Child rearing drop out – parents can get more out of CPP
Do you have children born after December 31, 1958? If so, you may qualify to increase your Canada Pension Plan benefit through the child rearing drop-out provision.
The Canada Pension Plan (CPP) provides basic benefits to contributors who retire or become disabled; when you die, benefits may be provided to your spouse or common-law partner and dependent children. Your benefit is determined primarily by how long and how much you have contributed to the Plan. Thus, if you leave the workforce for a period of time, this is likely to lower your benefit in the future.
Caring for children
One of the reasons you might leave the workforce if to stay at home a take care of children. The CPP takes this into consideration if you apply for a program call the Child Rearing Drop out provision (CRDO).
If your earnings either stopped or were lower because you were raising your children under the age of seven, you can ask the CPP to exclude that period of time from the calculation of your benefit.
To make sure that these periods of low earnings do not reduce your pension later, the CPP can apply the “child rearing drop-out” provision. This means the CPP doesn’t count the years when you were raising your children under the age of seven when calculating the amount of your benefit. By doing this, we ensure that you get the highest possible payment.
Here’s an example from CPP on how this works. Jennifer was employed outside the home until her daughter, Elizabeth, was born in 1983. Jennifer stayed at home with Elizabeth until she started kindergarten in 1989. When Jennifer applied for her pension some years later, the CPP dropped out the period from Elizabeth’s birth to 1989 when calculating the amount Jennifer should receive. When he pension application was approved, Jennifer discovered that her monthly payment would be $735 per month. Without the benefit of the CRDO, her retirement pension would have been $650 per month.
The CRDO can be used only for months when:
- you or your spouse/common-law partner received Family Allowance payments or were eligible for the Canada Child Tax Benefit (even if you did not receive the benefit), and
- your earnings were lower because you either stopped working or worked fewer hours to be the primary caregiver of a child of yours under the age of seven who was born after December 31, 1958.
Either spouse or common-law partner can apply for the CRDO, but it cannot be used by both for the same period of time.
Why should you apply for the CRDO?
Applying for the CRDO may increase your CPP benefit by excluding from the calculation the periods when your income either stopped or was lower. The CRDO could also help you meet the eligibility requirements for a disability benefit, should you need it. In the event of your death, it could help you meet the contributory requirements to provide benefits to your estate and survivors.
You must apply for the CDRO to qualify. If you were a parent raising children, you will not get the CDRO automatically.
What documents do you need to provide?
You will need to provide an original or a certified true copy of your children’s birth certificates. You may also be required to provide proof of the date of entry into Canada for children born outside the country.
When should you apply for the CRDO?
You should apply for the CPP child rearing drop-out at the same time as you apply for any CPP benefit. If you are already collecting CPP you can still apply for the CDRO and the benefit may apply retroactive to the time you started collecting CPP.
If you need more information or you are unsure about whether you might qualify, call social development Canada (1-800-277-9914). You will need to have your social insurance number.
Does the CRDO get included in my income for income tax? It comes in the child’s SIN?
I’m not quite sure about your question but CRDO helps give you a higher CPP retirement income by dropping out the child rearing years in the calculation.
All CPP income is taxable to you the recipient. The child does not receive any income from CPP.
I hope that helps
I’m a little confused. How does the CRDO affect the CPP in terms of “how long you contributed”. According to your article on getting the maximum CPP benefit, you have to contribute 85% of your working life (40 years).
If I for example have 2 children, 3 years apart and stay home to raise them, technically I can claim up to 11 years between the two children.
Since I also did not work while in university, I did not really start contributing to my CPP until after graduation, age 23.
Does this mean that my benefit will definitely be much lower since I am “only” working a total of 31 years?
The less you contribute to CPP, the less you will get. CPP contributions are based on how much you make. just because you work in a year does not necessarily mean you paid ‘enough’ CPP to get a full year of contribution. In that case you would get partial credit.
As for the CRDO, you would be allowed to drop out the 11 years for calculating your benefit. IF hypothetically you were correct with the 31 years, then you could increase your CPP benefit by 35% (11/31).
the best thing to do is call service canada. They are very helpful and designed to answer these questions! Good luck!
What Service Canada website does not tell you is if you are eligible for CRDO but divorce later on, you will lose the CRDO as half your spouse’s income will be applied to your child rearing years. I am in the middle of appealing this and would like to hear from anyone who has been successful in this regard.
That’s an interesting way of looking at the situation. I’m also appealing this CRDO/DUPE situation, but from the perspective of the male parent. In my case I lost 1/2 my CPP earnings for 10.5 years that my ex-wife has dropped out under the CRDO provision. I would be interested in discussing this issue with you more, if you want to contact me by email at [email protected].
Based on what you have described, the CRDO can help you considerably. Firstly however, 2 children born 3 years apart would only be 10 years of CRDO protection, not 11 years (mth following birth of 1st child until 7th birthday of 2nd child). If you didn’t work at all during those years, they would be excluded from your contributory period, and your CPP benefit would be based on the best 85% of your remaining years (47 yrs – 10 yrs for CRDO = 37-year contributory period). The general dropout (was 15% increasing to 17%) would mean that working and contributing the maximum for 31 years would get you a maximum CPP benefit.
I’m writing to elaborate on Janet’s concerns about losing the CRDO when a DUPE (Division of Unadjusted Pensionable Earnings) occurs, either after divorce or separation. In her case, she has lost the benefit of CRDO because she now has received 1/2 of her former spouse’s iincome for that period, and those earnings are presumably now more than her overall average earnings (if not, she does indeed retain the rights to claim the CRDO).
I am concerned about this same situation (ie., CRDO/DUPE overlap) but from the perspective of the male parent. In Janet’s case (and all female contributors), she at least gets the benefit of either 1/2 the earnings OR the CRDO (this happens automatically, she doesn’t have to choose). The male spouse however, has no such choice. He simply has his earnings reduced by 1/2, but has no option to benefit from the CRDO. That’s fair, you might think. After all, he didn’t stay home to look after the children. That’s true, but after a DUPE, they both have the same CPP earnings for the period of the marriage. Why should only one spouse have protection of the CRDO, and the other is stuck with the lower earnings?
The net result in my case is that my CPP retirement pension estimate at age 65 decreased by about $190/mthly as a result of an 18-year DUPE, whereas my ex-wife’s CPP retirement calculation only increased by about $70/mthly. The reason is that she is able to drop out about 10.5 years under the CRDO provision if those years are less than her “average lifetime earnings”, which is the case for her both before and after the DUPE. I, on the other hand, am stuck with 1/2 max earnings for the 18-year period, only 7-8 of which I can drop out under the general 15-17% dropout provision.
Based on statistics from the government, this issue currently affects 4,000-5,000 male contributors each year, most of whom are unaware because the DUPE happens well before benefits are calculated and the impact of the CRDO becomes apparent.
I am currently appealing this situation at the Federal Court level, and would be glad to hear from others that are affected by this situation.
I would like to be able to understand this better. When my husband and I separated in 2000 we did the credit splitting; but it did not benefit me since I went on Disability before his income went over 26,000.
Can I apply to undo the credit split now-as it obviously affects my pension income at 65 when I must go off CDP and on to CPP?
Hi Susan – No, there is no undoing a credit split (except under very limited conditions, which do not apply in your case). If you had higher earnings than your husband prior to going on CPP disability, the credit split would already have reduced your CPP disability benefits and it will reduce your CPP retirement pension when you turn age 65.
I did not have higher income than my husband prior to the credit split. We are separated and he has applied to decrease my support these last three years before I retire. The judge said I benefitted financially from the Pension Credit Split; when it was done in 2000 my lawyers explained that I did not benefit; I did not realize it would reduce my pension!
Hi Susan – You’re misunderstanding things. I assumed that your earnings were higher than your ex-husband’s, because you said that the credit split didn’t benefit you. If your employment earnings before you started receiving CPP disability were lower than your ex-husband’s, then the credit split likely did benefit you and it will continue to benefit you after your CPP converts to a retirement pension at age 65 (which will be less than your disability amount, but not because of the credit split). Is this any clearer?
Thank you so much for clarifying this.
Hi Doug. I just wanted to clarify something. Are you indicating that all couples are straight couples? I do believe I know some families that don’t have one male parent and one female parent. I was also under the impression that it is not always women staying at home with children while men go off to work.
Hi Jamie – No, I am not indicating that all couples are “straight couples”, and my apologies if it sounds like that. My wording is based on the relevant legislation though (the Canada Pension Plan legislation, the Family Allowances Act and the Income Tax Act). Eligibility for the CRDO is based legislatively on prior eligibility to either the FA and/or CTB. Under the FA legislation, benefits were always paid to the female parent (their wording not mine) unless there wasn’t one, and under the Income Tax Act, the CTB was primarily paid to the female parent (again, their wording not mine). Regardless who actually stayed home to look after the children, eligibility to claim the CRDO under the CPP legislation belongs to the person who was eligible for the FA and/or CTB, and under those respective pieces of legislation, that was either exclusively or primarily the female parent (their wording, not mine).
How does this apply to the death benefit? Rule is the person needs to have made at less 10 years of contributions (or 1/3 of the calendar years whichever is less).
So the person made valid contributions in ’71, ’72, ’73, ’76, ’77, and ’79. That is 6 years. Had 2 children in ’74, and in ’80. So you are given 7 years credit for each child. For child #1 only 2 years claimed (’74 and ’75) then where back to work. So total is 8 years (6 years real + 2 years for the provision). Then for child #2 (’80, ’81, … ’87). Therefore, total is 15 years (6 years real + 9 years rearing provision (2 years for #1 and 7 years for #2)).
You’re misunderstanding the CRDO if you are trying to add those years to years of contributions to meet the requirement for death benefits.
The CRDO could never help you to reach the minimum 10 years of contributions, but it could help you meet the one-third of the calendar years requirement. This would be possible if someone had earnings less than the Year’s Basic Exemption during any full year that they qualified for the CRDO. In that case, the whole year would be excluded from their contributory period, which might result in a lower number of years being required to meet the 1/3 requirement.
What documents do you need to provide?
You will need to provide an original or a certified true copy of your children’s birth certificates.
Re: the above
my wife needed to submit her kids social insurance numbers when she applied, no birth certificates or copies of.
What sort of child-rearing-drop-out-parent am I entitled too if I had and raised a dependant disabled child till aged 18 and after?
I raised three children. 1st born Sept, 1969, 2nd born Oct, 1971 and 3rd born Jan, 1975. I went to work in 1981 and am still working. I will be 65 in 2015. I also went back to school for 5 years in total. Would the child drop off be of a benefit to me?
The child-rearing dropout provision will be of great assistance to you. You will be able to drop out all months from Oct/69 thru Dec/81 when you were a low or non-contributor to CPP. This is done whenever you apply for a Cpp benefit.
How does one calculate how much of a benefit this would be? Is there a way?
Yes, there is a way to calculate the impact of the child-rearing provision (CRP), and the easiest way to get an accurate estimate would be to call Service Canada and ask them to give you an estimate of your retirement benefit at age 65 with and without using the CRP. I could also do this calculation for you, but I would need the year-by-year record of your UPE (Unadjusted Pensionable Earnings).
I don’t know if you’ve read all of the other messages about estimating CPP retirement benefits, but there is a general rule that each year of max earnings is equal to about $25/mth at age 65, if you only qualify for the general (used to be 15%) dropout. If you dropout the entire period of CRP coverage (12 years and 4 mths) and then dropout the new 17% dropout, you will be done to about 34.7 yrs for averaging purposes. That means that each year of max contributions that you have will be worth about $34.70/mth instead of the $25.mth. That difference is what the CRP is worth to you.
My above answer was mostly accurate, except that I should have said that after the CRP and 17% dropouts, you will be down to averaging your best 28.8 years (NOT 34.7), which means that each year of max contributions is indeed worth about $34.70/mth towards an age-65 CPP retirement benefit.
As mentioned, if you want a more accurate estimate, I would need to know your year-by-year UPE.
I’m nearing retirement and have been divorced for 7 years, separated for 13 years. The divorce action did not include for a division of assets. She contributed to CPP from about ’68 to ’77 then raised two children and would be eligible for the CRDO from ’77 to ’87 but She never returned to the workforce. How does this affect her CPP calculation and roughly how much of the maximum benefit is she eligible for?
I would need to review the detailed CPP record of earnings for both of you before I could answer these questions for you. It’s possible that she would be better off claiming the CRDO, but it’s also possible that she would be better off with a credit split.
What’s almost certain however, is that a credit split will likely reduce your pension more than it will increase hers. Here’s a link to another article that I wrote on the negative impact of CRDO and credit split together: https://retirehappy.ca/crdo/
I could do the calculations for a fee, if you email copies of your CPP statements to me at [email protected].
I have a very unique sitution!! I’m only 43 and been on cppd for just over 2 years! I have a 3-10-26 year old. I have 2 different custody orders for my 10 year old which is me full custody since 2016. Before that it was a shared custody order from when she was 9 months old so like 2013. I’m on cppd pension. I am on AISH I have Métis statues I have 2 disabilities physical and mental. My 3 year old I’m currently working on getting cppd child benefit for. And I recently got my 10 year old put on my cppd child benefit. I had to fill out an custody form from service Canada awaiting for further response. I have disability tax credit. I’m single dad pretty much through this whole process. Plus my 26 yea old I paid child support 16 plus years. While working. I’m now on cppd pension what can this do for me? Or anything for that matter? I lost everything my condo. My job. I’m struggling as the mother collects the ccb child gst ahlb I only get child benefit from cppd for one child? Also if they retro pay you only 2 years child benefit from cppd you gotta request for further years? What about child supplement allowance cause I may meet those requirements I was reading? Not sure what to believe on internet lol
Hi Jeremy – I don’t think I can give you a definitive reply, except to say that you can’t get anything for your 26 year-old, because they cannot be considered as a dependent child under the CPP legislation once they are over 25. As for your 10 year-old child, if your mother is receiving the CCTB then even if that child is accepted as being your dependent child under the CPP legislation, the payment of the CPP child benefit may also go to your mother.
Hi I was wondering how this works if you continued to work after having children and did not stay home for the first 7 yrs. I took in my two grandsons one was aged 2 and the other 3 months old, 11 yrs ago and they will be with me until they are of age except for the youngest who is disabled. I have collected child tax benefit for them for all these years.
C. Cormier – If you were receiving the child tax benefit for your grandchildren, you can claim the CRDO for the years that they were under age 7. Assuming your earned income was low those years, this will increase your CPP retirement pension when you apply for it.
You can also claim the CRDO for your own children, but if you didn’t have low earnings (you don’t have to have stayed home fulltime) while they were under age 7, it won’t help you. On the other hand, it can never hurt you!
From the CPP website (with my question following):
The CPP recognizes that most people have periods when they are not in the paid labour force. To compensate for periods of unemployment, illness, schooling etc., up to 15% of your low-earnings periods are not counted toward your CPP benefits.
Likewise, periods of lower earnings when you were at home caring for children under the age of seven can be excluded when calculating your CPP benefits. Other periods may also be excluded from the calculation, such as times when you received a CPP disability benefit.
Note: Starting January 1st, 2012, there will be an increase in the general drop-out provision;
· Effective January 2012: from 15% to 16%.
· Effective January 2014: from 16% to 17%.
Question: If I am eligible for 10 years of child-rearing drop-out (with zero income), am I also eligible for an additional 17% of drop-out for low-earning periods?
Yes, you are eligible to claim both the child-rearing dropout (CRDO) and the general 17% dropout, but there’s a slight wrinkle to how it works.
For most people applying at age 65, they can drop out 8 years (96 months) under the 17% dropout, calculated by multiplying 17% times the 47 years in their contributory period (from age 18 to 65).
If you drop out 10 years under the CRDO, you would only be able to drop out 76 months under the general dropout, calculated as 17% of the 37 years remaining in your contributory period.
Thanks very much Doug!
I left the workforce (retired) in 1981 at the age of 25 to have a child. I did not return to work even after my second child in 1983. Could not find a job that would have made returning to work financially beneficial (after daycare costs). Do I qualify for any CPP benefits, given changes made to the program?
You qualify for a CPP retirement pension if you have at least one year of contributions, so the short answer to your question is “Yes”.
You will be able to drop out approximately 9 years under the CRDO/CRP when your CPP is calculated, but your pension will still be fairly small if you only contributed from age 18 to 25.
Does the CRDO drop all of the potential eligible years for child rearing or just those in which you did not pay max CPP contributions. I had children in 92, 93 and 96, and went back to work after each child after 6 months maternity leave. So I have only those 3 years in terms of child rearing where I did not make the max CPP contributions, and I was close to the max in each of those years for CPP contributions. So is the CRDO calculation likely to be of benefit? Can applying for the CRDO ever hurt you? When I get my statement I may contact you for more detailed estimate.
I do have 5 other years with no or low CPP contributions while in school and university and working only partime.
The CRDO will drop out any years where your earnings were less than your “average lifetime earnings”, so those 3 years may or may not be dropped out in your situation.
In any case, the CRDO should never be able to reduce your CPP, but I would be pleased to do some detailed calculations for you once you receive your statement.
Doug, If I wanted you to do some calculations for me, how do I contact you, what info do you need and what is the cost?
You can email me directly at [email protected]. The cost depends on how many calculations you want, starting at $30 for a single calculation. A copy of your CPP statement of contributions is the main thing that I need, but there is sometimes other information required depending on your particular situation.
I have on child born in 1976,Outside of Canada. When she was born I continued to work, I am now 60 years and I am considering applying for early retirement. Can I apply for the CRDO.
If so, what proof do I need to provide as she was born outside of Canada.
You may still be eligible to claim the CRDO if your child came to Canada before she turned age 7. You would need to provide proof of her birth abd her date of entry to Canada.
If both parents shared the child rearing years, each taking a turn as the primary caregiver, can they each claim half of the CRDO?
One CRA representative has told me this cannot be done, but the forms ask about the dates for the time period and the waiver is only for the time period which applies. So the forms seem to indicate that the CRDO can be split. Which view is correct?
Under the CPP legislation, the CRDO can be shared but it isn’t always easy, especially for period after 1992 when the qualifying criteria is whoever received or was eligible for the Child Tax Benefit (CTB).
For periods prior to 1993, the CRDO is based on whoever received or was eligible for the Family Allowances (FA), which was always the female parent. If the male parent was actually the primary caregiver for any period(s), the female parent can simply waive her rights to the CRDO for those periods and it is done. The way that the CRDO works, its generally best to share full calendar years if possible.
For periods after 1993, whichever parent claimed the CTB is eligible for the CRDO. It generally went to the female parent, but the male parent could have received it if his income was lower and he claimed the CTB at tax time. Whoever received the CTB, they can’t simply waive their rights to the CRDO in favour of the other parent, but if the other parent was the primary caregiver they can request a letter from Canada Revenue Agency saying that they would have been the eligible CTB parent had they applied for it, in which case they should become eligible for the CRDO also.
I worked full time and my wife stayed home to raise the children and then joined the workforce later on. Should I leave the child rearing section 11 of the CPP form blanket, as my wife will fill it in when she applies for CPP in a few years?
Yes, leave that section blank on your application.
Where do I get the application for the CRDO?
Is it a separate application from the early CPP application?
IF so, I’m told there’s no birth certificate required for my
children, only their SIN numbers, indicated on the CPP application
form. Is that correct?
The toll free CPP line has been busy for almost 2 weeks.
I can’t get through to talk to anyone.
You used to have to complete a separate form for the CRDO, but now it is just a question on the application itself.
Yes, I understand that you don’t need to provide birth certificates for your children if you know their SINs.
I had a child in 1976 and 1981. I didn’t start working until 1983 ( part time) , so I would like to claim this benefit. The application asks if you received Family Allowance payments and if there are periods you didn’t and to indicate the dates. I know I received Family allowance but not sure if I received them for 7 years after first child and 7 years after second child. Where would you find this information?
Thanks I appreciate your help.
As long as you didn’t leave Canada, you would have received Family Allowances until your children turned 18 or until 1993 when FA was replaced by the Child Tax Benefit.
My husband is over 61 and going to apply for early cpp. We have two children and I stayed home to care for them and he worked full time. Does he need to fill out any portion of the 11A or 11B on his cpp application? Or should he just leave those all blank?
And also does the fact that he is applying just about 2 years after age 60 mean he would have less taken off for early cpp?
Your husband can just leave those questions blank, as they do not apply to him.
His CPP will be reduced by 0.6% for every month that he is under age 65 when he starts receiving his CPP, so “Yes” the reduction is less at age 62 than it would have been at age 60.
Oh also forgot to mention I have been working with him for the past few years so would be applying for my own cpp in 4 years .So I would fill out all child info then right?
Yes, you should complete those questions when you apply for your CPP.
Thank you so much .^_^
I was wondering how the general dropout affects people who are retiring and taking their CPP at age 60 instead of 65.
Lets say for Example someone has paid into CPP and contributed the max during every year of their contributory period.
IF they take it at age 60 they would lose the percentage from age 60 to 65 (36 percent). however under the general dropout provision I understand where these 5 years would be dropped off so they would still get the maximum. Is this correct?
If someone takes their CPP at age 60, the general dropout will cover the lowest 7 years out of their 42 years from age 18 to 60. So if at least 35 of those years are at max, their CPP at age 60 will be 64% of the max (due to the 36% reduction for taking it early).
I am 64 years of age and will be applying for my CPP in a few months, to take effect in 2017. I stayed home with my two children for a continuous period of 9 years, until they were in elementary school. I divorced their father but we both agree not to touch the other’s pension funds. However, he died prior to ever claiming any of his CPP benefits and so I made an application a few years later for a credit split.
My question is: would I be better off to claim the child rearing benefit or just go with the credit split? I am doubtful that CPP would automatically give me the better of the two
Judy – If you have already applied for a credit split and it was approved, you will currently have half of your ex-husband’s earnings for those 9 years (as well as equalizing your earnings for all of the other years that you lived together). You can indeed “double-dip” by claiming the child-rearing dropout also. Although I personally feel that it’s unfair, it’s an advantage that most female parents have over most male parents.
I agree that it is unfair and it is why I also didn’t go ahead with it until he passed away as I felt someone should get the benefit of all the money he paid into CPP.
I don’t understand how you feel I can “double-dip” if I have pensionable earnings during the “baby” years. Most of his life he paid the maximum so how would I know if it was better to claim the CRP or not?
I’m not suggesting that you’re doing anything wrong by claiming both the credit split and the child-rearing dropout (CRDO), I’m saying that there’s a built-in unfairness in the CPP legislation. It probably seems less unfair now that your ex-husband is dead, but exactly the same situation could have existed if he hadn’t died. If you had applied for a credit split you would have equal earnings for the entire period that you lived together, but only you (as the female parent) would have access to the CRDO. Read this article if you want to know more about this issue: https://retirehappy.ca/crdo/
As to how you know whether it’s better to claim the CRDO or not, it can never hurt you to claim it. If your earnings (after the credit split) for any/all of those 9 years are now higher than your “average lifetime earnings” they will not be dropped out and they will be used in the calculation of your CPP. If they’re lower than average, they will be dropped out under the CRDO. You get the best of both worlds!
I have read all the articles related to this subject and I appreciate all the good information you have provided. Like I said, I do agree with you that the split is unfair and that is why I never applied for the credit split until he had passed away, even though he made $60,000+ in the years following our divorce while I struggled to get back into the work force and pay the bills making roughly $16,000 – but I still refused to take half his CPP, or his company pension for that matter. I was bound and determined to make it on my own. I also did not claim spousal support, although I could have easily have obtained that as well, at least for a few years until my income increased.
You also have to remember in “those days” there was no such thing as the Federal Child Support Guidelines so the non-custodial parent could pay basically whatever he/she wanted.
The world is not perfect by any stretch, that is for sure. I just want to do what is right for me at this time, without hurting anyone else.
So, are you saying that I can claim the CRP and they will figure out what is best for me? Or do I have to decide whether I want to claim it or not, and for how many years?
Judy – Yes, you just claim the CRP for the whole time that at least one of your children were under age 7, and they will figure out if/when it helps you.
I’m in the same boat as Judy. I divorced the father of my 3 children who passed away after. He insisted I apply for the credit split. He also had a much higher income and I did not receive spousal or the correct child support based on his income. The Federal Child Support Guidelines didn’t help some of us very much.
The world is not perfect or fair Judy!!
I also just want to do what is right.
I had 3 children I was off work with separate time frames. It clearly shows on my CPP statement those 3 time frames with each child.
I’m coming up to retirement and getting ready to apply for my CPP. So I should just submit the child rearing with my application for my children and they will just figure out what is best for me? I’m 63 now so could apply at any time.
I also wonder how it works if we take CPP earlier, do we end up with the same amount eventually we were quoted by the time we get to 65 if we take CPP at 60 or anytime prior to 65? Does it add up to around the same amount by age 65? I have heard so many recommend to take it early but mine shows a difference of $135 from 60 to 65.
Hi Barbara – Your first question is easy. Yes, just apply for the child-rearing provision whenever you apply for your own CPP. I’m not sure that I understand your second question though. If you are asking whether your CPP will increase at age 65 if/when you take it early, the answer is “NO”. If you are asking if the amount if you wait to take your CPP at age 65 will be as much as Service Canada estimates, the answer is “Maybe”. Does this answer your question? If not, perhaps you could rephrase your question.
You should apply for the CPP child rearing drop-out at the same time as you apply for any CPP benefit.
I am still employed full time, do I only apply once I retire? Or do I apply now, with the expectation that once I do retire, in a few years, this ‘child rearing’ additional funds will be added then?
Heidi – As you said in your first sentence, you should apply for the child-rearing dropout whenever you apply for your CPP regardless when you actually stop working.
I guess my question should have been, if I apply and receive my CPP now at 63 will it end up being what they estimated by the time I get to 65? Originally before my credit split my estimate was $496.91 at 60, $618.30 at 63, $734.14 at 65. That was quite the difference between 60 and 65!
I am really curious to see whether the credit split or the child rearing provision will be better for me. I suspect the CRP. I don’t understand the reference to double dipping for instances like Judy and I since in the end they use the only the one calculation, granted it’s the one that is higher or more beneficial but in both instances we earned it.
Hi Barbara – I’m sorry, but I still don’t understand what your question is. For one thing, you never have to choose between a credit split and the CRP, because you can have both. To explain my reference to double-dipping, if you apply for a CPP credit split, the result would be that you and your ex-husband would then have identical records of pensionable earnings, for all of the years that you lived together. That makes you both equal from a CPP perspective, and that is totally fair. What makes it unfair is that you also get to claim the CRP and your ex-husband can’t. If your earnings are identical, why shouldn’t the CRP apply to both of you or neither of you. That would be equality.
Doug, I took that sentence straight out of the web site. I still don’t understand when to apply. Am I correct to take this as ‘when I apply to receive CPP’ which would then be when I stop working?
I am 51, about to move with a spouse, possibly not finding a job right away, but not retiring as of yet. If I wait to apply when I am looking to receive CCP benefits, how do I know this will ‘child rearing benefit’ will still be applicable. I feel like I should be able to apply for this now, with the idea it will be added to my CPP when I retire. Sorry….this is all very new, including CPP itself, to me.
Heidi – Applying for the child-rearing dropout is just part of the process of applying for your CPP, so it can’t be done ahead of that. You can apply for your CPP anytime after age 60, regardless when you retire.
Thank you…nice to understand!
My mother wants to apply for the child rearing provision, but we have lost my and my brother’s immigration papers (proof of entry to Canada). Do we need to get those from Canada Immigration?
Pilinka – Yes, you will have to prove the date(s) that you arrived in Canada.
Or can she just decline the child rearing provision?
Pilinka – Yes, you could do that if she doesn’t feel that it’s worth the effort.
I worked before CPP was introduced and stopped working in the 60’s to raise my 3 children. We decided I would be a stay at home mom, and i never returned to work. Is there any benefit available to me.
Alice – No, if you never worked and contributed to CPP, the child-rearing dropout doesn’t help you at all.
My wife only worked for 4-5 years before we had children and did not return to work.
Does that mean I should apply for the child rearing provision or should my wife apply separately?
Sheldon – Your wife should apply for her own CPP and she should claim the CRP.
I worked for 34 years in Canada and took 2 separate maternity leaves for period of 6 months each, when 2 of my children were born, while being employed.
Can I apply for child rearing provision while applying for CPP?
If yes,would it make significant difference in my CPP income or not really?
Thank you in advance for your answer.
Yes, you can apply for the child-rearing provision but it doesn’t sound like it will have a significant impact in your case.
I’ve worked 25.5 years from July 1990 to 2016. My average contribution is 80% (75% to 85%)of YMPE, except for year 1990 which was 40% because I only worked half year. If I retire Jan 2017, how much would I receive? and how does the 17% drop out applies. If I understand correctly, it would be 25.5 years – 4.5 years (17%) = 21 years; 80% x $1,092.50 (max benefit) = $874
Catherine – The answer depends on what age you plan to start receiving your CPP.
I’ll start my CPP at age 65.
My wife worked for twenty years (contributing the max CPP amount for all of those years) and spent sixteen years at home raising our children. We have been retired for the past six years and are in our early sixties. My wife has a number of friends who insist that she should consider taking her CPP benefits soon; they are under the impression that by waiting until sixty-five to collect CPP the child rearing benefit that she is entitled to will be reduced. Is this correct?
Hi Tom – Your wife’s “child-rearing benefit” won’t decrease in value if she waits until age 65 to apply for her CPP, but her “calculated retirement pension” might decrease with the additional years of zero earnings. If you want me to do some calculations for her (for a fee), email me at [email protected].
I am Canadian born 1943. my Australian wife born 1944 and I lived and worked in Canada from 1966 to 1988 and had 3 children. We then moved to Australia for family reasons and have lived and worked in Australia since. My wife received Canadian pension plan disability for 39 months prior to age 65. Although she was diagnosed in 1972 with a terminal cancer she somehow worked after and lived until age 72. I am in the process of getting my survivors pension sorted out. I recently got the child rearing amount but I don’t know if the 39 months are allowed to be counted in calculating her pension and my benefit. Also she did not earn money in 2002, 2003, 2004, 2005 or 2006, or during the allowed disability period of 39 months prior to becoming age 65. can any of these other years be used in drop out calculation?
Hi John – Which one of you was the primary caregiver and presumably had lower income while the children were under age 7 and while you were still living in Canada? The 39 months while your wife was receiving a CPP disability pension will definitely be excluded from her contributory period when your survivor’s pension is calculated.
Hi Doug Thanks for your reply. My wife was the primary caregiver and also the lower income. From your reply can safely say she was entitled to have that 39 months excluded in spite of which country she was living in? Then she was very seriously ill with non hodgkins lymphoma and hospitalised from 2004. Can any of this time from 2002, 2003. 2004 2005 and part of 2006 until the allowable earliest date of disability be considered for dropout although she was living in Australia? My wife birthdate was July 6, 1944 and passed away July 9, 2016. That would mean her contributing months would be 523 and child rearing is 100 months and disability months are 39 so the maximum contribution months are 384…without any general dropout in the equation so far?
Hi John – As indicated in my previous reply, the child-rearing dropout (CRDO) only applies to periods of time when the children were under age 7 and both the children and the parent were living in Canada (this is because CRDO eligibility is linked to prior eligibility to either FA or CTB, which weren’t paid if the child and/or parent weren’t living in Canada). To help clarify for me, what are the children’s birthdates?
I was born in 1964, I worked part time for my first few years after completing grade 12. I had my first child at 19, having a total of 4 children each being approx. 3 years apart.
Would I qualify for the child rearing drop out, is there a minimum number of years I must have of “real work”?
Would it make sense for me to try and get in a few more years before I retire (hit 65)? I have a disability, damaged knee, so working would be difficult but may be worth it if “topping up” would make a big difference.
Hi Wendy – Yes, you will qualify for the child-rearing dropout provision (CRDO or CRP). But that doesn’t give you any credit towards a CPP pension, it just reduces your contributory period so that any years of actual earnings/contributions that you do have will be more valuable to you when your CPP pension is calculated. I’d need to see your entire CPP contributory record in order to tell you how much of a difference it would make if you worked for the next few years.
I am 61 years old looking to retire in 2020. I began working full time in 1979 after university. Worked some part time jobs in my teens. I was on mat leave when my children were born for about 4 months.
I have four children. First born in 1985 and I returned to work full time. Next child born Nov 1987 and went back to work on a casual part time basis but worked mostly full time hours average 30 hours/week. Next child born May 1989 and only worked part time averaging between 15 hours a week from Sept 1989 to Jan 1990 and then up to 10 hours a month. Last child born Jan 1992 and worked part time until 2000. I have worked full time since 2001. CRA calculator indicates if I retire in 2020 (two years from now) I will receive about 620.00 in CPP. Any idea how much more I would receive by taking CPP at the age of 63?
Hi Elizabeth – The only way that I can provide you with any kind of reasonably accurate answer would be if I could see your complete CPP record of earnings and contributions. If you’re interested, email me @ [email protected]
My fee for one calculation is $30, an additional $20 if you want a second calculation and $10 more each for any additional calculations.
I’m applying for CPP and there’s a provision for pension sharing. My question is – does my sharing of CPP effect any possible amount my wife could get for CRDO? She hasn’t work very much and therefore hasn’t contributed very much. The first three years of birth she didn’t work at all.
Hi Larry – No, sharing your CPP will not impact the CRDO at all. The CRDO will be calculated first, and then you will each share your net CPP benefit amounts (you’re sharing the benefit amounts and you’re not sharing the earnings which would affect the CRDO).
I had to retire to raise my grandchildren under the age of 7. Am I able to use these years for the CDRO I do receive their child tax benefit I had to retire at 55 and also had 2 children of my own I stayed home with from 1982 to 1990.
Hi Angel – Yes, if you receive the CTB for your grandchildren you can claim the CRDO for them, as well as for your own children.
My wife and I left Canada in 2006 (the last tax year we filed in Canada – we became non-residents for tax purposes in mid-2006). Our CPP statements of contributions go back to 1982 (mine) and 1983 (my wife). She stopped working in 2002 after our daughter was born. When we apply for CPP, would the CDR apply for 2002 through 2008 (when my daughter turned 7) or only from 2002 through 2006 (the last year we were in Canada)? Related question, can we both claim General Dropout that includes years after we left Canada? We are now in the US, where she has never gone back to work, and I have SSA contributions since 2006. Still a ways off from applying for CPP, but looking to understand how this may be treated.
Hi Brad – She could claim the CRDO starting the month following your daughter’s birth until the month that she left Canada. The general 17% dropout will always drop out zero-income years first, which would include any years that you were living outside Canada.
I am trying to get this childrearing benefit for my mother but my two brothers refuse to even give their SIN number. I explained it but nope they refuse. So what happens if I send it in for her without their SIN numbers?
Hi Sarah – I guess if they won’t provide their SINs you have no other option but to submit the form without their SINs and see whether Service Canada approves it or requests any other details.
After the 3rd spelling/grammatical error, I stopped reading.
I am trying to determine if I should apply for CPP at age 63 (November, 2020) or age 65, to maximize my CPP, based on the following:
1. Assume approx. half the max pensionable earnings for 1974 (age 18) to 1980 and for 2020
2. Can claim the CRDO for 1986 to 1997 (from birth of first child to third child’s 7th year)
3. Assume max pensionable annual earnings from ’81 to ’86 and from ’98 to 2019
4. Assume only RRSP withdrawals for 2021 and out years
I think all of this combines to leave me with 9 years of less than max pensionable earnings if I start CPP at age 65 (2021) vs. 7 years if I start CPP at age 63. Is the two years from age 63-65 with no pensionable earnings going to decrease my CPP by more, or less, than if I take a reduced CPP payment at age 63?
Thanks you in advance for any insight you can provide,
Hi Katie – I can almost guarantee you that the reduction in your CPP for the two years of zero earnings from age 63-65 would be less than the reduction for taking your CPP at age 63. I’d want to do actual calculations for you before I gave you any advice though, and my fee for those two calculations would be $50 plus GST. If you’re interested in this, email me at [email protected]
Hi Doug, I worked in Canada from 1978-1984, went overseas to work then back again from 1987-1993 then back overseas to work again and am now 59 and back in Canada. I hope to find work again. I was wondering why my cpp statement from 1998 says that at age 65 I will get $230.82 and my recent paper statement say that payment will now be 173.27 based on the same contributions? I would have thought that over the years the amount would have gone up due to cost of living increases but with nothing changed it has actually gone down.
Hi Catharine – The amount of your future CPP benefit is based on your average lifetime earnings at the time you qualify for a benefit. You’ve added 22 years of time since 1998, but you haven’t added any earnings/contributions. Your average lifetime earnings have therefore decreased and thus your estimated CPP benefit has decreased, despite the increase for inflation during those 22 years.
Thank you for clarifying this for me. Not great news but it is useful information.
I worked from 1976 to now, my child rearing years (7 years per child) are from 1976-1992 and 1995-2002 which I only contributed 2,484.62 to CPP but from 2003-2021 I contributed $8,081.24. Can I ask that the child rearing years all be wiped out even if there was little contribution of $2,484.62?
Hi Deb – Each year within each of your two possible child-rearing periods will be looked at separately. It is not the amount of contributions that is relevant but the amount of your “pensionable earnings”. If your pensionable earnings for any year are lower than your average lifetime earnings, those years will be dropped out. If your earnings are above your average lifetime earnings, those earnings will be retained for the benefit calculation.
I only have a couple more months to apply for CPP before I want it to start at age 65. I’m having trouble getting the proof of entry to Canada for one of my 3 children for my child rearing provision. If I just apply for my CPP now and apply for the child rearing provision separately later, approximately how long will it take them to process the child rearing provision application and apply it to my CPP benefits? I could put two out of three children on my CPP application for child rearing provision now. Can I change my application after it’s processed to add my third child when I get the paperwork for her date of coming into Canada?
My only child was born in March 1989. My husband was in the Canadian Forces and we were posted to Germany that summer – left in July 1989 and we did not return to Canada until September 1991. I don’t ever remember receiving a Family Allowance payment, and I know for a fact that I never received the Canada Child Tax Benefit – probably due to my husband’s salary. I did not work at all and was the primary caregiver until I began working full-time when my child was 12 . I have worked full-time since then. I believe that I would have been “eligible” for both the Family Allowance and the Canada Child Tax Benefit had I applied. But if I did not apply for those benefits at the time, does this now mean that I would not be entitled to claim the child rearing dropout provision when I apply for my CPP retirement pension this year (I have worked and contributed from age 65 to 70)?
Hi Kelly – You would have been eligible for FA while you were posted outside Canada with the military, so you will be eligible to claim the child-rearing dropout provision when you apply for your CPP.
Hi. My first child is 23 and second child is 19. My 19 year old has special needs and qualified us for the Disability Tax credit. I stayed home from 1999 to 2022 and worked a little from home over those years but very minimal. Can I claim all of this years as my second child had a disability and required me to be home with her.
Hi Kelli – No, the child-rearing dropout under CPP only covers you while at least one of your children was under age 7.