2007 changes to the Canada Pension Plan and the Old Age Security Act
On November 27, 2006, Parliament enacted Bill C-36 "An Act to amend the Canada Pension Plan and the Old Age Security Act". The bill brought forward changes to the Canada Pension Plan and Old Age Security Program—some of the changes were administrative and others involved changes to benefit eligibility. The bill received Royal Assent on May 3, 2007, and most of these provisions are now in force. The provisions for full electronic services require the development of regulations before they can be implemented.
Described below are the changes to the Canada Pension Plan and the Old Age Security Act, as well as some changes that are common to both.
Canada Pension Plan (CPP)
What are the highlights of the changes to the CPP?
Full Funding
- As recommended by federal, provincial and territorial ministers of Finance in their 2006 triennial review of the CPP, the changes ensure that federal and provincial ministers of Finance consider the full funding of any new or increased benefits provided under the CPP. Under full funding, each generation that receives benefit enrichments is more likely to pay for it in full and not pass on the cost to future generations.
- The changes set out reporting requirements and clarify rate-setting in the presence of costs. They also provide for regulations to give specific direction to the Chief Actuary for calculating costs related to new or enhanced benefits.
Long-term Contributors — Canada Pension Plan Disability (CPPD)
- As recommended by federal, provincial and territorial ministers of Finance in their 2006 triennial review of the CPP, contributors who made 25 years or more of contributions would meet the eligibility criteria for earnings and contributions with valid contributions in three of the last six years. Applicants will also have to meet existing CPPD medical criteria to qualify for the benefits.
- The amendment extends CPPD coverage to thousands of contributors with a long history of labour force attachment. It also represents the first enhancement of the CPPD Benefit since the 1998 changes to the Canada Pension Plan (Bill C-2).
CPP: Business Transformation Changes
- Statement of Contributions (SOC) online: the changes permit contributors to request a SOC more than once a year.
CPP: Administrative Changes
- The changes allow former common-law partners to apply for a credit split more than four years after the date of separation where both former common-law partners agree in writing.
Old Age Security (OAS) Program
What are the highlights of the changes to the Old Age Security Act?
Ongoing renewal
- The requirement for a renewal application for the Guaranteed Income Supplement (GIS) and the Allowance benefits (once an initial application has been made) has been waived. Recipients who file tax returns do not have to reapply.
Agreements to co-administer similar provincial benefits
- The changes allow the Minister of Human Resources and Skills Development to co-administer provincial benefits for seniors, based on federal-provincial agreements.
Simplify the reporting of income for couples and seniors
- The changes make the application process easier for seniors who apply for income-tested benefits and who have suffered a loss of income due to the termination or reduction of employment or pension income, by requiring that seniors report estimated pension and employment income only.
- The requirement for spouses or common-law partners to provide marital and income information already provided by the other spouse/partner has been eliminated.
- The changes permit OAS application withdrawals where the pension is not yet in pay.
OAS: Consistent Benefit Entitlements
- The changes discontinue the ability of estates to apply for income-tested benefits after the death of the low-income senior.
- The changes provide a consistent entitlement to income-tested benefits for sponsored immigrants.
- Immigrants subject to a sponsorship agreement who become citizens before the expiry of the agreement are not entitled to receive GIS or other income-tested benefits until the agreement has ended.
- Access to income-tested benefits will be available if the sponsorship agreement breaks down.
OAS: Clarity of Legislation
- The changes clarify existing provisions to ensure that they are clear, consistent and reflect the true intent of the Old Age Security Act.
What are the highlights of the changes to both the Canada Pension Plan and Old Age Security Acts?
Provisions for electronic services
- Provisions for full electronic services did not previously exist for the CPP and OAS. The changes to the Canada Pension Plan and the Old Age Security Act provide the authority to the Minister for electronic service delivery and transactions. Regulations will be necessary before full electronic services are available.
Penalty provisions
- The changes update the penalty provisions of both Acts that came into force on April 1, 2010, and that have been applied as of October 1, 2010. Administrative penalties may be imposed in cases of deliberate misrepresentation.
In addition to the legislative amendments, HRSDC has also issued a Disclosure Policy which is effective immediately. For details of the Disclosure Policy, see the Service Canada website.
Charging of interest
- The changes in the Canada Pension Plan and the Old Age Security Act provide authority to the Minister to set the terms and conditions for the charging of interest on penalties, as well as associated overpayments. The charging of interest is applicable in cases of misrepresentation. Regulations for the interest provisions came into effect on April 1, 2011.
Information sharing
- The group of third parties to whom a contributor's personal information may be provided upon written consent of the individual has been expanded. An authorized person may be a spouse, partner, other family member or friend.