Canada's Maximum Benefits for a Pension Plan

The CPP provides income support to retired and disabled Canadians.
The CPP provides income support to retired and disabled Canadians. (Image: monkeybusinessimages/iStock/Getty Images)

Most working Canadians have regular contributions to the Canada Pension Plan (CPP) deducted from their pay. The CPP is designed to provide income support to Canadians when they retire or if they become disabled. CPP benefit rates are calculated once a year and are divided into 12 equal monthly payments. CPP yearly rates are calculated in relation to the consumer price index, which tracks the costs of daily life essentials such as food, shelter and clothing.

Retirement Pension

As of 2010, the maximum monthly benefit for a standard CPP retirement pension is $934.17. You can begin receiving CPP retirement pension benefits from the age of 60, but your payments will be larger if you wait until you are older than 65 to begin collecting benefits. In addition to age considerations, your monthly benefit is calculated based on how much you have contributed to the CPP program and for how many years. The CPP retirement pension calculation is designed to come up with a monthly payment that replaces 25 percent of your regular pre-retirement income.

Disability Pension

As of 2010, the maximum monthly benefit for a CPP disability pension is $1,126.76. You can receive CPP disability benefits if you are younger than 65, suffer from a severe and prolonged medical condition that prevents you from doing any kind of paid work and have been making regular CPP program payments for four of the past six years. If you have made CPP contributions for 25 years or more, you only need to have made contributions for three of the past six years to qualify for a CPP disability pension. If, for any reason, your medical condition improves and you are able to work, you will no longer be eligible to collect CPP disability benefits.

Survivor's Pension

As of 2010, the maximum monthly payment for a CPP survivor's pension is $560.50. To qualify for a survivor's pension, you must be the spouse or common-law partner of a deceased CPP program contributor and the deceased CPP contributor must have made CPP contributions for at least three years. The amount paid is calculated based on how much and for how long the deceased made CPP contributions and the age of the survivor. If the survivor is older than 65, she can receive 60 percent of the deceased's CPP retirement pension benefits. If the surviving spouse is receiving CPP retirement benefits of her own, the survivor's benefit payments may be reduced.

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