Most Canadians don’t understand the CPP
Reports recommend more outreach and advertisements
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Reports recommend more outreach and advertisements
OTTAWA – Internal evaluations of the Canada Pension Plan show the retirement system is poorly understood by most of the public — a problem retiree Evan Brett avoided only through luck and meticulous record keeping.
The 76-year-old realtor and his wife Latifah dove into their files at their Langley, B.C., home a decade ago when Latifah applied for retirement benefits. The documents they happened to have stockpiled ensured they were able to maximize the benefits they receive today.
Evan Brett said he knew enough about the Canada Pension Plan to avoid tripping over application hurdles.
But he is sure others aren’t nearly as well-versed — and documents obtained by The Canadian Press under the Access to Information Act suggest he is right.
Evaluations drawing from workers, retirees and Service Canada officials show Canadians are often confused about what they need when applying for CPP benefits, have a hard time understanding information on government websites, and don’t completely understand the cornerstone retirement program.
The reports recommend more outreach and advertisements to help seniors navigate the system and avoid frustration and shock when they apply for benefits.
Take the child-rearing provision, which caused the Bretts’ headaches. The provision allows a retiree to exempt up to seven years that they were out of the workforce raising children so the lower wages during those years don’t bring down how much they are eligible to receive in retirement.
One evaluation suggested Canadians often don’t know the provision helps them earn more in retirement. And when they do realize the difference, they have issues tracking down documentation such as birth certificates from adult children.
The Bretts had enough paperwork handy a decade ago that they were able to convince the government it was using the wrong seven-year period to calculate Latifah’s child-rearing years, eliminating a possible reduction in monthly payments.
The reviews also found that generally, retirees don’t know that CPP retirement and survivor benefits — the latter paid out to widows or widowers — are blended into one capped payment that is usually lower than the sum of the two separate benefits.
Public opinion research done as part of the CPP evaluation recommended the government remove the cap on the blended benefit.
Talking to Brett about calculating the blended benefit gives a window into how dizzying the calculation can be, and how he struggled to figure the financial hardship a cap on benefits would have on the surviving spouse.
“As it is, we’re constantly behind in our payments of our rent and our mortgage and our groceries,” he said.
The reviews turned up other troubling issues with Canadians’ knowledge about CPP.
Service Canada officials noted that many clients don’t know they have to ask the government to deduct taxes from CPP payments. “They assume that such taxes are automatically deducted from their CPP benefits,” one report said.
The reviews showed aboriginals who live on reserve often don’t learn until they turn 65 that they won’t receive CPP retirement benefits because employers on reserve aren’t required to contribute to CPP.
It’s not just the existing program that requires more outreach. Public opinion research ordered by the Privy Council Office late last year found that few participants recalled that CPP benefits and contributions were going up starting in 2019 as part of an expansion federal and provincial leaders agreed to over the summer.
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On applying for CPP in 2011, the service clerk could not find my file in their data record. They asked for a copy of my birth certificate and as it turned out the copy I have had and the only copy I have ever had, was a photo copy. This was not acceptable so I had to go through the process of getting another original copy, which included providing birth details of my parents.
The birth date they had for me in their file was different from my actual birth date by 14 months.
As I recalled, this was because at 13 years old, I lied about my age for my first summer job, so I would be eligible for the job, selling pop corn in a city park.
All this was explained to the service clerk and I was assured that the appropriate correction would be made to my file, and I began to received CPP monthly payments.
Eight years later I received a letter from Service Canada advising that they had paid me based on the original birth date that they had on file and now want me to repay over $8000!
I sent two registered letters to them 14 months ago and never received a response, until last week advising me to payup.
Can anyone tell me if there is a Statute of Limitations on them trying to recover money that was caused by their error? Or any other reasons for defense.
I plan to contest their action in court if necessary
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