You cannot get your Pension when you are over 65 years old if you have quite a lot of moneny at the bank?

Question

My friend is 64. She's been here for 8 years and she is Canadian Citizen. She is very worried about Canada Pension Plan system, for someone told her that she cannot get her pension after 10 years' time in Canada, because she has quite a lot of money at the bank. Is that true? Thanks a lot!

Answer 1

First of all , you must make the difference between the Canada Pension and The Old Age Security Pension.

The Canada Pension Plan is payable anywhere in or outside of Canada , but the amount is dependent on earnings and years contributed to the system..

The Old Age Pension is based on years of residence in Canada.
A full pension at 65 requires you to have resided in
Canada for 40 years after age 18. You must also have been a legal resident during this period.

However, there are what we call international agreements with
other countries that permit us to receive sometimes partial pensions . A partial pension will be calculated based on actual legal years in Canada.You cannot expect to receive a full pension if you haved not resided in Canada all your life.
This is a very complex issue in pensions at 65yrs.

On the other note of having so much money .

It is not the amount of money in the bank that can reduce your pension but the interest , or other taxable sources .

Example : You must exceed the 58,000.00 amount in order for revenue Canada to start lowering your benefit. Above 80,000.00 amount it will probably be 0.00.
This called a recovery tax. The amount is witheld from your
old age security check . It will count as tax witheld at the source
for your next year tax.

Your friend should contact the revenu Canada office directly or
go to a good accountant who could easily verify this.

Answer 2

This is an extremely complex situation. The Canadian pension is not recognized as such by the U.S. and she will need to work with either an attorney or a CPA who has experience in this area. If you do it wrong it is very costly.

Answer 3

Call the pension plan and ask them so you get a correct answer..not a third hand answer.