Effect of CPP changes on those aged 60 to 69 who presently are collecting CPP Benefits and still working, as of January 1, 2012
Age 60 to 64:
Employers will have to begin deducting CPP contributions from employment income and remit accordingly to CRA along with their matching contributions. This is mandatory for people in this age group.
Self-employed people will fill out Schedule 8 on their tax return commencing for the 2012 personal tax year to calculate the CPP due (both employer and employee portions) on their self-employed earnings. This is also mandatory.
Age 65 to 69:
Making CPP contributions in this age group is optional; however, the default is to opt-in. In order to opt out of having to contribute, an employee must fill out form CPT30, give a copy to the employer and send a copy to CRA at the following address:
Winnipeg Tax Centre
Specialty Services Section
66 Stapon Road
Winnipeg MB R3C 3M2
If the employee continues to make contributions, the employer will have to continue with the matching contributions.
The election to opt out becomes effective the month following receipt of Form CPT30 by the employer.
Contributions for this group are optional as well, and will be calculated on Schedule 8, as above. Schedule 8 will be used, starting with the 2012 tax return in the tax filing season of April 2013, to elect out.
In All Cases:
These new contributions to CPP starting in 2012, made by people still working but already collecting CPP benefits under the “old system”, will go into a new Post-Retirement Benefit (PRB) fund. After the first year of contributions under the “new system”, an extra, separate monthly benefit will be paid, as per a formula, which will be in addition to the amount presently received under the old system. Each extra year of such new contributions into the future similarly will result in an increase to the separate benefit paid out commencing in the year following.