP at least once.

The easiest way to check your contribution status is to look at your payslip, T4, or notice of assessment for any information on CPP deduction.

Meanwhile, if you have at any time been an employee at a Canadian business, it is reasonable to assume you have made contributions at least one time.

I am making this huge assumption because it is a fact that Canadian employers have the duty and responsibility to make deductions and remit them to the government.

How much money you will receive in CPP payment is primarily determined by 4 main factors:

1. The age you start receiving your retirement pension

2. The amount you have contributed to CPP: Although how much you contribute to the CPP determines how much you get as CPP payments, however, the amount you can contribute varies annually based on your type of work.

If you’re an employee, the maximum amount you can contribute in 2022 is $3,499.80, while your employer is expected to match it up. But if you’re self-employed, the maximum contribution you can make to your CPP in 2022 is $6,999.60.

3. How long you have contributed to the CPP

4. Your average work-life earnings

The average CPP Payments and the maximum CPP payments vary from year to year, and the table below shows the average and maximum monthly CPP payments for 2022:

Source: Canada.ca

As seen from the table, we see that for the year 2022, if you are a new CPP payment recipient that starts receiving your pension at age 65, you can potentially get the maximum monthly CPP payment of $1,253.59.

Of course, I by no means claim you get this maximum figure since only a few people will get the maximum.

In fact, from the table, we see that beneficiaries who start taking their pension at age 65 got an average monthly CPP payment of $779.32

Other factors are also known to have a direct impact on how much CCP payment you’ll eventually be approved for even though it can be argued that these other factors are still linked to the primary factors.

These other factors include:

1. Whether or not you are working while receiving the CPP Retirement Pension

2. Whether or not you are making contributions after age 65

3. Whether or not there are periods of low or no salary

4. Whether or not you have taken time off to raise your children

5. Whether or not you have stayed off work because of a disability

6. Whether or not you are sharing your pension with anyone

7. Whether or not you have gone through a divorce or separation

How to Qualify for Maximum CPP Payments

To qualify for maximum CPP payment, you must have a record of making maximum CPP contributions for several years. To make maximum CPP contributions, you must:

• contribute more than the Year’s Maximum Pensionable Earnings (YMPE).
• have no periods of unemployment.
• delay your CPP payments until you are 70 years

What Is YMPE?

YMPE is basically the maximum salary amount that you can contribute to the Canada Pension Plan (CPP). It is set out annually by the federal government, and it determines the CPP and pension contributions.

In recent times, the YMPE rate has constantly risen year after year. The table below summarizes the YMPE history for the past 7 years:

CPP Payment Increase 2022 (CPP Enhancements)

CPP contribution rates and CPP benefits are not fixed.  Instead, they gradually increase annually until 2023. These increments help individuals and families save more for retirement, and earn more CPP benefits in retirement. This is known as CPP enhancement. 

For the changes in the year 2021 to 2022, the employer and employee contribution rate increased from 5.45% to 5.70%. For the self-employed, the CPP contribution rate increased from 10.90% to 11.40%.

Other CPP Benefits

CPP provides additional benefits besides the monthly retirement pension, and they have expanded to provide the following additional benefits:

1. Post-Retirement Pension

The CPP post-retirement pension is a benefit to those who keep making CPP contributions under the age of 70 while working.

Every CPP contribution you make annually adds to your CPP post-retirement benefits.

2. CPP Disability Pension (CPP Disability Payments)

When you turn 65, the CRA will automatically change your CPP disability pension payments to CPP retirement pension.

This benefit is tailored to those suffering a severe and prolonged disability and has made enough contribution.

3. Children’s Benefit

This benefit is for dependent children of those receiving a CPP disability benefit and deceased CPP contributors.

However, the children must be under 18 to 25 years and enroll in full-time school.

4. CPP Survivor’s Pension

CPP survivor’s pension is a combined benefit for those already receiving CPP survivor’s pension before receiving CPP retirement pension and vice versa.

However, the combination may not amount to the same benefits as the two pensions.

5. Death Benefit

The CPP death benefit is a one-time payment provided to the estate or beneficiary of CPP contributors.

Note: The above additional CPP benefits are not automatic. You need to apply in most cases.

What Is The Difference Between CPP and OAS

The Old Age Security (OAS) is also a source of retirement income for Canadians. Although the CPP and OAS are similar in the sense that they are a major source of retirement income for Canadians, they are still in fact very different.

For a start, a major difference is that taxes are OAS is funded by the Government of Canada, while CPP is funded by deductions and contributions from employment income.

This is why the Canada Pension Plan is dependent on how much money you contributed to the CPP fund in the years you spent working as opposed to OAS which is determined strictly by the amount of time you have spent being a resident of Canada.

Further, the age requirement is also different for CPP and OAS. For CPP, the minimum age before you can start receiving payments is 60 years while it is 65 years for OAS.

When Is The Best Time To Start Collecting CPP Payments?

You can begin collecting CPP at the age of 60. However, starting early would result in a permanent loss of up to 36% of your pension.

If you start collecting CPP payments before the age of 65, it will attract a monthly deduction of 0.6%. That is a total annual deduction of 7.2%.

In contrast, if you wait until the age of 70 to begin collecting CPP, your payments will be permanently boosted by 0.7% monthly because for every year after you turn 65, you have an annual  8.4% increase.

When to start collecting the CPP payments depends on your situation and needs, but if your goal is to maximize your CCP payments, then wait till 70. But in any case, try to wait till you are at least 65.

What Happens to CPP After the Death of a Contributor?

When a CPP contributor dies, his/her dependent children (under 18 to 25 years) who are enrolled in full-time school will receive CPP children benefits.

Additionally, the spouse of the deceased CPP contributor will receive the CPP survivor’s pension.

The amount the deceased CPP spouse gets depends on his/her age and the amount the deceased CPP contributor has contributed.

For example, if the surviving spouse is under 65 years, he/she will get a flat-rate amount plus 37% of the deceased CPP contributor’s retirement pension.

But if the spouse is 64 years or above, the spouse will get 60% of the retirement pension.

CPP Eligibility & Application: Do I qualify? How Do I Apply for CPP Payment?

To qualify for the CPP, you must be at least 60 years old and have contributed at least once to the CPP.

To receive the CPP payment, you must apply in advance. It is not automatic.

So if you’re sure that you’re qualified for the CPP Payment, the first type is to decide when you want your pension to start.

You can choose to start immediately when you apply, at 65 or any specified age.

After identifying when you want to start receiving your CPP Payment, you can then:

• Log in to your My Service Canada Account (MSCA) or register.
• Use the personal access code to complete your registration.

You will receive a mail notification within 7 to 14 days of your application.

You can also apply for the CPP payment through paper. All you need is to download the application form and fill it out.

After that, mail it to the CRA or submit it to the Service Canada office.

When you’re applying on paper, it may take up to 120 days to get a notification of approval.

However, it could take longer if there’s missing information in your application.

Final Thoughts on CPP Payment Dates 2022

CPP payment dates 2022 are already rolling out. But not everyone is qualified to receive them.

So the question is, are you really qualified for the CPP payment dates for 2022?

Although, you’re qualified for the CPP payment once you reach the age of 60. But it’s not wise to start at that age.

Starting the CPP payment at the age of 65 or above will earn you a higher rate, i.e. more income.

And if you’re consistent with your CPP contribution, additional benefits await you.

In conclusion, the CPP payment dates are not fixed. Instead, they are subject to change.

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FAQs on CPP Payment Dates 2022

Can I Collect CPP and Other Sources of Retirement Funds?

Yes, CPP is just one out of many retirement supplements you can get as a Canadian.

As you meet the qualifications, there is no limit to how many retirement benefits you can receive.

Moreover, it’s always a good idea to supplement your CPP with other sources of retirement funds such as TFSA and RRSP. This will help you save more for your retirement.

Can I Rely on the CPP For All My Retirement Expenses?

The CPP payment may not be enough to cover your retirement expenses. Consequently, you can’t rely on it as the only source of your retirement funds.

Thus, it is important to supplement your CPP using retirement accounts such as TFSA and RRSP.

Can You Refuse to Pay CPP?

Before 65- No. But you can refuse to pay CPP when you reach age 65.

But your contributions will end once you reach 70 years… even if you’re still working.

However, you can revoke the election.

Does CPP Pay for Funeral Expenses?

Yes. The estate or beneficiary of a deceased CPP contributor may be eligible for a $2,500 death benefit.

But the CPP contributor must make enough contributions before they pass away.

Can I Receive the CPP Payment of My Deceased Husband?

Yes, you can receive the CPP payment of your deceased husband by applying for the CPP survivor’s pension.

How much you get will be determined by your age, the amount contributed, and your pension benefits.

Is CPP Taxable?

Yes, CPP is taxable because it’s regarded as income.

However, as your income reduces during your retirement, so will your tax rate reduces. 

Is CPP Alone Enough for Retirement?

CPP is just a supplement to your primary income. Because it doesn’t replace your primary income, it may not be enough to cover your retirement expenses.

Thus, you should consider diversifying your income and investing in retirement accounts such as tax-free savings accounts (TFSA) and registered retirement savings plans (RRSP). 

When Should I Apply for the CPP Payments?

You can apply for the CPP as early as age 60. But the standard age is 65. Applying at the age of 70 is considered late.

What is the 2021 CPP Maximum?

The maximum monthly CPP for 2021 is $1,203.75. To be eligible for the payment, you must have a record of maxing out the contributions for many years.

What is the Best Age to Collect CPP?

Sixty-five years and above is often considered the best age to collect the CPP.

The idea is that the more you wait, the more CPP you receive.

However, to make the best decision, consult a financial advisor who will guide you on the time that’s best for you to start.

What Happens to CPP When You Move Abroad?

Because of a social security agreement, you may still receive your CPP benefits when you move abroad.

However, different countries have different social security agreements. You may need to confirm the agreement that is applicable to you.

A government representative can assist you in confirming the social security agreement that applies to you.

If you’ve more questions on CPP payment dates… don’t hesitate to let me know in the comment section.