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CPP Issues

Maximum Canada Pension Plan pensionable earnings for 2022: $64,900.

Exemption: $3,500

Maximum contributory earnings:

$61,400× 5.70% = $3,499.80 × 2 (self-employed individuals) = $6,999.60

If you are considering accessing your CPP retirement pension, here are some of the points you should be aware of:

  • CPP retirement pension on income earned during the years you have been together can be split up to 50% with your spouse (or common-law partner) once your application has been approved. If only one person has contributed to CPP, the pension can be split into equal payments and the pension is then taxed in the hands of the recipients. Advantages of splitting include shifting income to a lower tax bracket spouse and reducing or eliminating the “claw back” of Old Age Security;
  • Due to the number of drop off years that you are granted for the calculation of the monthly benefit, it is possible to have zero or minimal contributions to the CPP program for a year without an impact to your monthly pension. Given the large cost of CPP to self-employed individuals (shown above), the opportunity for significant savings exists in the right situation. For an estimate on the amount of your CPP pension and earnings history, please contact Canada Pension at 1-800-277-9914. From this information, we can assist you in making your CPP decision going forward until retirement.