Canada Pension Plan benefit calculation fixes

Summary#

This Order brings Division 28 of Part 5 of the Budget Implementation Act, 2022, No. 1 into force for parts of the Canada Pension Plan that fix how some disability and child‑rearing credits are calculated. It took effect the day after the Order was made — the Order was made on May 4, 2023, so the provisions came into force on May 5, 2023.

What it does#

• Brings into force the amendments in Division 28 of Part 5 of the Budget Implementation Act, 2022, No. 1 that change how certain Canada Pension Plan rules are read and applied.
• For the Post‑Retirement Disability Benefit:
  • Specifies the start and end dates for the Minimum Qualifying Period so eligibility matches the original policy intent.
  • Aligns the Minimum Qualifying Period with the disability pension rule of contributions in at least 4 of the last 6 years, or 3 of the last 6 years for contributors with 25 or more years of contributions.
  • Clarifies that contributions made while receiving a retirement pension can be used for eligibility calculations.
• For the disability drop‑in:
  • Ensures the month someone becomes disabled is included in their contributory period.
  • Requires prorating the Year’s Maximum Pensionable Earnings (YMPE) for years in which a contributor turns 18.
  • The drop‑in amount is based on 70% of average pensionable earnings in the six years before disability (this calculation is clarified by the amendments).
• For the child‑rearing drop‑in:
  • Requires prorating the YMPE for years in which a contributor turns 18 so the five‑year average used in that drop‑in is calculated consistently.
  • The child‑rearing drop‑in is based on the average pensionable earnings in the 5 years before a child’s birth or adoption.
• Confirms that the required provincial consent (from at least two thirds of provinces representing at least two thirds of the population) was obtained.

Who's affected#

• People who retired before 65 and later become disabled and who may qualify for the Post‑Retirement Disability Benefit.
• People with disabilities whose benefit calculations use the disability drop‑in.
• Primary caregivers of young children who use the child‑rearing drop‑in when pension amounts are calculated.
• Contributors whose benefit calculations include a year in which they turn 18, because the YMPE will be prorated for those years.
• The amendments are described as technical and are expected to affect a small number of people; the source does not give an exact number.

Why it matters#

• These changes fix ambiguities so benefit eligibility and amounts are calculated the way policymakers originally intended. That can prevent people from being wrongly excluded or miscalculated.
• For affected individuals, the result may be clearer eligibility decisions or slightly different benefit calculations in some cases.
• The government says there is no impact on the overall financial position of the Canada Pension Plan; the changes are meant to align the law with existing policy rather than change benefit levels broadly.
• Published guidance and communications about the Canada Pension Plan will be reviewed and updated to reflect the clarified rules.