Key Takeaways
- The Canada Pension Plan (CPP) is a social insurance program that provides monthly benefits to eligible Canadians who have contributed to the plan through their work earnings.
- The CPP payment dates for 2024 are usually on the third-last business day of each month. The exact dates are listed in the table below.
- The CPP payment amounts for 2024 are expected to increase by 4.4% from 2023, due to inflation indexing and the CPP enhancement. The average CPP retirement pension at age 65 will be $814.17 per month, and the maximum will be $1,421.22 per month.
- The CPP enhancement is a gradual increase in the CPP contribution rate and benefit rate that started in 2019 and will continue until 2025. The enhancement aims to replace one third of the average work earnings, up from one quarter, for future retirees.
- The CPP payment increase will also affect other CPP benefits, such as the disability pension, the survivorโs pension, and the post-retirement benefit.
If you are a Canadian worker or retiree, you may be wondering how much CPP you will receive in 2024 and when you will get paid. The Canada Pension Plan (CPP) is one of the main sources of retirement income for many Canadians, along with the Old Age Security (OAS) program, workplace pensions, and personal savings. Knowing the CPP payment dates and amounts for 2024 can help you plan your finances and budget accordingly.
In this article, we will explain the CPP payment schedule, the CPP payment increase, and the CPP enhancement for 2024. We will also provide some tips on how to maximize your CPP benefits and prepare for retirement.
What is the CPP and How Does it Work?
The CPP is a contributory social insurance program that provides a monthly pension to eligible Canadians who have contributed to the plan through their work earnings. The CPP covers nearly all workers in Canada, except those in Quebec who are covered by the Quebec Pension Plan (QPP), a similar program.
The CPP is funded by mandatory contributions from employees and employers, as well as investment returns from the CPP Investment Board (CPPIB). The CPP contribution rate for 2024 is 6.0% for employees and 12.0% for self-employed individuals, up from 5.95% and 11.9% in 2023, respectively. The CPP contribution rate is split into two levels: the first level applies to earnings up to the yearly maximum pensionable earnings (YMPE), which is $66,600 in 2024, and the second level applies to earnings between the YMPE and a higher limit, which is $72,900 in 2024.
The CPP provides various benefits to contributors and their families, such as:
- The CPP retirement pension: a monthly benefit that replaces a portion of your pre-retirement earnings, based on your contributions and earnings history. You can start receiving the CPP retirement pension as early as age 60 or as late as age 70, with an adjustment for early or late take-up. The CPP retirement pension is indexed to inflation and paid for life.
- The CPP disability pension: a monthly benefit that provides income support to contributors who are unable to work due to a severe and prolonged disability. The CPP disability pension also includes a monthly benefit for dependent children under the age of 18, or 25 if they are full-time students.
- The CPP survivorโs pension: a monthly benefit that provides income support to the surviving spouse or common-law partner of a deceased contributor. The amount of the CPP survivorโs pension depends on the age of the survivor, the amount of the deceased contributorโs CPP retirement pension, and whether the survivor is also receiving their own CPP retirement pension.
- The CPP death benefit: a one-time, lump-sum payment that helps cover the cost of the funeral expenses of a deceased contributor. The CPP death benefit is equal to six times the amount of the deceased contributorโs CPP retirement pension, up to a maximum of $2,500.
- The CPP post-retirement benefit: a monthly benefit that increases your CPP retirement pension if you continue to work and contribute to the CPP after you start receiving your CPP retirement pension. The CPP post-retirement benefit is calculated separately for each year of contributions and is indexed to inflation.
What are the CPP Payment Dates for 2024?
The CPP payment dates for 2024 are usually on the third-last business day of each month. However, in December, the CPP payment date is earlier than usual due to the Christmas holiday period. The CPP payment dates for 2024 are as follows:
| Month | CPP Payment Date |
|---|---|
| January | January 29, 2024 |
| February | February 27, 2024 |
| March | March 26, 2024 |
| April | April 26, 2024 |
| May | May 29, 2024 |
| June | June 26, 2024 |
| July | July 29, 2024 |
| August | August 28, 2024 |
| September | September 25, 2024 |
| October | October 29, 2024 |
| November | November 27, 2024 |
| December | December 20, 2024 |
If you have set up direct deposit, your CPP payment will be deposited into your bank account on these dates. If you receive your CPP payment by mail, you can expect to receive your cheque a few days after the payment date.
How Much CPP Will I Get in 2024?
The amount of CPP you will get in 2024 depends on several factors, such as:
- The age at which you start receiving your CPP retirement pension: if you start receiving your CPP retirement pension before age 65, your pension will be reduced by 0.6% for each month of early take-up, up to a maximum of 36% at age 60. If you start receiving your CPP retirement pension after age 65, your pension will be increased by 0.7% for each month of late take-up, up to a maximum of 42% at age 70.
- Your contribution history: the amount of CPP you will get is based on your average work earnings and the number of years you contributed to the CPP. The CPP uses a formula that takes into account your best 40 years of earnings, adjusted for inflation, up to the YMPE in each year. The CPP also provides drop-out provisions that allow you to exclude some low-earning or zero-earning years from the calculation, such as years when you were raising children under the age of seven, or years when you were disabled and receiving the CPP disability pension.
- The maximum pensionable earnings: the CPP only covers a portion of your income, up to the YMPE in each year. The YMPE is adjusted annually based on the average industrial wage in Canada. For 2024, the YMPE is $66,600, up from $64,900 in 2023. This means that any income above the YMPE does not increase your CPP contributions or benefits.
The CPP payment amounts for 2024 are expected to increase by 4.4% from 2023, due to inflation indexing and the CPP enhancement. The average CPP retirement pension at age 65 will be $814.17 per month, and the maximum will be $1,421.22 per month. The table below shows the average and maximum CPP payment amounts for 2024, as well as the percentage increase from 2023.
| Type of CPP Benefit | Average Amount for New Beneficiaries (October 2023) | Maximum Payment Amount (2024) | Percentage Increase from 2023 |
|---|---|---|---|
| Retirement pension (at age 65) | $779.58 | $1,421.22 | 4.4% |
| Post-retirement benefit (at age 65) | $10.92 | $42.64 | 4.4% |
| Disability pension | $1,079.81 | $1,537.50 | 4.4% |
| Survivorโs pension (younger than 65) | $477.21 | $707.34 | 4.4% |
| Survivorโs pension (65 and older) | $302.28 | $783.65 | 4.4% |
| Children of disabled CPP contributors | $281.72 | $281.72 | 0% |
| Children of deceased CPP contributors | $269.87 | $281.72 | 4.4% |
| Death benefit (one-time payment) | $2,394.62 | $2,500.00 | 4.4% |
Note that these are the maximum benefit amounts for benefits starting in January 2024. The maximum benefit amounts increase every month as a result of the CPP enhancement.
What is the CPP Enhancement and How Does it Affect My CPP Benefits?
The CPP enhancement is a gradual increase in the CPP contribution rate and benefit rate that started in 2019 and will continue until 2025. The CPP enhancement aims to replace one third of the average work earnings, up from one quarter, for future retirees. The CPP enhancement also introduces a second, higher earnings limit that will increase the amount of income covered by the CPP.
The CPP enhancement affects both the contributions and the benefits of the CPP. For contributions, the CPP enhancement increases the contribution rate and benefit rate for the first level of earnings, up to the YMPE. For 2024, the contribution rate for the first level of earnings is 6.0% for employees and 12.0% for self-employed individuals, up from 5.95% and 11.9% in 2023, respectively.
The CPP enhancement also introduces a second level of earnings, between the YMPE and a higher limit. For 2024, the higher limit is $72,900, up from $70,100 in 2023. The contribution rate for the second level of earnings is 8.0% for employees and 16.0% for self-employed individuals, up from 7.5% and 15.0% in 2023, respectively.
For benefits, the CPP enhancement increases the benefit rate for both the first and second levels of earnings. The benefit rate for the first level of earnings is 33.33% in 2024, up from 33.14% in 2023. The benefit rate for the second level of earnings is 16.67% in 2024, up from 16.37% in 2023.
The CPP enhancement will affect your CPP benefits depending on when you made contributions and when you start receiving benefits. If you made contributions before 2019, your CPP benefits will be calculated based on the old rules. If you made contributions after 2019, your CPP benefits will be calculated based on a combination of the old and new rules. The more you contribute under the new rules, the higher your CPP benefits will be.
The CPP enhancement will also affect other CPP benefits, such as the disability pension, the survivorโs pension, and the post-retirement benefit. These benefits will also increase based on the new contribution and benefit rates.
IMPORTANT LINKS:
- What Expenses Can You Deduct from Your Rental Income? (Updated 2024)
- How to Get Your EITC Refund Faster in 2024
- CPP, RRSP, TFSA, FHSA, AMT and OAS Changes: What You Need to Know for 2024
- What Happens to Your CPP and OAS Benefits When Your Spouse Dies?
- How to Get the Grocery Rebate Payments in Canada in January 2024
How Can I Maximize My CPP Benefits and Prepare for Retirement?
The CPP is an important source of retirement income, but it is not enough to maintain your pre-retirement lifestyle. The CPP is designed to replace only a portion of your average work earnings, and the actual amount you will receive depends on your contribution history and the age at which you start receiving your CPP retirement pension.
Therefore, it is important to plan ahead and supplement your CPP benefits with other sources of income, such as the OAS program, workplace pensions, personal savings, and investments. Here are some tips on how to maximize your CPP benefits and prepare for retirement:
- Check your CPP statement of contributions: this is a record of your CPP contributions and estimated benefits. You can access your CPP statement of contributions online through your My Service Canada Account, or request a copy by mail. Your CPP statement of contributions can help you estimate how much CPP you will receive, and identify any errors or missing information in your contribution history.
- Decide when to start receiving your CPP retirement pension: you can start receiving your CPP retirement pension as early as age 60 or as late as age 70, with an adjustment for early or late take-up. The best time to start receiving your CPP retirement pension depends on your personal and financial situation, such as your health, life expectancy, income needs, tax implications, and other sources of income. Generally speaking, the longer you delay your CPP retirement pension, the higher your monthly benefit will be, but the fewer years you will receive it. You should weigh the pros and cons of each option and consult a financial planner if needed.
- Continue to work and contribute to the CPP after age 65: if you continue to work and contribute to the CPP after you start receiving your CPP retirement pension, you will increase your CPP benefits through the CPP post-retirement benefit. The CPP post-retirement benefit is calculated separately for each year of contributions and is indexed to inflation. You can opt out of contributing to the CPP after age 65, but you will not receive the CPP post-retirement benefit for that year.
- Apply for other CPP benefits if you are eligible: if you are disabled, widowed, or have dependent children, you may be eligible for other CPP benefits, such as the disability pension, the survivorโs pension, or the childrenโs benefit. These benefits can provide additional income support and help you cope with unexpected life events. You should apply for these benefits as soon as possible, as they are not retroactive and may have deadlines.
- Save and invest for your retirement: the CPP is only one of the pillars of your retirement income. You should also save and invest for your retirement through other means, such as the Registered Retirement Savings Plan (RRSP), the Tax-Free Savings Account (TFSA), the Guaranteed Income Supplement (GIS), and the Canada Pension Plan Investment Board (CPPIB). These programs can help you grow your money, reduce your taxes, and diversify your income sources. You should also review your spending habits, budget, and financial goals regularly, and adjust your plan accordingly.
Conclusion
The CPP is a valuable program that provides monthly benefits to eligible Canadians who have contributed to the plan through their work earnings. The CPP payment dates for 2024 are usually on the third-last business day of each month, and the CPP payment amounts for 2024 are expected to increase by 4.4% from 2023, due to inflation indexing and the CPP enhancement. The CPP enhancement is a gradual increase in the CPP contribution rate and benefit rate that started in 2019 and will continue until 2025, aiming to replace one third of the average work earnings for future retirees.
The CPP is an important source of retirement income, but it is not enough to maintain your pre-retirement lifestyle. You should also plan ahead and supplement your CPP benefits with other sources of income, such as the OAS program, workplace pensions, personal savings, and investments. You should also check your CPP statement of contributions, decide when to start receiving your CPP retirement pension, continue to work and contribute to the CPP after age 65, apply for other CPP benefits if you are eligible, and save and invest for your retirement.
We hope this article has helped you understand the CPP payment dates and amounts for 2024, and how to maximize your CPP benefits and prepare for retirement. If you have any questions or comments, please feel free to leave them below. We would love to hear from you.
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Source: (1) Benefits payment dates โ Canada.ca.ย https://www.canada.ca/en/services/benefits/calendar.html. (2) Canada Pension Plan Payment Schedule and Dates.ย https://canpension.ca/articles/when-does-canada-pension-plan-cpp-get-paid-key-dates-and-schedule-explained.