How pensions are changing going into 2021
For most Montrealers, seeing 2021 on the calendar could not have come soon enough. As we dust ourselves off from the aftermath of the past year, older readers can take a moment and familiarize themselves with their coming or current fixed government pensions. Here are the amounts qualifying individuals can expect for the coming year as well as the payment dates:
This year, recipients of the Quebec Pension Plan (retirement, disability, orphan's, surviving spouse's pensions) who have signed up for direct deposits can expect to generally receive their payments on the last working day of each month. Specifically, in 2021, these dates will be Jan. 29, Feb. 26, March 31, April 30, May 31, June 30, July 30, Aug. 31, Sept. 30, Oct. 29, Nov. 30 and Dec. 30.
The maximum monthly amounts for those applying for QPP benefits beginning in 2021 will be $1,208.26 for those 65 years of age, $773.29 for those 60 years of age (64 per cent of the maximum QPP pension at age 65) or $1,715.73 for those 70 years of age (142 per cent of the maximum QPP pension at age 65). For those who began receiving QPP prior to 2021, the inflation-adjusted amount may not be equal to the maximum listed above due to how indexing is calculated. Also, not everyone is entitled to the maximum QPP benefit.
Retraite Québec (retraitequebec. gouv.qc.ca) has an online calculator for those who wish to estimate what their maximum QPP benefits might be if they were to apply now.
The maximum monthly surviving spouse's pension for those between ages 45 and 64 will be $958.40. Those aged 65 or over can receive up to $714.78 per month. If you are already getting a retirement pension, you will be paid a combined pension subject to a maximum amount, which may not be equal to the sum of both the survivor's pension and the retirement pension. So the amount of your surviving spouse's pension could be reduced.
It should be noted QPP benefits are taxable. Quebec residents who would like more information about these benefits can call Retraite Québec at 514-873-2433 or can apply for the benefits online.
For those who receive pension benefits under the federal Old Age Security program, those payments can be automatically deposited into bank accounts typically on the third-from-last banking day of the month. Specifically, in 2021, these dates will be Jan. 27, Feb. 24, March 29, April 28, May 27, June 28, July 28, Aug. 27, Sept. 28, Oct. 27, Nov. 26 and Dec. 22.
The OAS pension is a monthly benefit available, if applied for, to most Canadians 65 years of age or older who meet certain legal status and residence requirements. Individuals are allowed to postpone receiving their OAS payments for up to five years. Those who take their OAS at a later time will receive a higher OAS payment.
To qualify for an Old Age Security pension, in addition to being age 65 or older, they must also be a Canadian citizen or legal resident of Canada on the day preceding the application's approval or, if no longer living in Canada, must have been a Canadian or legal resident of Canada on the day preceding the day he or she stopped living in Canada. Furthermore, if they are a resident of Canada at the time of application, they must have lived in Canada for at least 10 years after turning age 18. For OAS applicants living outside of Canada, they must have lived in Canada for at least 20 years after turning age 18.
If one is not covered by either of these two scenarios they may still qualify for some type of pension, since Canada has social security agreements with many countries. For more information on OAS you can call Service Canada at 1-800277-9914 or consult the government of Canada website, canada.ca.
The maximum OAS monthly benefit payment for the first quarter in 2021 will be $615.37. OAS pension payment rates are reviewed and adjusted, if necessary, in January, April, July and October to reflect any increases in the cost of living as reflected by the Consumer Price Index.
Those with individual net income exceeding $79,054 in 2020 may have to repay part or all of the OAS pension at the time they file their 2020 tax return. If the pensioner's income exceeded $128,149 in 2020, they will have to repay all of the OAS benefits received in 2020. This is commonly referred to as the “claw back” or as the OAS “pension recovery tax.” In the following tax year, the OAS payments will be reduced by the same amount as the OAS claw back from the previous year. OAS benefits are also taxable. Information on federal taxation can be obtained by calling the Canada Revenue Agency at 1-800-959-8281.
Your government pension amounts may vary from the numbers above depending on your own set of circumstances and when you began receiving your pensions. For questions regarding your own situation, contact the relevant government offices as indicated above or consult their websites.