The Canada Pension Plan (CPP) is part of Canada’s retirement income system. Anyone that is is 18 or older and employed must contribute to the CPP. The contribution calculation is based on the employee’s income. This plan applies to all provinces and territories except Quebec, which operates it’s own similar plan, the Quebec Pension Plan (QPP).
The Canada Pension Plan is a monthly benefit designed to replace 25% of your earnings. To begin collecting under the CPP you must be 65, or you can begin as early as 60 if you either stop working in the month before your CPP begins or make less than the monthly maximum Canada Pension Plan retirement pension payment in both the month before and the month of your first CPP payment. However, by starting to receive your payment at 60, your CPP payment will be 30% lower than if you wait until 65. The other side of that is you can delay your payment under the Canada Pension Plan until 70 an your payment would be 30% more than what you would have received at 65.
There are two other forms of CPP payment, the disability payment and survivor payment. The disability payment can come into effect if a disability leaves you unable to work at any job regularly. The survivor payments include a one-time payment to the estate of the contributor, as well as monthly payments to the spouse, or common-law partner, and to dependent children.