Retirement is the period of life where people put less time into work, some opting out completely and others continuing on a casual basis. It’s the time to reap the rewards you earned during your main working years, whether that’s through savings or a government pension plan. Similar to the Canada Pension Plan (CPP), the Quebec Pension Plan (QPP) helps retirees. When used together, along with personal savings, you can more easily live your ideal retirement.
What Is QPP?
The Quebec Pension Plan (QPP) is a program administered by Retraite Quebec. It’s similar to the national pension plan that operates through Revenue Canada. In the province of Quebec, income gets taxed by both agencies. This money is held in a massive pension fund which the government uses to pay current pensioners. Because of the fund’s size, it accrues substantial interest. The government also invests this money to help it grow to the necessary size to support the retirement of the current workforce. Once you retire, you can claim the value of your pension fund from Quebec, whether or not you still reside in the province.
QPP Contributions
The QPP contribution rate is 12.8% in 2023 (This amount included both the basic plan (10.8%) and the additional plan (2%). The contributions are equally split between you and your employer.
| QPP Contribution | 2023 |
|---|---|
| Contribution Rate | 12.8% |
| Maximum contribution as an employee | $4,038.40 |
| Maximum contribution (for each employee) as an employer | $4,038.40 |
The Additional Plan
In January 2019, the Government of Quebec made some changes to the QPP to help provide additional financial security for retirees. The change includes an “additional plan” where additional contributions will be made.
With the additional plan, the retirement pension will increase based on the years contributed to the additional plan. Where the old QPP replaced 25% of your income, with the additional plan, retirees can expect an income replacement rate of 33.33%. Pensionable salary also increases through the additional plan, up to 114% of the MPE value.
The contribution rate for this plan is 2% and is equally funded through individuals, and their employers, based in Quebec. The contribution rate will increase until 2025, according to current plans. The funds get collected by Revenu Quebec and are managed within the province.
Check out these tax considerations for seniors.
Type Of Financial Coverage QPP Offers
QPP is a pension plan that is available to people and families who made sufficient contributions to the plan. There are different types of benefits, including:
Retirement
A retirement pension is calculated based on the amount you earned through employment since 1966, the year of the plan’s founding. It varies based on the age you claim the pension, with the earliest being at the age of 60 and the standard age of retirement being 65. There is a retirement supplement for retirees who choose to work and earn the above exemption amount of $3,500 per year. It continues to grow annually, provided you continue to work during that time.
Disability
Those who have not reached retirement age may be eligible for a disability pension if they have a permanent and severe disability. The medical professionals working for the government must sign off on the diagnosis. Additionally, you must have contributed a sufficient amount to the pension. The contribution amount depends on your contributory period (which is the time after your 18th birthday and the day you become disabled).
Under this benefit, you can get also get additional support if you have a child under the age of 18. Whether or not your child is employed, you can receive extra support.
Death
The death benefit from the QPP can result in a maximum payment of $2,500 to an individual or charitable organization that paid for the funeral expenses. If the funeral costs were less than $2,500, the heirs of the estate can get the remaining funds. An application and proof of payment are required to receive the QPP death benefits. Please visit the Retrait Quebec website for more information and a list of accepted expenses.
Survivors
Surviving spouses of individuals who significantly contributed to the Quebec Pension Plan are eligible to receive a basic income. As long as Retraite Quebec recognizes the living spouse as the surviving spouse of the deceased. The regulations account for both marriages and civil unions. There are special rules for those who are legally separated or when the death occurs within the first year of marriage.
Under this benefit, the surviving spouse can receive a monthly benefit if they are under the age of 45 and have no dependent children. If they are between the ages of 45 and 64, they may be entitled to more each month.
Additional Reading
How Much Can You Get Under The QPP?
The specific amounts you can claim from the pension plan differ, with the maximum amounts as follows:
| Type of QPP Benefit | Maximum Pensionable Earnings |
| Death benefit | $2,500 |
| Retirement at age 65 | $1306.57 monthly |
| Retirement at age 60 | $836.20 monthly |
| Retirement at age 70 | $1855.33 monthly |
| Disability pension | $1537.13 monthly |
| Spousal survivor over age 65 | $746.65 |
QPP Payment Dates 2023
While most pension benefits are issued monthly, the exact day differs each year. For 2023, the dates are as follows:
| Benefit month in 2023 | Payment Dates |
| January | January 31 |
| February | February 28 |
| March | March 31 |
| April | April 28 |
| May | May 31 |
| June | June 29 |
| July | July 31 |
| August | August 31 |
| September | September 29 |
| October | October 31 |
| November | November 30 |
| December | December 28 |
Who Is Eligible For QPP Payments?
Eligibility for the QPP benefit is mainly age-based. Even if you continue to work after retirement, you can claim the value of the pension while you work and continue to contribute. Anyone earning less than $3,500 is exempt from contributions.
Provided you paid into the QPP during your career, you can begin to receive benefits at the age of 60, though most choose age 65. At minimum, workers must have contributed to the pension plan for at least one year, to receive retirement benefits at the age of 60.
How Do I Apply For QPP Payments?
The application process for QPP payments is straightforward, requiring five steps as follows:
- Authentication: When you access the Retraite Quebec service online, it requires proof of identity. You can either create an account or use a secure code that can be sent to you via mail.
- Estimation: Complete an online application and the website will calculate the estimated amount of your pension. While it isn’t a fixed amount, it does provide a reasonable idea of what to expect.
- Submission: Once you complete your application, and review its contents, submit it for review to the pension program officials.
- Confirmation: Not long after you submit your application, Revenu Quebec will send you a confirmation through regular mail.
- Tracking: To keep tabs on the process of your application, navigate to your account online and review the status.
QPP FAQs
Can you receive QPP if you’re still working?
What are retroactive retirement pensions?
When can I apply for QPP payments?
Is QPP taxable income?
At what age can you apply for QPP?
Final Notes
The Quebec Pension Plan allows those who worked in the province, and made sufficient contributions, to reap the benefits during their golden years. Regardless of whether you choose to retire in Quebec or elsewhere, provided you contributed to the plan, you are eligible for the pension.
When used in conjunction with the Canada Pension Plan, and any private savings held in an account like an RRSP, you can experience a comfortable retirement. If you’re beginning to plan for retirement, or are approaching the age of 65, it’s important to plan for how the pension income will impact your finances. Provided you account for any possible tax burden, the money can allow you to enjoy retirement however you choose.
