Uncertain about CPP payment dates for 2021? Your uncertainty ends here.
It’s easy to get confused about the CPP payment dates due to constant annual changes by the Canada Revenue Agency (CRA). This is why the CPP payment dates for 2021 are different compared to those of 2020 and the previous years.
In this comprehensive guide on Canada pension payments and dates, I will be helping you answer all your questions on the CPP payment dates, how to qualify for CPP payment, how to apply for the CPP payment, and how best to spend your Canada Pension Payment.
CPP Payment Dates for 2021
The CPP payment dates vary annually. Ordinarily, you will receive monthly payments on the third last business day of the month, from January to November but will receive your pension payment on the second last business day before Christmas in December.
Highlighted below is the CPP payment schedule for 2021:
- January 27, 2021
- February 24, 2021
- March 29, 2021
- April 28, 2021
- May 27, 2021
- June 28, 2021
- July 28, 2021
- August 27, 2021
- September 28, 2021
- October 27, 2021
- November 26, 2021
- December 22, 2021
For the year 2022, CPP payments will be made by the Canada Review Agency on:
- January 27, 2022
- February 24, 2022
- March 29, 2022
- April 27, 2022
- May 27, 2022
- June 28, 2022
- July 27, 2022
- August 29, 2022
- September 27, 2022
- October 27, 2022
- November 28, 2022
- December 21, 2022
What is CPP Payment?
Canada Pension Plan (CPP) is a monthly payment made by the Canada Revenue Agency (CRA) to Canadian retirees.
This is also a supplement to your monthly income as you can receive it even while working.
CPP payment is considered taxable income, and it’s taxed according to your total taxable income level.
However, couples can save on taxes by applying to share their CPP benefits.
Once you qualify for the CPP payment, you will receive monthly benefits for the rest of your life.
Since its inception in 1995, the CPP has helped many Canadians in improving their retirement plans.
Like the Old Age Security (OAS), and Guaranteed Income Supplement (GIS), Canada Pension Plan is a vehicle for financial security in retirement.
So CPP payment dates are days through which different CPP benefits are disbursed to various contributors.
As you continue reading, you will learn more about what CPP payment dates entail and how to prepare for them.
How to Qualify for CPP Payments 2021?
Every working Canadian is entitled to the CPP payment… except Quebec residents who have the Quebec Pension Plan (QPP) in place.
So to qualify for the CPP payments or anticipate the CPP payment dates, you must at least:
- Be 60 years old
- Contributed once to the CPP
Once you meet the above qualifications, you can go ahead and apply for the CPP payments.
As you continue reading, you will learn about the steps of applying for the CPP payments.
Average & Maximum Monthly CPP Payment Dates for 2021
The average and max CPP pay vary annually. The table below shows the average and maximum CPP monthly payments for 2021:
|Average Amount for Beginners|
|Maximum Monthly Payment Amount|
|Type of Pension|
|$1,119.94||$1,413.66||Disability pension and disability benefit|
|$925.49||$1,203.75||Retirement pension (age 65)|
|$257.58||$257.58||Deceased CPP contributor’s children|
|$257.58||$257.58||Disabled CPP contributor’s children|
|$316.91||$722.25||Survivor’s pension (age 65 and above)|
|$452.28||$650.72||Survivor’s pension (less than 65 age)|
|$510.85||$510.85||Post-retirement disability benefit|
|$8.04||$30.09||Post-retirement benefit (age 65)|
|$736.58||$1,203.75||Retirement pension (age 65)|
How to Qualify for Maximum CPP Payments in 2021?
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). Additionally, you must have no periods of unemployment.
The YMPE is set out annually by the federal government, which determines the CPP and pension contributions. The YEMPE for 2021 is $61,600.
Also, delaying your CPP payment for more than 65 years will earn you maximum CPP payment.
How Much Do You Contribute to the Canada Pension Plan?
How much you contribute to the CPP determines how much you get on CPP payment dates.
However, the amount you can contribute to the CPP varies annually based on your type of work.
If you’re an employer or employee, the maximum amount you can contribute in 2021 is $3,166.45. That’s 5.45% against 5.25% in 2020.
But if you’re self-employed, the maximum contribution you can make to your CPP is $6,332.90. That’s 10.9% against 10.5% in 2020.
How Much CPP Payments Will I Get?
How much money you will get in the CPP payment is determined by four factors. These are:
- The age started your CPP
- The amount you contributed
- How long you have contributed to the CPP
- Your average work-life earnings
However, if you’re a beginner, the maximum monthly payment you can receive when you start at 65 is $1,203.75 in 2021.
What is the 2021 CPP Contribution Rate?
CPP contribution rates are not fixed. Instead, they increase annually until 2023.
Then, the contribution rate will stay at 5.95% for employers and employees and 11.90% for the self-employed.
So for 2021, the employer and employee contribution rate increases from 5.25% in 2020 to 5.45%.
For the self-employed, the CPP contribution rate increases from 10.5% in 2020 to 10.9%.
|Year||Employer and Employee Contribution Rate||Self-Employed Contribution Rate|
|2023 and beyond||5.95%||11.90%|
CPP Benefits Increase (Enhancement) 2021
CPP Benefits are increased to help individuals and families save more for retirement. This is known as CPP enhancement.
The following table shows the CPP enhancement for 2021:
|Employee||From 5.25% to 5.45%|
|Employer||From 5.25% to 5.45%|
|Self-Employed||From 10.5% to 10.9%|
When to Start Collecting the 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.
But starting CPP before the age of 65 attracts 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.
Annually, you have an 8.4% increase. This increase starts when you turn 65.
So when to start collecting the CPP payments depends on your situation and needs.
CPP Additional Benefits
As mentioned earlier, the CPP provides additional benefits besides the monthly retirement pension. These additional benefits include:
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 vice versa.
However, the combination may not amount to the same benefits of 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 Happens to CPP After the Death of a Contributor?
As I mentioned above, if a CPP contributor dies, his/her dependent children (under 18 to 25 years) who enroll in full-time school will receive CPP children benefits.
Additionally, the dead CPP contributor spouse may 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 retirement pension.
But if the spouse is 64 years or above, he/she will get 60% of the retirement pension.
Guaranteed Income Supplement for Low-Income Canadians
If you’re already Receiving Old Age Security (OAS), you can also receive the Guaranteed Income Supplement (GIS).
This is a tax-free monthly Benefit given to low-income retirees in Canada.
However, if you’re not receiving the OAS, it’s important to apply.
CPP & OAS Eligibility
As mentioned earlier, to qualify for the CPP, you must be at least 60 years old and have contributed at least once to the CPP.
However, OAS qualifications are:
- Being at least 65 or older
- Being a Canadian citizen or legal resident for 10 if you’re currently residing in Canada or 20 years if you’re currently residing outside Canada.
How to Apply for CPP Payment?
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.
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.
How to Make the Most of Your CPP Payments?
There’s no one-size-fits-all approach to making the most of your CPPs.
Depending on your situation, you may choose to invest your CPP payments in a high-yield savings account such as EQ Bank Savings Plus Account.
By doing so, you will have your money growing with high interest over time, helping you save more for your retirement.
Furthermore, you can make the most of your CPP payment by investing it in retirement accounts such as TFSA and RRSP. That way, your money will grow tax-free over time.
So don’t put all your eggs in one basket. Diversify your income to anticipate comfortable retirement days.
Final Thoughts on CPP Payment Dates 2021
CPP payment dates 2021 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 2021?
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.
Subscribe to our newsletter to stay up-to-date with the changes on CPP payment dates.
FAQs on CPP Payment Dates for 2021
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.
Will CPP Benefits Increase in 2021?
Yes, CPP benefits are increased annually.
For example, the CPP contribution rate for employers and employees was 5.25%. But it increased to 5.45% in 2021.
On the other hand, the self-employed CPP contribution increased from 10.5% in 2020 to 10.9% in 2021.
Additionally, the maximum pensionable earnings increased to $61,600 in 2021 from $58,700 in 2020.
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.
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.
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.
Can You Refuse to Pay CPP?
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.
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.
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 invest in retirement accounts such as tax-free savings accounts (TFSA) and registered retirement savings plan (RRSP).
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.
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.
If you’ve more questions on CPP payment dates… don’t hesitate to let me know in the comment section.