The Canada Pension Plan (CPP) is experiencing important changes that will affect how much contributors receive in retirement, how much they pay during their working years, and when they might reap the maximum benefit. Canadians who rely on CPP for part of their retirement income will want to take note, especially as expanded benefits begin to kick in and contribution limits change. Understanding these shifts early can help you maximize what you receive later in life.
With Canada’s aging population and increased life expectancy, the CPP is designed not just to sustain but to grow in value for workers who contribute over their careers. The most recent updates aim to strengthen the long-term sustainability of the pension plan while ensuring it continues to deliver meaningful value to retirees, survivors, and people with disabilities. Knowing what’s new—and what remains the same—can make a significant difference in your retirement planning.
Below, we cover what changed in 2024, who qualifies for CPP payouts, how much you might receive, and how to time your application to get the most from it.
Quick overview of the 2024 CPP changes
| Item | Details for 2024 |
|---|---|
| Maximum pensionable earnings | $68,500 (up from $66,600 in 2023) |
| Basic exemption amount | $3,500 (unchanged) |
| Employee/Employer contribution rate | 5.95% each (up slightly from prior years) |
| Self-employed contribution rate | 11.90% total |
| New additional CPP tier (CPP2) | Starts above $68,500, up to a new upper ceiling |
| Maximum monthly retirement benefit at age 65 | $1,364.60 (up from $1,306.57 in 2023) |
What changed this year
The most significant change in 2024 is the introduction of a second earnings ceiling under the CPP Enhancement program. This additional tier, known informally as CPP2, is part of efforts to increase future retirement benefits by requiring higher-income Canadians to contribute more on earnings above the traditional ceiling of $68,500 and up to a new limit: $73,200 for 2024.
This expansion is the next phase of a multi-year enhancement that began in 2019. The idea is simple: contribute more now, and you or your family will likely receive more later. If you’re a higher earner contributing over $68,500 annually, CPP2 contributions will now apply. Although this means contributing more today, your potential future benefit also increases.
Furthermore, the standard maximum monthly retirement payment rose to $1,364.60 in 2024, assuming you meet all contribution requirements. While few Canadians do qualify for the full amount, the increase is consistent with the plan to raise long-term payouts under the enhanced CPP structure.
Who qualifies and why it matters
To qualify for CPP retirement benefits, you must:
- Be at least 60 years old
- Have made at least one valid contribution to the CPP during your working life
“Valid” contributions mean any amount paid into the plan from employment (as an employee, employer, or self-employed), even if for a single year. However, the more years and higher earnings you report, the more your monthly benefit will be.
The enhanced CPP (including CPP2) especially benefits those who are earlier in their career, as they are more likely to contribute the higher amounts longer, resulting in higher retirement benefits. For those nearing retirement, the changes may result in a modest increase in contributions with minimal change in payout, unless retiring later.
“The expanded CPP contributions today are an investment in higher and more secure income tomorrow. It’s particularly beneficial for workers who began their careers after 2019.”
— Jane McCormick, Certified Financial Planner
How much could you get
CPP retirement benefits depend on several key factors:
- The number of years you’ve contributed
- Your employment income over those years
- The age at which you start receiving payments
In 2024, the maximum someone could receive monthly at age 65 is $1,364.60. Most Canadians, however, receive less—on average, about $758 as of last reported data. To receive the maximum, you must have contributed at or above the year’s maximum pensionable earnings for 39 or more years starting at age 18.
Delaying your CPP start date can increase your monthly benefit. Payments increase by 0.7% for every month you delay after age 65—up to a max of 42% more if you delay to age 70.
“Delaying CPP can boost your income significantly if you live longer. But you also need to balance that with your personal health and financial situation.”
— Jordan Laframboise, Retirement Income Specialist
Winners and losers from the 2024 changes
| Group | Impact in 2024 |
|---|---|
| Younger workers entering the workforce | Winner: Will benefit the most from enhanced CPP over lifetime |
| Higher income earners ($70,000+) | Loser (short-term): Pay more into CPP2—but higher potential benefit |
| Self-employed individuals | Loser: Must pay both employer and employee shares at new rates |
| Retirees aged 65+ already receiving CPP | Neutral: No change to existing benefits |
| Mid-career earners (40s–50s) | Mixed: Higher contributions, moderate impact on final payout |
How to apply step-by-step
Applying for CPP is relatively straightforward. Here are the steps:
- Check your CPP Statement of Contributions via your My Service Canada Account to see your contribution history.
- Decide when to start receiving benefits (between ages 60 and 70).
- Apply online through your Service Canada account or via paper form.
- Expect to receive your first payment about 1–2 months after application approval.
Note: If you delay applying beyond age 65, you must request retroactive payments (up to 12 months maximum). Payments are not automatic at age 65.
Tips to maximize your CPP benefits
- Work longer: More working years can raise your average earnings and final benefit.
- Delay retirement: Waiting until age 70 could increase your monthly CPP by up to 42%.
- Learn about the child-rearing provision: If you took time off for family, this can remove lower-earning years from your average.
- Consider pension sharing: If your spouse also receives CPP, pension sharing can reduce household tax burden.
Short FAQs about Canada Pension Plan in 2024
When should I apply for CPP to get the most money?
Delaying until age 70 gives the highest monthly payout, increasing your benefit by 0.7% per month after age 65.
Is CPP2 mandatory?
Yes, if you earn above the Year’s Maximum Pensionable Earnings ($68,500 in 2024), CPP2 is mandatory and automatically deducted.
Do self-employed people pay more?
Yes, self-employed individuals must contribute both the employer and employee portions—11.90% total.
What is the new maximum CPP monthly payment?
As of 2024, the maximum monthly retirement benefit at age 65 is $1,364.60.
Can I still receive CPP if I work after age 65?
Yes, and contributions are optional after age 65 if you’re still working. You may also qualify for the Post-Retirement Benefit, which increases your CPP later.
Will future CPP benefits be even higher?
Yes, due to ongoing CPP enhancements, younger contributors will see higher eventual benefits as long as they contribute consistently.
Related Posts
