Lesson 2

Question 1

1.1 describe the role of CPP and providing income security to Canadians.

Answer 1

CPP is meant to replace between 25 and 33% of a persons income. With the 25% applying to those before the 2019 enhancements and 33% for those there after.

Question 2

1.1 B describe the 2019 enhancements to CPP.

Answer 2

Phasing in over seven year. The enhancements have a goal of ultimately increasing target benefit levels to 33% of the persons income.

This objective will be achieved through

1. A gradual increase in the contribution rates every year over the seven year. Timeframe
2. In 2024 and 2025, an increase in the level of annual earnings subject to contributions over and above the original earnings limit of the average wage in Canada. 

Question 3

1.2 describe the first step of the 2019 enhancements to CPP.

Answer 3

The contribution rates will increase from 2019 each year through to 2023

Question 4

1.2 describe the second step of the enhancements to CPP.

Answer 4

In 2024 and 2025 a higher rate of annual earnings will have CPP contributions deducted from

In 2024 this will be 107% of the first earning ceiling and in 2025. This will be 114% of the first earning ceiling after the 2025 the earning ceiling will increase each year to reflect wage growth

Question 5

Define YAMPE

Answer 5

This is the years additional maximum pensionable earnings also referred to as the second ceiling

Employer contributions on the new range. Earnings will be equal to employee contributions and must go up to this limit rather than the previous limit of the YMPE.

Question 6

2.1 what is the legislation that governs CPP

Answer 6

CPP falls under federal jurisdiction and is governed by an act to establish the comprehensive program of old age, pensions, and supplementary benefits in Canada payable to and in respect of contributors.

This is commonly called the CPP act.

Question 7

2.1 describe the provisions of the CPP act in respect to provinces plans.

Answer 7

The CPP act allows a province or territory to not be a part of the federal pension program. If it sets up a comparable program

Quebec established the QPP to operate in that province in the place of CPP legislation that governs the QPP program is the actor respecting the Quebec pension plan, which is often cited as QPP act.

Question 8

Who administers the CPP

Answer 8

CP is it ministered by the minister of employment and social development Canada (ESDC). The minister of national revenue is responsible for collecting contributions. The minister of finance and Provincial counterparts are responsible for setting contribution rates, pension and benefit levels. The crown corporation CPP investments is responsible for managing the CPP assets.

Question 9

Who administers the QPP

Answer 9

QPP is administered by retraite Quebec.

The minister of finance is responsible for setting QPP contribution rate pension and benefit levels and funding policies.

Revenue Quebec is responsible for collecting contributions.

The caisse de dépôt et placemont du Québec [CDPQ] is responsible for managing the investment of assets in respect to QPP

Question 10

How are changes to CPP and QPP made

Answer 10

Changes to CPP must be made through an act of parliament.

Notice of any proposed changes must be given by the federal government to each participating province and changes require agreement of at least 2/3 of included provinces, representing 2/3 of the population

Changes coming to force only after two years of notice unless all provinces waive this requirement.

Quebec participates in decision making regarding changes to CPP even though it administers its own plan to help in sure portability of QPP & CPP across Canada

Question 11

Explain how CPP and QPP are funded

Answer 11

CPP and QPP are contributory plans with contributions made by employees, employers and self-employed people

CPP funding requires:
A. steady state funding to build a reserve of assets that we generate investment earnings to contribute to future benefit

B. Incremental for funding, a benefit increases or the addition of new benefits. That is, the cost of new or higher benefits would be paid as the benefit was earned, and any cost associated with benefits that were paid, but not earned, would be amortized and paid over a defined period of time consistent with actuarial practice

Although the contribution rates for QPP, are slightly higher than those for CPP contributions to the two plans are generally determined in the same manner.

Question 12

2.3 define pensionable employment under CPP and QPP.

Answer 12

Employment determines weather individuals are covered

Both CPP and QPP, define pensionable employment as unemployment, with specific exceptions, or other exemptions, as divid by legislation

Question 13

2.3 define employee under CPP and QPP.

Answer 13

Employee is defined as an individual who is compensated for services performed in whose duties are under the control of an employer

To be covered by QPP an employee must report to work at employers establishment situated in Quebec. Otherwise, the employee or self-employed individual in pensionable employment is covered under CPP.

Question 14

2.3 define employer under CPP & QPP

Answer 14

Employer is defined as any person liable to pay wages, salary, or other enumeration for services performed in employment

Question 15

2.3 define self-employment under CPP and QPP.

Answer 15

Is defined as earning once livelihood directly from one’s own trade or business, rather than as an employee of another

A self employed person must be a resident of Canada to be covered for CPP, and a resident of Quebec to be covered for QPP

If an individual working in Canada and contributing to CPP or QPP is sent by their employer to work abroad on a temporary basis. An international social security agreement may allow them to:

Continue contributing to CP or QPP for their work abroad, and have the periods abroad be considered as residence in Canada for eligibility purposes

Be exempt from contributions to the other country Social Security system

When working abroad, an individual should obtain a certificate of coverage from the CRA to inform the other country of the individuals coverage under CPP

Question 16

2.4 identify who is excluded from coverage by CPP & QPP.

Answer 16

Exempted employment is addressed by the CPP and QPP regulations and includes a long list of jobs in various industries. Either one payment is under $250 or fewer than 25 days are worked

Plus a list of other special situation’s such as religious orders were available if poverty is taken and wages, are paid to a religious order,

Exempted employment under CPP and QPP is similar with some exceptions

Question 17

3.1 what is the mandate of CPP investments (3)

Answer 17

1. Two invest the CPP fund in the best interest of CPP, contributors and beneficiaries.
2. Maximize. The long-term investment returns without undue risk with consideration of the factors that may affect the funding of CPP and its ability to meet its financial obligations.
3. Provide cash management services to CPP so that it can pay benefits.

Question 18

3.1 what are the two key governance documents, reflecting the CPPs investment mandate?

Answer 18

1. SIPP, the statement of and investment objectives policies, return expectations, and risk management for the investment portfolio of the Base Canada pension plan, and the additional pension plan. This document applies to the assets of the long horizon, investment portfolio
2. Statement of investment objectives, policies, return expectations, and risk management for the cash for benefits portfolio of the Base Canada pension plan, and the additional pension plan. This document applies to the assets required to pay CPP benefits in the near term.

Question 19

3.2 describe the entity that invest contributions directed by employees and employers to the QPP as well as a key piece of disclosure issued by that entity

Answer 19

The Caisse de depot at placement du Quebec [CDPQ] was created in 1965 by a law passed by the national assembly of Quebec with the role of managing the funds of the newly created QPP

Revenues collected over and above those required for immediate payment of benefits and administration costs are invested by the CDPQ as prescribed by the QPP act. As noted previously, the CDPQ now invest funds for a number of other Quebec entities, as well as the QPP funds.

An annual report is required to be made by CDPQ before April 15 of each year outlining its operations for the prior year.

Question 20

4.1 describe when CPP and QPP contributions are required

Answer 20

CPP/QPP contributions are required buying, please, including the self-employed, and their employers

1. In respect of all pensionable, employment,
2. If pensionable employment continues, and the retirement pension has started, to the maximum age of 70 a person who is over age 65 and receiving the CPP retirement pension, can opt out by filing a request with their employer to cease contributing. This opt out is not allowed under QPP.

Question 21

4.1 describe, CPP/QPP contributory periods

Answer 21

Contributory periods are defined as the amount of time a contributor was making contributions from employment or self-employment income.

Contributory. Are used to calculate the retirement pension, death, benefit, survivors pension, or surviving child/orphans benefit.

Note that this definition is not used to calculate the disability pension, or disabled contributors child benefit; for those benefits, a different definition of “contributory periods” mark is used

Question 22

4.2 describe the three categories of contributions, made by employees, employers, and self-employed individuals to CPP/QPP

Answer 22

1. Base contributions that are applicable to pensionable earnings between the years basic exemption [YBE], and the years maximum pensionable earnings [YMPE]
2. First additional contributions that started in 2019 and applicable to the same pensionable earnings as base contributions
3. Second additional contributions will start in 2024 and will be applicable to a new range of earnings between YMPE and the New Year’s additional maximum pensionable earnings. [YAMPE] under the CPP or the additional maximum pensionable earnings [AMPE] under the QPP

Employers are required to contribute the same amount as the employee contributions.

Self-employed, individuals contribute both employee and employer portions

Question 23

4.3 calculate the total 2021 CPP contributions for an employee earning $80,000 given 2021 YMPE of $58,100 and a total contribution rate of 5.45% comprising, 4.95% for the base plan and 0.5% for the additional plan.

Answer 23

Recall that the basic exemption is $3500.

Employee contributions will be $2975.70 employer contributions will be the same.

Question 24

4.4 explain how the calculation in question 4.3 would change under the QPP and for self-employed individuals under both plans.

Answer 24

Although the base contribution rate for the QPP is slightly higher than for CPP, the basic exemption, Maxximum, pensionable, earnings, and additional contribution rates are currently the same and contributions to the two plans are generally determined in the same manner

Self-employed individuals would pay both the employee and employer contributions

Question 25

4.5 describe the changes to the CPP/QPP contribution rate and the range of pensionable earnings effective January 2024

Answer 25

Starting in 2024 new second additional contribution will be required as a result. Contributions in that year will include the base contribution, the first additional contribution, and the new second additional contribution.

The second additional contribution will be in the range between the YMPE and the YAMPE. The YAMPE will be calculated as 107% of the maximum pension of a earnings for 2024 and for 114% in 2025 increasing at the same rate as the YMPE there after

The employee contribution rate for earnings that fall under second additional contributions will be 4% with the employer contributing the same again

Question 26

4.6 identify rules that apply in determining the deduction of CPP/QPP contributions for employers of employees who are in receipt of a CPP/QPP retirement pension for employees age 60-64

Answer 26

Player must deduct CPP contributions or QPP contributions

Question 27

4.6 identify rules that apply in determining the deduction of CPP/QPP contributions for employers of employees who are in receipt of a CPP/QPP retirement pension for employees age 65-70

Answer 27

The employer must deduct CPP contributions, unless the employee has filed an election with the employer to stop paying contributions. Once the election has been filed with the employer, contributions must stop in the following month. Contribution stop at age 70s regardless

Under QPP contributions are required. If pensionable employment continues to maximum of age 70 there is no opt out option under QPP.

Question 28

4.7 explain how the kinds of earnings subject to CPP/QPP contributions is determined [what is pensionable income]

Answer 28

Earnings subject to contributions are generally all income from pensionable employment. This means gross, personal income, including salary, wages, other enumeration, including tips, gratuities stock, options,

Taxable, benefits, or allowances are also generally considered pensionable income.

Question 29

5. 1 list the three components involved in the calculation of retirement pension at age 65 from the CPP or QPP.

Answer 29

1. 25% of average monthly pensionable earnings with average monthly pensionable earnings capped at the average YMPE/MPE
2. 8.33% of first additional monthly pensionable earnings.
3. 33.33% of second additional monthly pensionable earnings.

Question 30

5.1 at what ages can CPP or QPP start

Answer 30

CPP & QPP retirement pensions can start as early as 60 or as late as 70 in which case an adjustment is made to the pension amount to recognize either an expected longer or shorter period of payment

Question 31

5.1 list three provisions that exist in CPP and QPP that do not usually exist in privately sponsored plans

Answer 31

1. Provisions that allow for certain periods of low earnings [due to illness, child, rearing, or unemployment] to be excluded from the calculation of average earnings and from the contributory. Used to determine the individuals retirement pension.

2 provisions that allow an individual age 65 or older, who has started receiving the pension, and still working to contribute and accumulate additional benefits.

3. Provisions that allow the individual to share a portion of their retirement, income with their spouse, common law, partner, or civil union partner.

Question 32

5.2 outline to exclusions to individuals contributory periods (2)

Answer 32

1. Any months when the contributor received a CPP or QPP disability pension, or an indemnity under the Québec act respecting industrial accidents and occupational diseases or
2. Months when the contributor was receiving family allowance, benefits, or in Quebec an indemnity in a year when pension earnings were less than the YBE.

Question 33

5.2 list four excluded time periods to average monthly pensionable earnings

Answer 33

1. When receiving CPP disability benefits, or for QPP, an indemnity under the Quebec act. Respecting industrial accidents and occupational diseases
2. Times when caring for children under the age of seven [CPP] or receiving a family benefit [QPP].
3. Up to 17% [CPP] or 15% [QPP] of the contributors months of lowest earnings. Prior to the age of 65, provided at least 120 months are left in the individuals total contributory. Periods
4. For CPP only periods after age 65 while contributing to CPP.

Question 34

5.3 what is the adjustment made to the CPP/QPP retirement pension if it begins being paid before age 65

Answer 34

Pension is reduced by 0.6% per month that the member retires early this works out to 7.2% per year.

Question 35

5.3 what is the adjustment made to CPP/QPP if the pension starts after age 65

Answer 35

The pension is increased by 0.7% per month that the person retires after age 65 up to age 70 this means a retirement pension equal to 142% of the amount that would have been payable at age 65 is payable at age 70.

Question 36

5.4 explain the CPP post retirement benefit

Answer 36

The post retirement benefit is the increase to CPP for people who have started receiving their pension but are still working and so additional contributions are being made on their behalf. The amount of PR be earned each year is limited to 1/40 of the maximum CPP retirement pension.

Question 37

5.4 explain the QPP retirement, benefit supplement

Answer 37

The retirement benefits supplement is for people already receiving the QPP who are continuing to work and earn additional benefits.

This is equal to a maximum of 0.5% of the individuals pensionable earnings in the year.

Question 38

5.5 describes the death benefits, payable in respect of the CPP/QPP retirement pension

Answer 38

CPP death benefit is payable to the deceased contributors estate. The QPP death benefit is paid to the person or charity who paid the funeral expenses. If an application, including proof of payment is made within 60 days of the contributors death. If no, such application is made, the death benefit can be paid to the disease heirs.

The death benefit is a lump sum payment equal to $2500 unless the contributor qualified for a death benefit as a result of QPP special provisions Described under minimum contributory periods in that case the death benefit is equal to the amount of contributions made by the contributor up to a maximum of $2500

Question 39

5.5 list the requirements the deceased person must have met to qualify for a death benefit payment under CPP and QPP

Answer 39

For both CPP and QPP the deceased must have made contributions for

– at least 1/3 of the total number of calendar years included either wholly or partially within their contributory. And in any case for at least three calendar years or

– at least 10 calendar years.

QPP also considers a deceased contributor to have met the minimum requirements if.

– The deceased contributor paid at least $500 in QPP contributions

– no retirement pension, or disability pension under the QPP or similar plan was payable to the deceased contributor

Question 40

6.1 who may be eligible to receive survivors benefits under CPP/QPP (2)

Answer 40

Survivors benefits include pensions to surviving spouses and monthly flat rate payments to dependent children who meet certain eligibility, provisions

Question 41

6.1 describe the eligibility provisions that must be met to qualify for a survivors pension under CPP & QPP

Answer 41

To be eligible to receive a survivors pension and respect of a deceased contributor, who met the minimum contributory requirements an individual must meet one of the following definitions

– under CPP a survivor is defined as a person who is married, or common-law partner of the contributor at the time of the contributors death

– under QPP a surviving spouse is defined as a person who is married to the contributor, and not legally separated from bed and board, or is in a civil union with a contributor, or if these requirements are not met, has been living with a contributor in a de facto union for at least three years, or if there was a child born to the union or adopted

Under both QPP and CPP it is possible that no survivors pension is payable if it is decided that the contributors health at the time of marriage, would not justifying expectation of surviving for one year after the marriage

Question 42

6.1 describe the eligibility requirements to qualify for surviving child benefit under CPP

Answer 42

CPP uses the definition, dependent child to determine eligibility. A dependent child is defined as:

– under 18 years of age, or

– between 18 and 25 years of age, if in full-time attendance at a school or university or

– 18 years of age, or older and disabled, such a disability, existing without interruption since the leader of when the child reached age 18 or the date, the contributor died..

Question 43

6.1 describe the eligibility provisions that must be met to qualify for surviving child’s benefit under the QPP

Answer 43

QPP uses the definition, minor child to determine eligibility.

A minor child is a child of a contributor, either biological or adopted, who is under age 18 in addition, a child, who is under age 18,

And who was supported by the contributor for at least one year

with no other parties providing support for the child

will also be eligible to receive the surviving child’s benefit.

Question 44

6.2 describe the amount of CPP survivors pension for survivor of a deceased contributor, who is not receiving other CPP benefits

Answer 44

The amount is:
– 60% of the deceased contributors retirement pension at age 65 if the survivor is 65 or older
– 37.5% of the contributors retirement pension at age 65+ a flat amount if the survivor is under age 65.

Question 45

6.2 describe the amount of survivors pension for survivor of a deceased CPP contributor, who is receiving their own retirement, or disability pension from the CPP

Answer 45

The amount is determined, as for a person, not receiving CPP benefits themselves, and then combined with the retirement or disability pensions into a single monthly payment that is limited to a maximum of the following:

– if the survivor is receiving their own CPP retirement pension, the maximum combined payment is the maximum CPP retirement pension
– if the survivor is receiving a CPP disability pension, the maximum combined survivors pension and disability pension is the maximum CPP disability pension.

Question 46

6.3 Outline when QPP/CPP survivor’s benefits start and stop being paid

Answer 46

Payments are retroactive to the month following the month in which the contributor died. Under CPP, payments can be retroactive to a maximum of 12 months after the date the application was received.

The CPP/QPP survivor’s pension is paid for the lifetime of the survivor and stops with the payment for the month in which the survivor dies. Remarriage of the survivor does not cause payments for CPP/QPP survivor’s pension to stop.

Question 47

Can a person get more than one survivor’s benefit under CPP/QPP?

Answer 47

Neither CPP nor QPP allows a survivor to receive a CPP/QPP survivor’s pension in
respect of more than one deceased spouse or common-law partner. In the unfortunate situations where this occurs, the survivor receives the CPP/QPP survivor’s pension that is determined as the higher amount.

Question 48

What are the QPP rules around retroactive survivors benefit payments

Answer 48

Under QPP, this retroactive period can exceed 12 months if the contributor has disappeared or is absent, as long as the application was submitted within 12 months from the date that a declaratory judgement of death or attestation of death was issued. In this situation, retroactivity is normally limited to 36 months unless Retraite Québec approves an additional period.

Question 49

6.4 Describe the basic terms of the CPP/QPP surviving child’s/orphan’s benefit

Answer 49

A surviving child’s/orphan’s benefit is a flat rate payable monthly to each dependent child of a deceased contributor who made contributions for the minimum qualifying period.

Question 50

6.4 When do CPP/QPP surviving child’s/orphan’s benefits start

Answer 50

Surviving child’s/orphan’s benefits start on the later of the month following the month in which the contributor died, or the month following the month when the child was born.

QPP specifies that the child must have been born within 300 days following the contributor’s death. CPP/QPP includes provisions allowing retroactive payment of a surviving child’s/orphan’s benefit, up to a 12-month period. Under certain circumstances, QPP allows retroactive payment beyond 12 months.

Question 51

6.4 When do surviving child benefits end under QPP/CPP

Answer 51

When the child no longer meets the definition of dependent child or minor child

Question 52

7.1 Identify three eligibility criteria for CPP/QPP disability pensions

Answer 52

In order to receive a disability pension, the individual must
(1) be under age 65,
(2) meet certain eligibility requirements that relate to their contributory period and
(3) meet the definitions of “disabled.”

Question 53

7.1 What are the three terms used in the CPP definition of disability

Answer 53

1) Severe - regularly incapable of pursuing any substantially gainful occupation

2) Substantially gainful is an occupation that provides them with earnings greater than the amount that equals the maximum annual disability pension amount

3) Prolonger means that the disability is likely to be long term, of indefinite duration or to result in their death

Question 54

7.1 Describe the differences of the QPP definition of disability from the CPP definition of disability after age 60

Answer 54

For QPP, the same basic definitions apply for individuals who are under age 60. For individuals 60 years of age or older at the time of application, “severe” means that they are incapable of regularly carrying on their usual gainful occupation at the time the disability caused them to stop working.

Question 55

What is the definition of a gainful occupation under QPP?

Answer 55

Under QPP, a “gainful” occupation is one that provides an individual with earnings at least equal to or greater than the year’s basic exemption for the year.

Question 56

What is the definition of Severe under CPP disability

Answer 56

means that they are incapable regularly of pursuing any substantially
gainful occupation.

Question 57

What is the definition of Substantially Gainful under CPP disability

Answer 57

is an occupation that provides them with earnings equal to or greater than the amount that equals the maximum annual disability pension amount.

Question 58

What is the definition of prolonged under CPP disability

Answer 58

means that the disability is likely to be long-term, to be of indefinite duration or to result in their death.

Question 59

Outline the minimum contributory periods for CPP disability pensions

Answer 59

four of the last six calendar years that are wholly or partly within an individual’s “contributory period.” In some cases, the minimum contributory period is determined differently, including if an individual has contributed for more than 25 years or had previously been in receipt of CPP disability benefits.

Question 60

7.2 outline the minimum contributory periods under disability pension for QPP

Answer 60

For QPP, the minimum contributory period is generally two of the last three years that are included in an individual’s “contributory period.”

The minimum period is determined differently in special cases such as for those over age 60 (have to have paid 4 of the las 6 years)

other contribution requirements are if the person has contributed for 5 of the last 10 years and or half the number of years in their contribution period but at least 2 years

Question 61

7.3 Identify when CPP/QPP disability pensions starts

Answer 61

Paid monthly starting the fourth month following the month in which the individual became disabled.

Question 62

7.3 Under CPP/QPP disability when does disability start upon a reoccurrance

Answer 62

if the person whose disability ceases and who then returns to work then becomes disabled again within 5 years of the same disability can start a new CPP disability pension after only one month.

The same rule applies for QPP only if the disability is for the same cause

Question 63

7.3 When does CPP/QPP disability stop (4 +QPP difference_

Answer 63

When either:
1) The individual is no longer disabled
2) They reach age 65
3) They die
4) They begin CPP/QPP retirement pension

For QPP in addition the disability pensions stop being paid the month preceding the month in which a replacement indemnity becomes payable to the individual

Question 64

7.4 Explain how CPP/QPP disability amounts are determined

Answer 64

The CPP/QPP disability pension is equal to 75% of the contributor’s retirement pension plus a flat-rate amount. The flat-rate amount changes each year in accordance with the pension index. The CPP Post-Retirement Disability Benefit is equal to the flat-rate amount of the CPP disability pension.

For QPP contributors who become disabled after reaching age 60, an additional amount is added to the amount previously described. This is a second flat-rate amount.

Question 65

7.5 Define minor child under QPP

Answer 65

A minor child is
child of the contributor, either biological or adopted, who is under age 18.

In addition, a child who under age 18 and who is supported by a contributor for at least one year (with no other party providing support to the child) will also be eligible to receive a surviving child’s/orphan’s benefit.

Question 66

7.5 Describe the basic terms of the CPP/QPP disabled contributor’s child’s benefit.

Answer 66

The disabled contributor’s child’s benefit is a payment made on behalf of each child of an individual who has qualified for the CPP/QPP disability pension. The child must meet the definition of “dependent” applicable to CPP/QPP survivor’s benefits.

Question 67

Is the disabled contributor’s child benefit higher under CPP or QPP

Answer 67

Unlike other maximum benefit amounts, the disabled contributor’s child’s benefit
payable under CPP is significantly higher than that under QPP.

Question 68

8.1 Describe the basis for calculating the pension index

Answer 68

CPP and QPP have built-in provisions for keeping pensions up to date with the cost of living as defined by the Consumer Price Index (CPI).

The pension index is a factor that reflects the increase in CPI by comparing the average of CPI for the 12-month period ending each October 31 to the average of CPI in the 12-month period ending on the preceding October 31. This allows CPP
and QPP retirement pensions and some other benefits to stay in step with improvements in productivity and wage rates.

Reductions in CPI will not result in a decrease in CPP/QPP retirement pensions

Question 69

8.2 Explain how the pension index is applied to each of the CPP/QPP benefits. 5

Answer 69

1 adjusted each Jan by the positive pension index

2) Death benefits are a fixed dollar and not indexed

3) CPP/QPP disability pensions are adjusted each year using the pension index to determine the amount of the increase. In practice, the adjustment is the result of applying the pension index to the flat-rate component of the disability pension and the regular indexing of the CPP/QPP retirement pension that is used in the determination of the disability pension.

4) The CPP/QPP disabled contributor’s child’s benefit is adjusted each year using the pension index.

5) Both CPP and QPP survivor’s pensions are adjusted using the pension index in
the calculation.

Question 70

8.3 Indicate the tax treatment of CPP/QPP benefits

Answer 70

All CPP/QPP benefits are taxable to the recipient. In the case of a minor child where payments are made to the individual who supports the child, the benefit is taxable to the child. The death benefit is taxable to the estate of the deceased contributor.

Question 71

8.3 Indicate the tax treatment of CPP/QPP benefits and contributions. (ER & EE)

Answer 71

Employer contributions made to CPP/QPP are deductible from the employer’s taxable income and do not confer a taxable benefit on the employee. Employee contributions to CPP/QPP give rise to a tax credit to the employee.