Time to increase Canada Pension Plan benefits: poll
Worried that they won't have enough money to enjoy a comfortable retirement, Canadians are pushing for enhancements to the Canada Pension Plan, according to a new poll.
Almost eight in 10 respondents — 78% — said they support increasing CPP benefits. The idea was most popular among those currently earning between $30,000 and $60,000.
Just over 80% said they support increasing Old Age Security payments as well – no mention of just how to do that, of course.
“In terms of social policy, Canada is at a ‘Medicare moment’ not unlike 40 years ago, when as a country we decided that all Canadians deserve universal health care,” says Paul Moist, head of the Canadian Union of Public Employees. “This time, we have a golden opportunity to help this generation and the next retire with dignity.”
All of which suggests that pension reform will be an important issue in the next federal election as politicos roll out their proposed solutions for tackling Canadians' worries about their retirement prospects.
One answer is to increase employer and employee premiums on all earnings up to the CPP’s yearly limit, which is currently set at $47,200 and trims your pay cheque by just about 5% annually – twice that if you work for yourself.
The second option would be to increase that limit, which is currently the more popular choice as it targets middle-income Canadians who aren’t saving enough but wouldn’t break the backs of workers with lower incomes.
Any change to the CPP would require the support of seven provinces, representing more than two-thirds of the population. And there’s certainly no consensus out there.
Alberta, for instance, has voiced strong opposition to any boost in CPP contributions, labelling it another job-killing payroll tax on businesses.
Is it time to revamp the CPP? Would you favour a gradual boost in contribution levels? How much would be too much?
By Gordon Powers, MSN Money
Posted by: Me | Oct 20, 2021 1:42:38 PM
I fully support both methods HOWEVER, they should also increase substantially the CPP Disability benefits where if you are at the max, you earn a little over $1,200 per month. These people cannot work at all and most of the disabilities are debilitating, as is my own. Try living on $1,096 per month for housing, prescriptions, food. You won't be able to do it. I didn't ask to become sick.
So, they should revamp the benefits of CPP Disability as well. It hasn't changed in the last 10 to 15 years, at least. I will vote for the party who supports a re-vamping of benefits for CPP Disability and so will my many friends who are aware of my situation.
Posted by: Kev | Oct 20, 2021 1:55:27 PM
I think that cpp should be raised, just on the fact that a welfare recipient gets more money than the folks that built this country. With the cost of living the way it is I don't see how some of this people live, get a grip and start caring about our own people instead of paying for all these immigrants.
Posted by: Long Ago | Oct 20, 2021 2:09:03 PM
Another option is to not increase the CPP pension but reduce the Income Tax on the all Canadian Pensions. Example: CPP Pension taken prior to 65 is at normal tax rate. At 65 the max is 15% and a 70 drops to 10% and at 75 No Tax. The old age pension is the same except for the pre 65 of course since not applicable.
The pensions would be treated separate from other income a retiree may earn. Other income remains as normal, but gov. pensions are not taken into account for tax levels on those incomes.
There has to be a way to handle the issue through revised Income Tax Laws.
Also, any Canadian vacation property held prior to 60 and sold after 65 would not have capital gains tax applied if sold. If given prior to death or willed to a family member or members upon death then capital gains would apply if sold prior to them (Youngest if more than one member) reaching 65. If one member sells their portion to another member prior to reaching 65 then they pay capital gains based on their shares selling price to the other(s).
The more we can motivate people to save for retirement the less burden put on government pensions to support them on retirement.
In fact I really would like to see all Gov. Pensions (not government employee pensions) being Tax Free. Of course I am now retired.
Posted by: Albertan | Oct 20, 2021 7:01:57 PM
Raise CPP? CPP is not meant to be the sole retirement income of an individual, it is designed to be a supplement to ease retirement. If you think it should be raised how about instead you personally save that money for your retirement. That way it works out just as well for you.
The people that seem to primarily support this are people looking to get more benefit today (see the 3 above for perfect examples). How about instead we eliminate CPP and instead have individual required savings plans. That way you put your required 10% into a locked in plan and you know at the end of the day you will get that same 10% back out. Seems reasonable right? It would wreck the above people as they need people like myself to contribute more than I will likely ever personally withdraw so that they can get a benefit from drawing more than they ever contributed (interest aside).
Also Long Ago CPP already has a very favorable tax treatment. It is deductible for tax purpses when you pay in (during your earning years when you have a higher tax rate) and only taxable when you collect it (as a senior in your low income earning years). So this defers the tax on it and taxes it at a lower rate. I'm sure it sounds perfectly well to you to not tax seniors (especially on holiday property lol) however who instead pays extra tax because the government still has to provide the same services. Would you rather tax families more so you personally don't have to pay as much tax? Pretty greedy if you ask me. You do realize that seniors have a large bulk of the wealth held by Canadians and therefore losing them to the tax pool would greatly increase the burden on others.
Posted by: Steve | Oct 21, 2021 6:38:46 AM
The additional cost to employers is always a consideration so why not give the individual the option to contribute additional funds thru his payroll much like some companies have Canada Savings Plans with a weekly deduction.A form could easily be filled out to show what amount you would like to add to your weekly deduction and kept on file by the employer much like your tax form. Cpp could easily keep track of each individual since they already do that to determine your benefit at retirement.This way we still have minimum payout and those that can contribute more will benefit more.
Posted by: Karen | Oct 21, 2021 8:03:34 AM
Find a way to encourage and promote personal saving - reward good behavior! Let's not keep planning on the government, and future generations to take care of us exclusively. They won't be able to! We are self-employed, and it's hard enough to cover our own CPP; add in the costs for us everytime we hire someone - it's often prohibitive. There's nothing wrong with increasing the CPP yearly limit.
Posted by: Craig | Oct 21, 2021 8:51:01 AM
i completely agree that the limit should be increased, or removed altogether. maybe after $50000 it could be for health care? or education? or whatever? same with the EI contributions...
Posted by: Henry Lankhorst | Oct 21, 2021 10:23:02 AM
I agree with ALBERTAN. My parents told and taught me to save, which is what I do, so that when I come into retirement, I won't have to rely on others to live.As for ME(above), GET REAL. I didn't make you sick, where do you get off demanding more money from the taxpayer? Get your family to support you.
Posted by: Garry Gardeski | Oct 21, 2021 10:46:53 AM
its about time,we areliving in the 20th century ,and recieving 19th cectury wages.
Posted by: Chuck | Oct 21, 2021 11:05:12 AM
I have to agree with several other posters. Increasing CPP premiums doesn't address the core problem, which is people not saving for retirement.
Solutions that would resolve it without increasing taxes or premiums should be addressed first:
1) Encourage people to save. Stop taxing peoples interest on savings. The government would be better off to give a tax benefit of some kind to encourage saving above and beyond the RRSP cap...or simply remove the cap on RRSP's.
2) Reduce or eliminate taxes on CPP/Old age security payments. That translates to a direct increase in spendable income for the elderly without any change to premiums.
Posted by: Long Ago | Oct 21, 2021 11:25:37 AM
Albertan:
We earned and paid for it! You do the same. Just remember - one day you will be there.
Only deductible but we pay tax on it later. Maybe at a lower rate in most cases because many seniors now live below the poverty line. I hope you are planning well and can afford to put monies away - you will need a lot of it.
You also do not have another 8% to pay in your province so you should do well in saving for retirement. We should all move to Alberta -wouldn't that be scary for you.
Posted by: Long Ago | Oct 21, 2021 11:45:33 AM
Albertan: PS: by raising the CPP amount paid you get a larger deduction. You should get excited.
Posted by: Blaine Greening | Oct 21, 2021 12:11:29 PM
Some very interesting comments from all the above!! I believe that at this point in time even an increase in CPP premiums by the employee only ( NOT EMPLOYER ) would help in some way. The time is now here that seniors need more to live on than what they are getting. Its easy to say to you had the chance to save your money for retirement but we all now that everyone doesn't have the same opportunity to become as wealthy as others. Government MPS in mind. For the average working Canadian today many can hardly find money for the basics even though they still work hard for what they get. And with the low salaries they make maybe can't even max out their contributions let alone worring about increasing the yearly limit.Yes I think its time the feds step in and begin revising ways in which every Canadian citizen can live at least a half reasonable life after age 65. For those who have lots of money and don't really need it then maybe they can give it back to help build the pot!!!!!! One way the feds can start is by taking the pension money they are planning to pay out to Russell Williams at $60,000 per year ( $1.5 Million over 25 years ) and investing it. At least someone human may bebefit from the money.
Posted by: Larry | Oct 21, 2021 12:31:37 PM
Wake up all
If the cotributions I have contributed were managed by someone other than the Gov
there would be no issues about my retirement I would be living large
The government needs to be held accountable and tell us how much money they have siphoned off of CPP over the years ,it might suprise you ,the same for EI
I realize not all people are fortunate enough to have other saving's and good health but CPP was not
intended to be a social welfare program
The government should be required to establish reserves the same as you me and any other business
the reserves should be protected by law to eliminate access for reasos other than intended
It is time the elected took a 15% pay cut to show the people of Canada they deserve to be employed by the tax payers
Posted by: William Penrice | Oct 21, 2021 1:33:31 PM
Whats the difference if the Govt. raises pensions or not ????? They will make sure it puts the average pensioner in a totally different tax bracket.Then the TAXMAN will make sure that any increase in pensions will be returned to Govt. coffers via tax returns. Not to mention the fact that the Govt. system for figuring out the COLA will never reflect the truth....of what the real cost of living actually is. .............just one simple example....'THE COST OF 1 LB OF APPLES trippled in one year not to mention hundreds of other food items alone. [inflation 300%] Govt. will quote an inflation rate that will be next to nothing. AFTER ALL SAID." WHAT DO ALL OF US STUPID OLD PENSIONERS KNOW."
Posted by: Albertan | Oct 21, 2021 2:34:10 PM
Long Ago I have already concluded that I will never collect CPP & won't get near my EI benefits back either. My wife and I are in our mid to late 20's and are both professionals earning very solid salaries. Currently we try to save between $3,000 to $4,000 a month for retirement and I can reasonably expect this to continue and greatly increase for the next 35+ years so I am not concerned about my retirement (already my investments yield very solid incomes of their own). I accept that even though 2 years ago I was unemployed for 2 months I wasn't eligible for EI as I had already earned $70,000 that year and therefore any EI benefits would have been clawed back immediately at tax time so it wasn't even worth the paperwork.
So I my wife and I work hard each month and pay $60,000+ a year in taxes (I count EI and CPP in this as we aren't getting it back). Why am I not getting it back? In the next 35 years somebody is going to decide that because I worked hard and was smart with my money all my life that the forced CPP I paid the max rate into for over 40+ years for "my" retirement isn't going to be given to me because others need it more (see the people above who already want much more). This doesn't bug me that much.
What really upsets me is that people want to increase the cut-off of CPP above $45,000. Right now CPP is paid out based on how much over your life you paid in so the only people this change would help would be the few higher income earners that couldn't save (the rest of us having more than enough squirreled away for retirement).
Personally I think anybody foolish enough not to save anything for retirement should count themselves lucky CPP, OAS and COLA bail them out to any degree. CPP is not a retirement plan, it should at best be considered a suppliment that will cover one or two extra expenses you have in retirement. You reap what you sow. Also a failure to plan is a plan to fail.
Posted by: Albertan | Oct 21, 2021 2:43:43 PM
Also Long Ago what exactly have you earned and paid for? Talk about an unfounded sense of entitlement. If you truly need CPP as a retireee to survive that I really doubt you managed to shoulder your fair share of the tax load while you did work. This year (looking at the budget and census) the combined Canadian governments (federal, provincial & local) are spending about $15,000 per individual (man, woman & child) for services. Can you honestly say you have already paid the equivalent of that amount in tax for your entire life (80 years x 15,000 = 1,200,000) in todays dollar amounts? If not I suggest you get off your entitlement kick because otherwise those few of us that actually pay the bills in this country might decide to cut you off.
Posted by: laura | Oct 21, 2021 3:03:35 PM
I personally feel lthat women who have been at home with children and or only been able to work only part time should be able to receive more resources when they are able to retire.
I have worked mostly partime all my life and have very little coming my way when the time comes.
I also have a disablility and cannot receive any income at all because I have a husband who works.
Our total income is much less than 50,000 yearly. We are both in our fifties
. We have tried to save for our retirement but economics have cost us a lot of those savings.
We have both worked very hard to maintain a living for ourselves and our children.
Posted by: Mark | Oct 21, 2021 3:41:58 PM
We all need to take responsibility for ourselves and our retirements [yes those that cannot care for themselves should be taken care of]. Government is inefficient and cannot be relied on to take care of an entire population. Entitlements create zombies,zombies take from the productive until the productive leave. U.S. is a prime example of entitlement and the future unpaid liabilities of all these entitlements. Either work and save or party it up now and work until you die. Anyone posting here will have a resonable idea of what needs to be done to make it. I love my tax returns from RRSP contributions, they go straight into my TFSA. I have young family members that I know I will need to educate about finance because I feel pretty sure there will be no entitlements for them. I doubt I'll recieve any government benifits at 65, currently 40.
Posted by: Jeff | Oct 21, 2021 5:08:02 PM
In response to Albertan the simple fact is that apparently your income is much higher than the norm and certainly much higher than I earn (you both pay a lot more just in taxes than I earn in a year) so the savings goals that you presently have are not possible for the majority of people. Trying to suggest that what you are doing should be done by everyone is impossible. I would love to be able to put $3,000 to $4,000 per month aside for retirement (that amount currently exceeds my monthly take home income) but for the average person those goals are unreachable. So for the majority of us CPP is a valuable part of our retirement income. I personally think that increasing the limits on CPP is a viable option (not that it will benefit me) however I also agree that reducing taxes on this income would be of benefit to people as well. I am not saying no tax nor am I saying that all retirement income should be exempt from tax. This reduction could easily be accomplished by an exemption specific to CPP and/or OAS. Most people just receiving those two amounts pay little or no income tax so the extra cost would be minimal. It would also award people who saved for their retirement by allowing a bit more of it to be tax free on retirement, not a lot perhaps, but even an extra $50 per month can be helpful.