An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act (S.C. 2016, c. 14)
Full Document:
Assented to 2016-12-15
PART 1Amendments to the Canada Pension Plan and the Canada Pension Plan Investment Board Act (continued)
R.S., c. C-8Canada Pension Plan (continued)
Marginal note:R.S., c. 30 (2nd Supp.), s. 21
29 Section 54 of the Act is replaced by the following:
Marginal note:First additional unadjusted pensionable earnings for a year
53.1 (1) Subject to section 54.1, for 2019 and each subsequent year, the first additional unadjusted pensionable earnings of a contributor for a year are an amount equal to the least of
(a) the aggregate of
(i) their contributory salary and wages for the year, and
(ii) their contributory self-employed earnings for the year in the case of an individual described in section 10,
(b) the aggregate of
(i) their earnings on which a first additional contribution has been made for the year calculated as the aggregate of
(A) their salary and wages on which a first additional contribution has been made for the year, and
(B) the amount of any first additional contribution required to be made by the contributor for the year in respect of the contributor’s self-employed earnings divided by the first additional contribution rate for self-employed persons for the year, and
(ii) their basic exemption for the year, and
(c) their maximum pensionable earnings for the year.
However, if the amount calculated as provided in paragraph (a) is equal to or less than the amount of their basic exemption for the year, their first additional unadjusted pensionable earnings for that year are deemed to be zero.
Marginal note:Year in which retirement pension becomes payable
(2) For the purposes of subsection (1), for the year in which a retirement pension becomes payable under this Act,
(a) the contributor’s basic exemption is equal to that proportion of the amount of the Year’s Basic Exemption that the number of months in the year that are before the retirement pension becomes payable is of 12; and
(b) the contributor’s maximum pensionable earnings is equal to that proportion of the amount of the Year’s Maximum Pensionable Earnings that the number of months in the year that are before the retirement pension becomes payable is of 12.
Marginal note:Second additional unadjusted pensionable earnings for year
53.2 (1) Subject to section 54.2, for 2024 and each subsequent year, the second additional unadjusted pensionable earnings of a contributor for a year are an amount equal to the least of
(a) the aggregate of
(i) the amount by which their contributory salary and wages for the year — not exceeding the contributor’s additional maximum pensionable earnings — exceeds the contributor’s maximum pensionable earnings,
(ii) in the case of an individual described in section 10, the amount by which their contributory self-employed earnings for the year — not exceeding the contributor’s additional maximum pensionable earnings — exceeds the contributor’s maximum pensionable earnings,
(b) their earnings on which a second additional contribution has been made for the year calculated as the aggregate of
(i) their salary and wages on which a second additional contribution has been made for the year, and
(ii) the amount of any second additional contribution required to be made by the contributor for the year in respect of the contributor’s self-employed earnings divided by the second additional contribution rate for self-employed persons for the year, and
(c) the difference between the contributor’s additional maximum pensionable earnings and the contributor’s maximum pensionable earnings.
Marginal note:Year in which retirement pension becomes payable
(2) For the purposes of subsection (1), for the year in which a retirement pension becomes payable under this Act,
(a) the contributor’s maximum pensionable earnings is equal to that proportion of the amount of the Year’s Maximum Pensionable Earnings that the number of months in the year that are before the retirement pension becomes payable is of 12; and
(b) the contributor’s additional maximum pensionable earnings is equal to that proportion of the amount of the Year’s Additional Maximum Pensionable Earnings that the number of months in the year that are before the retirement pension becomes payable is of 12.
Marginal note:Base unadjusted pensionable earnings for years of division
54 The amount of the base unadjusted pensionable earnings of a contributor for a year determined under section 53 is to be adjusted for each year in which there is a division of unadjusted pensionable earnings under section 55 or 55.1 and under a provincial pension plan.
Marginal note:First additional unadjusted pensionable earnings for years of division
54.1 The amount of the first additional unadjusted pensionable earnings of a contributor for a year determined under section 53.1 is to be adjusted for each year in which there is a division of those earnings under section 55.1.
Marginal note:Second additional unadjusted pensionable earnings for years of division
54.2 The amount of the second additional unadjusted pensionable earnings of a contributor for a year determined under section 53.2 is to be adjusted for each year in which there is a division of those earnings under section 55.1.
Marginal note:R.S., c. 30 (2nd Supp.), s. 23; 2000, c. 12, ss. 48(2) and (3)
30 (1) Subsections 55.2(5) to (7) of the Act are replaced by the following:
Marginal note:Division of base unadjusted pensionable earnings
(5) If there is a division under section 55.1, the base unadjusted pensionable earnings for each person subject to the division for the period of cohabitation attributable to base contributions made under this Act, determined in the same manner as the total pensionable earnings of a contributor attributable to base contributions made under this Act are determined in section 78, are to be added and then divided equally, and the base unadjusted pensionable earnings so divided are to be attributed to each person.
Marginal note:Division of first additional unadjusted pensionable earnings
(5.1) If there is a division of first additional unadjusted pensionable earnings under section 55.1, those earnings for each person subject to the division for the period of cohabitation are to be added and then divided equally, and the first additional unadjusted pensionable earnings so divided are to be attributed to each person.
Marginal note:Division of second additional unadjusted pensionable earnings
(5.2) If there is a division of second additional unadjusted pensionable earnings under section 55.1, those earnings for each person subject to the division for the period of cohabitation are to be added and then divided equally, and the second additional unadjusted pensionable earnings so divided are to be attributed to each person.
Marginal note:Effect of division of base unadjusted pensionable earnings
(6) If there is a division of base unadjusted pensionable earnings under section 55.1 and under a provincial pension plan, for the purposes of benefit calculation and payment under this Act, the total unadjusted pensionable earnings of a contributor for a year of division are the aggregate of their base unadjusted pensionable earnings attributed under subsection (5) and their unadjusted pensionable earnings attributed under a provincial pension plan.
Marginal note:Provincial pension plans
(7) No division of base unadjusted pensionable earnings under section 55.1 is to be made for any month during which the persons subject to the division cohabited and for which either of them contributed to a provincial pension plan (and, for the purposes of this subsection, months during which the persons cohabited are to be determined in the prescribed manner), unless the unadjusted pensionable earnings attributed to the persons under the provincial pension plan are divided for that month in a manner substantially similar to that described in this section and section 55.1.
Marginal note:2000, c. 12, s. 48(3)
(2) The portion of subsection 55.2(8) of the Act before paragraph (b) is replaced by the following:
Marginal note:No division
(8) No division of base unadjusted pensionable earnings under section 55.1 for a period of cohabitation of the persons subject to the division is to be made
(a) for a year in which the total base unadjusted pensionable earnings of the persons do not exceed twice the Year’s Basic Exemption;
(3) Section 55.2 of the Act is amended by adding the following after subsection (8):
Marginal note:No division of first additional unadjusted pensionable earnings
(8.1) No division of first additional unadjusted pensionable earnings under section 55.1 for a period of cohabitation of the persons subject to the division is to be made
(a) for a year in which the total first additional unadjusted pensionable earnings of the persons do not exceed twice the Year’s Basic Exemption;
(b) for the period before which one of the persons reached 18 years of age or after which one of the persons reached 70 years of age; and
(c) for the period in which one of the persons was a beneficiary of a retirement pension under this Act.
Marginal note:No division of second additional unadjusted pensionable earnings
(8.2) No division of second additional unadjusted pensionable earnings under section 55.1 for a period of cohabitation of the persons subject to the division is to be made
(a) for the period before which one of the persons reached 18 years of age or after which one of the persons reached 70 years of age; and
(b) for the period in which one of the persons was a beneficiary of a retirement pension under this Act.
Marginal note:R.S., c. 30 (2nd Supp.), s. 24(1)
31 (1) Paragraph 56(1)(b) of the Act is replaced by the following:
(b) 75% of the amount of the contributor’s retirement pension, which amount is calculated as the aggregate of
(i) the amount calculated as provided in subsection (3),
(ii) the amount calculated as provided in subsection (3.1), and
(iii) the amount calculated as provided in subsection (3.2).
Marginal note:R.S., c. 30 (2nd Supp.), s. 24(1)
(2) Subsection 56(3) of the Act is replaced by the following:
Marginal note:Calculation for purpose of subparagraph (1)(b)(i)
(3) The amount of the portion of the contributor’s retirement pension that is to be used for the purpose of subparagraph (1)(b)(i) is equal to 25% of their average monthly pensionable earnings calculated as provided in subsections (4) and (5).
Marginal note:Calculation for purpose of subparagraph (1)(b)(ii)
(3.1) The amount of the portion of the contributor’s retirement pension that is to be used for the purpose of subparagraph (1)(b)(ii) is equal to 8.33% of their first additional monthly pensionable earnings calculated as provided in subsection (4.01).
Marginal note:Calculation for purpose of subparagraph (1)(b)(iii)
(3.2) The amount of the portion of the contributor’s retirement pension that is to be used for the purpose of subparagraph (1)(b)(iii) is equal to 33.33% of the contributor’s second additional monthly pensionable earnings calculated as provided in subsection (4.02).
(3) Section 56 of the Act is amended by adding the following after subsection (4):
Marginal note:First additional monthly pensionable earnings
(4.01) For the purpose of subsection (3.1), a contributor’s first additional monthly pensionable earnings are an amount calculated by
(a) in the case where their first additional contributory period is less than or equal to 480 months, dividing their total first additional pensionable earnings by 480; or
(b) in the case where their first additional contributory period exceeds 480 months, dividing the aggregate of their 480 highest first additional pensionable earnings for a month by 480.
Marginal note:Second additional monthly pensionable earnings
(4.02) For the purpose of subsection (3.2), a contributor’s second additional monthly pensionable earnings are an amount calculated by
(a) in the case where their second additional contributory period is less than or equal to 480 months, dividing their total second additional pensionable earnings by 480; or
(b) in the case where their second additional contributory period exceeds 480 months, dividing the aggregate of their 480 highest second additional pensionable earnings for a month by 480.
Marginal note:R.S., c. 30 (2nd Supp.), s. 24(1)
(4) Paragraph 56(5)(d) of the Act is replaced by the following:
(d) in relation to any benefits payable under this Act for any month after December, 1977, any month for which the contributor was a family allowance recipient in a year for which the contributor’s base unadjusted pensionable earnings were equal to or less than the contributor’s basic exemption for the year.
Marginal note:1991, c. 44, s. 10
(5) The portion of subsection 56(6) of the Act before paragraph (a) is replaced by the following:
Marginal note:If division of unadjusted pensionable earnings occurs
(6) The amount of the portion of the contributor’s retirement pension that is to be used for the purpose of subparagraph (1)(b)(i), in the case of a contributor in respect of whom a division of unadjusted pensionable earnings takes place either before or after the commencement of the disability pension, if the division reduces the disability pension otherwise payable, is to be calculated by dividing
Marginal note:R.S., c. 30 (2nd Supp.), s. 24(1)
(6) The portion of subparagraph 56(6)(a)(i) of the Act before clause (A) is replaced by the following:
(i) the amount of the portion of the contributor’s retirement pension, which amount is calculated in accordance with subsections (3), (4), (4.1) and (5) before the division, multiplied by the aggregate of
Marginal note:R.S., c. 30 (2nd Supp.), s. 24(1)
(7) Subparagraph 56(6)(a)(ii) of the Act is replaced by the following:
(ii) the amount of the portion of the contributor’s retirement pension, which amount is calculated in accordance with subsections (3), (4), (4.1) and (5) following the division, multiplied by the number of months in the contributor’s contributory period calculated in accordance with subsection (5)
32 (1) Subparagraph 58(1)(a)(ii) of the Act is replaced by the following:
(ii) 37.5% of the amount of the contributor’s retirement pension, which amount is calculated as the aggregate of
(A) the amount calculated as provided in subsection (3),
(B) the amount calculated as provided in subsection (3.1), and
(C) the amount calculated as provided in subsection (3.4),
Marginal note:R.S., c. 30 (2nd Supp.), s. 26(2); 2000, c. 12, par. 64(b)
(2) Paragraph 58(1)(b) of the Act is replaced by the following:
(b) in the case of a survivor who has reached 65 years of age and to whom no retirement pension is payable under this Act or a provincial pension plan, a basic monthly amount equal to 60% of the amount of the contributor’s retirement pension, which amount is calculated as the aggregate of
(i) the amount calculated as provided in subsection (3),
(ii) the amount calculated as provided in subsection (3.1), and
(iii) the amount calculated as provided in subsection (3.4).
Marginal note:1997, c. 40, s. 76(1); 2000, c. 12, par. 64(c)
(3) Subparagraphs 58(2)(a)(i) and (ii) of the Act are replaced by the following:
(i) the aggregate of
(A) a flat rate benefit, calculated as provided in subsection (1.1), and
(B) the lesser of
(I) the amount determined by the formula
C – D
where
- C
- is 37.5% of the amount of the portion of the contributor’s retirement pension, which amount is calculated as provided in subsection (3), and
- D
- is the lesser of
(1) 40% of C, and
(2) 40% of the amount of the portion of the survivor’s retirement pension, which amount is calculated as provided in paragraph 46(1)(a), without regard to subsections 46(3) to (6), and adjusted in accordance with subsection 45(2), and
(II) an amount that, when added to the amount of the portion of the survivor’s retirement pension that is calculated as provided in paragraph 46(1)(a), without regard to subsections 46(3) to (6), and adjusted in accordance with subsection 45(2), is equal to the amount of a benefit of 25% of 1/12 of the survivor’s Maximum Pensionable Earnings Average for the later of the year in which the survivor first became qualified to receive the survivor’s pension and the year in which the survivor’s retirement pension commenced to be payable, adjusted in accordance with subsection 45(2) as if the benefit had commenced to be payable in the later of the year in which the survivor first became qualified to receive the survivor’s pension and the year in which the survivor’s retirement pension commenced to be payable,
(ii) the amount determined by the formula
C – D
where
- C
- is 37.5% of the amount of the portion of the contributor’s retirement pension, which amount is calculated as provided in subsection (3.1), and
- D
- is the lesser of
(1) 40% of C, and
(2) 40% of the amount of the portion of the survivor’s retirement pension, which amount is calculated as provided in paragraph 46(1)(b), without regard to subsections 46(3.1) to (6), and adjusted in accordance with subsection 45(2), and
(iii) the amount determined by the formula
C – D
where
- C
- is 37.5% of the amount of the portion of the contributor’s retirement pension, which amount is calculated as provided in subsection (3.4), and
- D
- is the lesser of
(1) 40% of C, and
(2) 40% of the amount of the portion of the survivor’s retirement pension, which amount is calculated as provided in paragraph 46(1)(c), without regard to subsections 46(3.1) to (6) and adjusted in accordance with subsection 45(2);
Marginal note:1997, c. 40, s. 76(1); 2000, c. 12, par. 64(c)
(4) Paragraphs 58(2)(c) and (d) of the Act are replaced by the following:
(c) in the case of a survivor who has reached 65 years of age and who was born after December 31, 1932 and whose retirement pension commences to be payable after December 31, 1997, the aggregate of
(i) the lesser of
(A) the amount determined by the formula
A – B
where
- A
- is 60% of the amount of the portion of the contributor’s retirement pension, which amount is calculated as provided in subsection (3), and
- B
- is the lesser of
(I) 40% of A, and
(II) 40% of the amount of the portion of the survivor’s retirement pension, which amount is calculated as provided in paragraph 46(1)(a), without regard to subsections 46(3) to (6), and adjusted in accordance with subsection 45(2), and
(B) an amount that, when added to the amount of the portion of the survivor’s retirement pension that is calculated as provided in paragraph 46(1)(a), without regard to subsections 46(3) to (6), and adjusted in accordance with subsection 45(2), is equal to the amount of a benefit of 25% of 1/12 of the survivor’s Maximum Pensionable Earnings Average for the later of the year in which the survivor first became qualified to receive the survivor’s pension and the year in which the survivor’s retirement pension commenced to be payable, adjusted in accordance with subsection 45(2) as if the benefit had commenced to be payable in the later of the year in which the survivor first became qualified to receive the survivor’s pension and the year in which the survivor’s retirement pension commenced to be payable,
(ii) the amount determined by the formula
A – B
where
- A
- is 60% of the amount of the portion of the contributor’s retirement pension, which amount is calculated as provided in subsection (3.1), and
- B
- is the lesser of
(I) 40% of A, and
(II) 40% of the amount of the portion of the survivor’s retirement pension, which amount is calculated as provided in paragraph 46(1)(b), without regard to subsections 46(3.1) to (6), and adjusted in accordance with subsection 45(2), and
(iii) the amount determined by the formula
A – B
where
- A
- is 60% of the amount of the portion of the contributor’s retirement pension, which amount is calculated as provided in subsection (3.4), and
- B
- is the lesser of
(I) 40% of A, and
(II) 40% of the amount of the portion of the survivor’s retirement pension, which amount is calculated as provided in paragraph 46(1)(c), without regard to subsections 46(3.1) to (6), and adjusted in accordance with subsection 45(2);
or
(d) in any other case, the aggregate of
(i) the lesser of
(A) 60% of the amount of the portion of the contributor’s retirement pension, which amount is calculated as provided in subsection (3), and
(B) an amount that, when added to the amount of the portion of the survivor’s retirement pension that is calculated as provided in paragraph 46(1)(a), without regard to subsections 46(3) to (6), and adjusted in accordance with subsection 45(2), is equal to the amount of a benefit of 25% of 1/12 of the average of the Year’s Maximum Pensionable Earnings for the later of the year in which the survivor first became qualified to receive the survivor’s pension and the year in which the survivor’s retirement pension commenced to be payable, and for each of the two preceding years, adjusted in accordance with subsection 45(2) as if the benefit had commenced to be payable in the later of the year in which the survivor first became qualified to receive the survivor’s pension and the year in which the survivor’s retirement pension commenced to be payable,
(ii) 60% of the amount of the portion of the contributor’s retirement pension, which amount is calculated as provided in subsection (3.1), and
(iii) 60% of the amount of the portion of the contributor’s retirement pension, which amount is calculated as provided in subsection (3.4).
Marginal note:1991, c. 44, s. 12(3)
(5) The portion of subsection 58(3) of the Act before paragraph (a) is replaced by the following:
Marginal note:Calculation of portion of contributor’s retirement pension
(3) The amount of the portion of the contributor’s retirement pension that is to be used for the purposes of subsections (1) and (2) is an amount calculated as provided in paragraph 57(2)(a), (b) or (c), multiplied, for the purpose of calculating the monthly amount of the survivor’s pension for months commencing with the month in which
(6) Section 58 of the Act is amended by adding the following after subsection (3):
Marginal note:Calculation of portion of contributor’s retirement pension
(3.1) The amount of the portion of the contributor’s retirement pension that is to be used for the purposes of subsections (1) and (2) is an amount calculated as provided in subsection (3.2), multiplied, for the purpose of calculating the monthly amount of the survivor’s pension for months commencing with the month in which one of the events described in paragraphs 3(a) to (e) has occurred, by the ratio that the Pension Index for the year that includes that month bears to the Pension Index for the year in which the contributor died.
Marginal note:Calculation for purpose of subsection (3.1)
(3.2) The amount to be calculated for the purpose of subsection (3.1) is equal to
(a) if a retirement pension was not payable for the month in which the contributor died, an amount equal to 8.33% of their first additional monthly pensionable earnings, or
(b) if a retirement pension was payable for the month in which the contributor died, an amount equal to the product obtained by multiplying
(i) an amount equal to 8.33% of their first additional monthly pensionable earnings,
by
(ii) the ratio that the Pension Index for the year that includes that month bears to the Pension Index for the year in which the retirement pension first became payable.
Marginal note:Calculation of first additional monthly pensionable earnings
(3.3) For the purpose of subsection (3.2), the first additional monthly pensionable earnings of a contributor are an amount calculated as provided in section 48.1, and
(a) in the case of a contributor to whom a retirement pension was payable for the month in which they died, section 51 applies; or
(b) in the case of a contributor to whom no retirement pension was payable for the month in which they died, section 51 applies but the reference in that section to the year in which a benefit becomes payable to the contributor is to be read as a reference to the year in which the contributor died.
Marginal note:Calculation of portion of contributor’s retirement pension
(3.4) The amount of the portion of the contributor’s retirement pension that is to be used for the purposes of subsections (1) and (2) is an amount calculated as provided in subsection (3.5), multiplied, for the purpose of calculating the monthly amount of the survivor’s pension for months commencing with the month in which one of the events described in paragraphs 3(a) to (e) has occurred, by the ratio that the Pension Index for the year that includes that month bears to the Pension Index for the year in which the contributor died.
Marginal note:Calculation for purpose of subsection (3.4)
(3.5) The amount that is to be calculated for the purpose of subsection (3.4) is equal to
(a) if a retirement pension was not payable for the month in which the contributor died, an amount equal to 33.33% of their second additional monthly pensionable earnings, or
(b) if a retirement pension was payable for the month in which the contributor died, an amount equal to the product obtained by multiplying
(i) an amount equal to 33.33% of their second additional monthly pensionable earnings,
by
(ii) the ratio that the Pension Index for the year that includes that month bears to the Pension Index for the year in which the retirement pension first became payable.
Marginal note:Calculation of second additional monthly pensionable earnings
(3.6) For the purpose of subsection (3.5), the second additional monthly pensionable earnings of a contributor are an amount calculated as provided in section 48.2, and
(a) in the case of a contributor to whom a retirement pension was payable for the month in which they died, section 51 applies; or
(b) in the case of a contributor to whom no retirement pension was payable for the month in which they died, section 51 applies but the reference in that section to the year in which a benefit becomes payable to the contributor is to be read as a reference to the year in which the contributor died.
Marginal note:1997, c. 40, s. 76(2); 2000, c. 12, par. 64(d)
(7) Paragraphs 58(6)(a) and (b) of the Act are replaced by the following:
(a) the aggregate of
(i) the greater of
(A) the flat rate benefit payable under subparagraph (1)(a)(i), and
(B) the flat rate benefit payable under paragraph 56(1)(a), and
(ii) the lesser of
(A) the aggregate of
(I) the greater of
1 the amount that would have been payable under subparagraph (1)(a)(ii) if the amounts referred to in clauses (1)(a)(ii)(B) and (C) had not been included in the calculation made under that subparagraph, and
2 the amount that would have been payable under paragraph 56(1)(b) if the amounts referred to in subparagraphs 56(1)(b)(ii) and (iii) had not been included in the calculation made under that paragraph, and
(II) 60% of the lesser of the amount described in sub-subclause (I)(1) and the amount described in sub-subclause (I)(2), and
(B) 75% of the amount of a benefit of 25% of 1/12 of the survivor’s Maximum Pensionable Earnings Average for the later of the year in which the survivor first became qualified to receive the survivor’s pension and the year in which the survivor’s disability pension commenced to be payable, adjusted in accordance with subsection 45(2) as if the benefit had commenced to be payable in the later of the year in which the survivor first became qualified to receive the survivor’s pension and the year in which the survivor’s disability pension commenced to be payable,
(b) the aggregate of
(i) the greater of
(A) the amount that would have been payable under subparagraph (1)(a)(ii) if the amounts referred to in clauses (1)(a)(ii)(A) and (C) had not been included in the calculation made under that subparagraph, and
(B) the amount that would have been payable under paragraph 56(1)(b) if the amounts referred to in subparagraphs 56(1)(b)(i) and (iii) had not been included in the calculation made under that paragraph, and
(ii) 60% of the lesser of the amount described in subclause (A) and the amount described in subclause (B), and
(c) the aggregate of
(i) the greater of
(A) the amount that would have been payable under subparagraph (1)(a)(ii) if the amounts referred to in clauses (1)(a)(ii)(A) and (B) had not been included in the calculation made under that subparagraph, and
(B) the amount that would have been payable under paragraph 56(1)(b) if the amounts referred to in subparagraphs 56(1)(b)(i) and (ii) had not been included in the calculation made under that paragraph, and
(ii) 60% of the lesser of the amount described in subclause (A) and the amount described in subclause (B).
(8) Subsection 58(8) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) 37.5% of the amount of the contributor’s retirement pension, which amount is calculated as the aggregate of
(i) the amount calculated as provided in subsection (3.1), and
(ii) the amount calculated as provided in subsection (3.4).
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