Canada Pension Plan
Canada Pension Plan
Canada Pension Plan or (CPP) which came into effect in 1966 is a contributory, earning related social insurance program that transfers earnings from employees to the retired. It provides with a firm and reliable pension that can be built upon for retirement. It also in case of the death or disability provides the employees and his dependent with the basic financial protection.
The Canada Pension Plan (CPP) program has made it mandatory for all the Canadians who are currently employed and at least 18 years of age to contribute to a nationally administered pension plan an agreed part of their wages. There are several fixed rules which govern the amount to be received by an individual upon retirement or disability. These are based on the person’s age and the contribution that he can make to the Canada Pension Plan while working. Except for the area of Quebec that operates on the Quebec Pension Plan, the Canada Pension Plan (CPP) is administered in the entire province and the territories of Canada on behalf of the employees by Social Development Canada and Human Resources. Changes to Canada Pension Plan can only to made on the approval of no less than two-third of the Canadian province in lieu of a minimum of two-third of the country's population. An employer also contributes the same amount to the Canada Pension Plan which he deducts from the employee’s payment.
Since Canada Pension Plan benefits are considered taxable income, there are many households which come forward to share their income in order to reduce their taxes.
