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Canada Pension Plan (R.S.C., 1985, c. C-8)

Full Document:  

Act current to 2021-11-17 and last amended on 2020-03-01. Previous Versions

PART IIPensions and Supplementary Benefits (continued)

DIVISION BCalculation of Benefits (continued)

Retirement Pension (continued)

Marginal note:Earnings for which second additional contribution deemed for month

  •  (1) For the purpose of calculating the second additional pensionable earnings of a contributor for a month in any year for which they have made a second additional contribution, that contribution is deemed to have been made for all months in the year, and the earnings for which the contributor is deemed to have made that contribution for each month in the year are an amount calculated by dividing their second additional unadjusted pensionable earnings for the year by 12, except that

    • (a) for a year in which the contributor reaches 18 years of age, the second additional contribution is deemed to have been made for earnings for the months in the year after they reached that age; and

    • (b) for a year in which the contributor reaches 70 years of age or dies or in which a retirement pension becomes payable to them under this Act or under a provincial pension plan, the second additional contribution is deemed to have been made for earnings for the months in the year before they reached 70 years of age or died or before the retirement pension became payable, as the case may be.

    If paragraph (a) or (b) applies, the earnings for which the contributor is deemed to have made a second additional contribution for each such month are an amount calculated by dividing their second additional unadjusted pensionable earnings for that year by the number of those months.

  • Marginal note:If no second additional contribution made

    (2) For the purpose of calculating the second additional pensionable earnings of a contributor for a month in any year for which the contributor made no second additional contribution, the amount of the earnings for which that contribution is deemed to have been made for any month in the year is deemed to be zero.

  • Marginal note:When second additional contribution deemed to have been made

    (3) For the purposes of this Part, a contributor is deemed to have made a second additional contribution for earnings for any month for which a second additional contribution is deemed by subsection (1) to have been made by them.

  • 2016, c. 14, s. 27
  • 2018, c. 12, s. 376

Marginal note:Base unadjusted pensionable earnings for a year

  •  (1) Subject to section 54, the base unadjusted pensionable earnings of a contributor for a year are an amount equal to

    • (a) the aggregate of

      • (i) his contributory salary and wages for the year, and

      • (ii) his contributory self-employed earnings for the year in the case of an individual described in section 10,

    • (b) the aggregate of

      • (i) the contributor’s earnings on which a base contribution has been made for the year under this Act, calculated as the aggregate of

        • (A) the contributor’s salary and wages on which a base contribution has been made for the year, and

        • (B) the amount of any base contribution required to be made by the contributor for the year in respect of the contributor’s self-employed earnings divided by the contribution rate for self-employed persons for the year,

      • (ii) the contributor’s earnings on which a base contribution has been made for the year under a provincial pension plan, calculated as the aggregate of

        • (A) the amount that is determined in the prescribed manner to be the contributor’s salary and wages on which a base contribution has been made for the year by the contributor under a provincial pension plan, and

        • (B) the amount of any base contribution required to be made by the contributor for the year under a provincial pension plan in respect of the contributor’s self-employed earnings divided by the contribution rate for self-employed persons for the year, and

      • (iii) his basic exemption for the year, or

    • (c) his maximum pensionable earnings for the year,

    whichever is the least, except that if the amount calculated as provided in paragraph (a) is equal to or less than the amount of the contributor’s basic exemption for the year, the contributor’s base unadjusted pensionable earnings for that year are deemed to be zero.

  • Marginal note:Year in which retirement pension commences

    (2) For the purposes of subsection (1), for the year in which a retirement pension becomes payable under this Act,

    • (a) the contributor’s basic exemption is equal to that proportion of the amount of the Year’s Basic Exemption that the number of months in the year that are not excluded from the contributory period — and are before the retirement pension becomes payable — is of 12; and

    • (b) the contributor’s maximum pensionable earnings is equal to that proportion of the amount of the Year’s Maximum Pensionable Earnings that the number of months in the year that are not excluded from the contributory period — and are before the retirement pension becomes payable — is of 12.

  • R.S., 1985, c. C-8, s. 53
  • R.S., 1985, c. 30 (2nd Supp.), s. 20
  • 2009, c. 31, s. 35
  • 2016, c. 14, s. 28
  • 2018, c. 12, s. 377

Marginal note:First additional unadjusted pensionable earnings for a year

  •  (1) Subject to sections 53.5 and 54.1, for 2019 and each subsequent year, the first additional unadjusted pensionable earnings of a contributor for a year are an amount equal to the least of

    • (a) the aggregate of

      • (i) their contributory salary and wages for the year, and

      • (ii) their contributory self-employed earnings for the year in the case of an individual described in section 10,

    • (b) the aggregate of

      • (i) their earnings on which a first additional contribution has been made for the year calculated as the aggregate of

        • (A) their salary and wages on which a first additional contribution has been made for the year, and

        • (B) the amount of any first additional contribution required to be made by the contributor for the year in respect of the contributor’s self-employed earnings divided by the first additional contribution rate for self-employed persons for the year,

      • (ii) their earnings on which a first additional contribution has been made for the year under a provincial pension plan, calculated as the aggregate of

        • (A) the amount that is determined in the prescribed manner to be their salary and wages on which a first additional contribution has been made for the year by them under a provincial pension plan, and

        • (B) the amount of any first additional contribution required to be made by the contributor for the year under a provincial pension plan in respect of the contributor’s self-employed earnings divided by the first additional contribution rate for self-employed persons for the year, and

      • (iii) their basic exemption for the year, and

    • (c) their maximum pensionable earnings for the year.

    However, if the amount calculated as provided in paragraph (a) is equal to or less than the amount of their basic exemption for the year, their first additional unadjusted pensionable earnings for that year are deemed to be zero.

  • Marginal note:Year in which retirement pension becomes payable

    (2) For the purposes of subsection (1), for the year in which a retirement pension becomes payable under this Act,

    • (a) the contributor’s basic exemption is equal to that proportion of the amount of the Year’s Basic Exemption that the number of months in the year that are before the retirement pension becomes payable is of 12; and

    • (b) the contributor’s maximum pensionable earnings is equal to that proportion of the amount of the Year’s Maximum Pensionable Earnings that the number of months in the year that are before the retirement pension becomes payable is of 12.

  • 2016, c. 14, s. 29
  • 2018, c. 12, s. 378

Marginal note:Second additional unadjusted pensionable earnings for year

  •  (1) Subject to sections 53.6 and 54.2, for 2024 and each subsequent year, the second additional unadjusted pensionable earnings of a contributor for a year are an amount equal to the least of

    • (a) the aggregate of

      • (i) the amount by which their contributory salary and wages for the year — not exceeding the contributor’s additional maximum pensionable earnings — exceeds the contributor’s maximum pensionable earnings,

      • (ii) in the case of an individual described in section 10, the amount by which their contributory self-employed earnings for the year — not exceeding the contributor’s additional maximum pensionable earnings — exceeds the contributor’s maximum pensionable earnings,

    • (b) their earnings on which a second additional contribution has been made for the year calculated as the aggregate of

      • (i) their salary and wages on which a second additional contribution has been made for the year,

      • (ii) their earnings on which a second additional contribution has been made for the year under a provincial pension plan, calculated as the aggregate of

        • (A) the amount that is determined in the prescribed manner to be their salary and wages on which a second additional contribution has been made for the year by them under a provincial pension plan, and

        • (B) the amount of any second additional contribution required to be made by the contributor for the year under a provincial pension plan in respect of the contributor’s self-employed earnings divided by the second additional contribution rate for self-employed persons for the year, and

      • (iii) the amount of any second additional contribution required to be made by the contributor for the year in respect of the contributor’s self-employed earnings divided by the second additional contribution rate for self-employed persons for the year, and

    • (c) the difference between the contributor’s additional maximum pensionable earnings and the contributor’s maximum pensionable earnings.

  • Marginal note:Year in which retirement pension becomes payable

    (2) For the purposes of subsection (1), for the year in which a retirement pension becomes payable under this Act,

    • (a) the contributor’s maximum pensionable earnings is equal to that proportion of the amount of the Year’s Maximum Pensionable Earnings that the number of months in the year that are before the retirement pension becomes payable is of 12; and

    • (b) the contributor’s additional maximum pensionable earnings is equal to that proportion of the amount of the Year’s Additional Maximum Pensionable Earnings that the number of months in the year that are before the retirement pension becomes payable is of 12.

  • 2016, c. 14, s. 29
  • 2018, c. 12, s. 379

Marginal note:Attribution of amount for first additional contributory period — one child

  •  (1) An amount, determined by the following formula, shall be attributed to a contributor for a year during which they were a family allowance recipient with respect to one child, if that amount is greater than their first additional unadjusted pensionable earnings for that year and is greater than their basic exemption for the year:

    [[(M1 × A) + (M2 × B) + (M3 × C) + (M4 × D) + (M5 × E) + (M6 × F) + Q]/R] × T

    where

    A
    is the first additional unadjusted pensionable earnings of the contributor for the fifth year before the year in which the contributor became a family allowance recipient with respect to the child, divided by the Year’s Maximum Pensionable Earnings for that fifth year;
    B
    is the first additional unadjusted pensionable earnings of the contributor for the fourth year before the year in which the contributor became a family allowance recipient with respect to the child, divided by the Year’s Maximum Pensionable Earnings for that fourth year;
    C
    is the first additional unadjusted pensionable earnings of the contributor for the third year before the year in which the contributor became a family allowance recipient with respect to the child, divided by the Year’s Maximum Pensionable Earnings for that third year;
    D
    is the first additional unadjusted pensionable earnings of the contributor for the second year before the year in which the contributor became a family allowance recipient with respect to the child, divided by the Year’s Maximum Pensionable Earnings for that second year;
    E
    is the first additional unadjusted pensionable earnings of the contributor for the year before the year in which the contributor became a family allowance recipient with respect to the child, divided by the Year’s Maximum Pensionable Earnings for that prior year;
    F
    is,
    • (a) in the case where an amount has been previously attributed by this section for the year in which the contributor became a family allowance recipient with respect to the child, that amount, or

    • (b) in any other case,

      • (i) if the contributor became a family allowance recipient with respect to the child in January, zero, or

      • (ii) in any other case, the lesser of 1 and the number determined by the formula

        G/[H × (M6/12)]

        where

        G
        is the first additional unadjusted pensionable earnings of the contributor for the year in which the contributor became a family allowance recipient with respect to the child, and
        H
        is the Year’s Maximum Pensionable Earnings for the year in which the contributor became a family allowance recipient with respect to the child;
    M1
    is the lesser of
    • (a) the number of months in the contributor’s first additional contributory period in the fifth year before the year in which the contributor became a family allowance recipient with respect to the child, and

    • (b) the number determined by the formula

      12 − M6

    M2
    is the number of months in the contributor’s first additional contributory period in the fourth year before the year in which the contributor became a family allowance recipient with respect to the child;
    M3
    is the number of months in the contributor’s first additional contributory period in the third year before the year in which the contributor became a family allowance recipient with respect to the child;
    M4
    is the number of months in the contributor’s first additional contributory period in the second year before the year in which the contributor became a family allowance recipient with respect to the child;
    M5
    is the number of months in the contributor’s first additional contributory period in the year before the year in which the contributor became a family allowance recipient with respect to the child;
    M6
    is the number of months in the contributor’s first additional contributory period in the year in which the contributor became a family allowance recipient with respect to the child that are before the month in which they became a family allowance recipient with respect to that child;
    Q
    is, as the case may be,
    • (a) if the sum of M1, M2, M3, M4, M5 and M6 is less than 36, the number determined by the formula

      [36 − (M1 + M2 + M3 + M4 + M5 + M6)] × 0.4

    • (b) in any other case, zero;

    R
    is the greater of 36 and the sum of M1, M2, M3, M4, M5 and M6; and
    T
    is the Year’s Maximum Pensionable Earnings for the year for which the amount is to be attributed.
  • Marginal note:Attribution of amount for first additional contributory period — more than one child

    (2) If the contributor is a family allowance recipient with respect to more than one child in a year, an amount shall be attributed to the contributor for that year that is the greater of each amount determined under subsection (1), calculated with respect to each child without regard to the other children.

  • Marginal note:Year in which retirement pension becomes payable

    (3) For the purposes of subsection (1), for the year in which a retirement pension becomes payable under this Act, the contributor’s basic exemption is equal to that proportion of the amount of the Year’s Basic Exemption that the number of months in the year that are before the retirement pension becomes payable is of 12.

  • Marginal note:Year in which first additional contributory period begins or ends

    (4) For the purposes of subsection (1), for a year in which the contributor’s first additional contributory period begins or ends, the amount to be attributed to the contributor is equal to that proportion of the amount determined in accordance with subsection (1) that the number of months that are included in the contributor’s first additional contributory period in that year is of 12.

 
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