Prior to 2012, individuals who were receiving the CPP retirement benefit and later returned to work could no longer contribute to the CPP plan, regardless of their age.
Starting in 2012 and to reflect Canadians are working longer, the “Post-Retirement Benefit” (PRB) was introduced. Contributions to the new PRB will produce a lifetime benefit that is separate from CPP retirement benefits and will be payable the year following the year you make contributions. The amount of PRB will be based on your age, level of earnings and the amount of contributions made during the previous year. If you would like to get a rough estimate of how PRB contributions will impact your future retirement benefit payments the government of Canada has developed a PRB calculator on the Service Canada website.
Effective January 1, 2012 individuals between 60 and 64 who are working and receiving a CPP retirement benefit must now make mandatory contributions to the plan, with matching contributions from the employer.
Individuals age 65 but under 70 who are earning income and CPP retirement pension can either choose to make CPP contributions, resulting in a PRB, or opt out of making these contributions by way of an election. If an individual chooses to make the contributions, their employer must contribute their share also.
Individuals can elect to stop paying CPP premiums anytime after they turn age 65 by completing Form CPT30 – Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election and giving a copy of the election form to their current employer and filing the original form with the Canada Revenue Agency (CRA). The election to stop contributing to the CPP takes effect on the first day of the month following the date the completed form is provided to the employer. It is important to note that once an election is made, either to opt out of paying CPP premiums or to revoke a previous election, you cannot make another election until the next calendar year.
Click here to view Form CPT30