Changes to CPP – January 1, 2012
Beginning January 1, 2012 the Canada Revenue Agency is instituting changes to the Canada Pension Plan (CPP) that may affect you. These changes will affect those aged 60 to 70 who are working and currently receiving a CPP/QPP retirement pension. These changes will not affect you if you are currently 70 years of age or older.
The most important changes that will affect Western employees are:
- Employees who are aged 60 to 65 and receiving a CPP retirement pension must make CPP contributions. No action is required from you. Western will begin deducting CPP contributions from your pay in January 2012.
- Employees who are aged 65 to 70 and receiving a CPP retirement pension now have the option to make CPP contributions.
Important note: For those aged 65 to 70 and receiving a CPP retirement pension, Western must begin deducting CPP contributions beginning January 1, 2012 unless you “opt-out”. To do so, please complete form CPT30 and file the original form with the Canada Revenue Agency and a copy with Western. The form (CPT30) is available for download at: http://www.cra-arc.gc.ca/E/pbg/tf/cpt30/cpt30-11e.pdf . We must receive your form in Western Payroll (SSB - Room 5100) prior to December 30, 2011, in order to stop contributions for January 1, 2012.
Details of the CPP changes
Who is affected?
The changes will affect those who are employed and are aged 60-70 years old and receiving a CPP retirement pension.
Those who are not yet 60 years old, but who may wish to collect a CPP retirement pension while they are employed at Western, should be aware that the changes may affect them after their 60th birthday.
Who is not affected?
Those who are over 70 years old are not affected.
Those who are 60-70 years of age but not receiving a CPP/QPP retirement pension are not affected.
What has changed for those aged 60 to 65?
In the past, as per the legislation, if you elected to receive a CPP retirement pension, CPP contributions from your pay were stopped on the last pay of the month before you began receiving a CPP/QPP retirement pension. Proof of receiving a CPP retirement pension was required.
Effective your first pay in 2012, Western’s Payroll Department must now start deducting CPP contributions from your pensionable earnings again. No action is required from you.
What has changed for those aged 65 to 70?
In the past, as per the legislation, CPP contributions were stopped on the last pay of the month before you began receiving a CPP/QPP retirement pension. Proof of receiving a CPP retirement pension was required.
Effective your first pay of 2012, Western’s Payroll Department must start deducting CPP contributions from your pensionable wages again.
However, employees in this age bracket may choose not to make CPP contributions by completing the form, CPT30, Election to Stop Contributing to the Canada Pension Plan or Revocation of a Prior Election. You must file the CPT30 election form with the Payroll Department (SSB Room 5100) and the Canada Revenue Agency (CRA). No CPP contributions will be deducted on pay dates following the month the form is filed.
You may download the CPT30 form from the CRA’s website:
http://www.cra-arc.gc.ca/E/pbg/tf/cpt30/cpt30-11e.pdf
If you choose to make CPP contributions starting January 2012, no action is required from you.
If you do not wish to make CPP contributions starting January 2012, you must file a CPT30 election form with the CRA and your Payroll Department in December, 2011. In order to stop CPP contributions for January 1, 2012 the completed CPT30 form must be received in Payroll (SSB-room 5100) by December 30, 2011.
If I elect not to make CPP contributions beginning in January 2012, may I begin making them later?
If you wish to restart CPP contributions in the future, a new CPT30 form must be filed to revoke a previous election to change your contribution status at that time. The CPT30 form can only be used once per calendar year. For example, if you file the CPT30 election form in 2012 to stop deductions, you may not file a CPT30 revocation again to restart deductions until 2013.
Note: If you are in this age bracket but not receiving a CPP/QPP retirement pension, there is no change. The Payroll Department will continue to deduct CPP contributions from your earnings. You cannot opt out of CPP contributions unless you are at least 65 years of age and receiving a CPP/QPP retirement pension.
Also from this web page:
More Information
Details on these changes and why they are being made can be found on the CRA’s website at the following links:
Service Canada – Changes to CPP
