Here's how the Canada Pension Plan is set to change

Here’s how the Canada Pension Plan is set to change

An extra $408 a year will be coming off paycheques



Online only.


Here are the forthcoming changes to the Canada Pension Plan agreed to Monday by the federal government and most of the provinces and territories:

— Increasing the income replacement rate to one-third from one-quarter, meaning the maximum CPP benefit will be about $17,478 instead of about $13,000.

How CPP changes could affect employees »

— Increasing premiums on employers and employees by one per cent, meaning an extra $408 a year coming off paycheques.

— Increased premiums will be phased in over seven years, starting in 2019.

— Increasing by 14 per cent to $82,700 the maximum amount of income subject to CPP.

Making sense of the CPP expansion »

— Expanding the refundable tax credit known as the federal working income tax benefit, to help low-income Canadians offset the increase in premiums.

— New portion of employee contributions to CPP will be tax deductible (not a tax credit).

Comments are closed.