The CPP Post-Retirement Benefit changes the way Canadians use the CPP while still working after age 60. This federal program started in 2012 and lets people receive their CPP retirement benefits even as they earn more pension credits.
For Canadians aged 65-70 who continue working, the PRB creates a unique decision point between immediate income and long-term pension growth. Understanding PRB mechanics determines whether you’ll maximize your retirement income or leave money on the table.
What is the CPP Post-Retirement Benefit (PRB)?
The Post-Retirement Benefit is an additional CPP payment you earn by working while collecting your regular CPP pension. Each year you contribute to the Canada Pension Plan after starting your retirement benefits, a new PRB payment is generated. These payments stack on top of your existing CPP, even if you already receive the maximum pension amount.
The program serves Canadians who blur traditional retirement lines. Before 2012, starting CPP meant stopping contributions entirely. Now, workers aged 60-70 who collect CPP can build additional pension income through continued employment.
Who is eligible for the CPP Post-Retirement Benefit?
You may qualify for the CPP Post Retirement Benefit (PRB) if you:
- Are between 60 and 70 years old
- Are already receiving a CPP retirement pension
- Continue to earn employment or self‑employment income
For workers under 65, CPP contributions are mandatory while you are employed. If you are 65 or older, you can choose to stop contributing by submitting form CPT30 to the Canada Revenue Agency.
Residents of Quebec are not eligible for the CPP Post-Retirement Benefit. Instead, they receive a similar retirement pension supplement under the Quebec Pension Plan, which operates under its own set of rules.
Self‑employed individuals also qualify but face higher costs because they must pay both the employee and employer portions of CPP contributions. This effectively doubles the amount they contribute for the same PRB benefit.
How does the CPP Post-Retirement Benefit work?
Post-Retirement Benefit payments begin automatically in January following each year you contribute while receiving CPP.
Your employer deducts CPP contributions from your paycheque if you’re between 60 and 65, or optionally from 65 to 70. These contributions generate a new CPP PRB that depends on the following four factors:
- Your annual earnings determine contribution amounts
- Your age on January 1st affects the benefit size
- Each CPP PRB payment continues monthly for life
- Multiple PRBs stack together over the working years
A person working from 65 to 70 accumulates five distinct PRB amounts. These stack permanently onto your base CPP pension. The total benefit continues for life with full inflation protection.
How much CPP Post-Retirement Benefit will I receive?
Maximum CPP PRB amounts for 2025 equal 2.5% of the maximum CPP retirement pension at your age. According to the Government of Canada, the maximum monthly PRB at age 65 is $49.39, representing full contributions on maximum pensionable earnings of $81,200.
Your actual CPP Post-Retirement Benefit depends on two factors:
- Earnings and contributions: Higher earnings generate larger benefits proportionally. Contributing half the maximum creates half the maximum CPP PRB. Part-time workers receive reduced benefits matching their contribution levels.
- Age factor: CPP PRB amounts increase 0.7% monthly after age 65 and decrease 0.6% monthly before 65. This mirrors CPP retirement pension age adjustments.
What Factors Determine PRB vs CPP Deferral Decisions?
Deciding whether to take PRB or delay CPP depends on looking at your own situation. Financial advisors suggest considering three important factors:
Health and longevity expectations
Delaying CPP until age 70 raises monthly payments by 42%. This option works well for people who think they will live longer. PRB is better for those who want more money now, especially if they are unsure about their health.
Contribution history gaps
Workers with incomplete CPP records benefit more from deferral. Additional working years can replace low-earning periods in pension calculations. Those with 39+ maximum contribution years gain little from deferral contributions.
Employment stability
PRB requires continued work and earnings. Uncertain employment prospects favour starting CPP without PRB commitments. Stable employment through age 70 supports either strategy.
According to retirement planning specialists, break-even analysis typically shows:
- Deferral wins for lifespans beyond age 82
- PRB provides better value for maximum earners
- Combined strategies work for partial deferral
What Happens to CPP PRB Upon Death or Disability?
CPP Post-Retirement Benefit follows different rules than regular CPP benefits for survivors and credit splitting. According to CPP legislation, four important limitations include:
- No survivor benefits: PRB payments stop when someone dies and do not go to their spouse. Only the basic CPP retirement pension provides benefits for the surviving spouse. The spouse cannot receive the PRB payments after the person passes away.
- No pension sharing: Current spouses cannot split PRB income for tax purposes. Pension sharing applies only to base retirement pensions earned before age 65.
- No credit splitting: Divorced spouses cannot divide PRB credits. Credit splitting covers only pre-retirement contributions.
- Disability considerations: Workers under 65 receiving PRB may qualify for Post-Retirement Disability Benefits if they become disabled. This adds $598.49 (2025 average) until age 65 (Source).
While the PRB offers valuable lifetime income for working retirees, it provides no survivor, spousal sharing, or credit splitting benefits, and is generally non-transferable, with limited exceptions only in cases of disability before age 65.
How does PRB affect my retirement planning?
The CPP Post‑Retirement Benefit (PRB) influences retirement planning in four ways:
Changes to Income Projections
Traditional retirement planning assumes CPP income stays fixed once you start receiving it. With PRB, your CPP income continues to grow throughout your 60s, which may affect withdrawal strategies and long‑term tax planning.
Tax Implications
PRB permanently increases your taxable income. For higher‑income retirees, this could trigger OAS clawbacks earlier. Be sure to factor in the tax cost of PRB when deciding whether to keep contributing.
Limited Estate Benefits
Unlike RRSPs, CPP PRB does not offer extra survivor benefits beyond standard CPP provisions. Spousal pension rules apply to the combined CPP and PRB amounts. Decisions about PRB should focus on your own longevity rather than inheritance goals.
Cash Flow Flexibility
Deferring CPP typically requires other income sources to cover living costs. PRB, however, lets you start CPP right away while still adding growth potential for future income. This can be particularly useful for those with limited retirement savings who need early cash flow.
How Does CPP Post‑Retirement Benefit Impact Other Government Benefits?
CPP Post‑Retirement Benefit can raise the total amount of money someone gets when they retire, which might change how much support they get from programs that depend on income. According to Service Canada, the main effects are:
- Old Age Security (OAS): PRB counts toward net income for OAS clawback calculations. The 2025 threshold starts at $81,761. Each PRB dollar reduces OAS by 15 cents above this limit.
- Guaranteed Income Supplement (GIS): Low-income seniors face GIS reductions from PRB income. Every PRB dollar reduces GIS by 50 cents for singles or 25 cents for couples.
- Provincial programs: Benefits like property tax deferrals, prescription coverage, and housing subsidies are considered PRB income. Thresholds vary by province.
While CPP PRB increases retirement income, it may reduce eligibility or benefit amounts for various government programs that consider income levels, making careful planning essential.
The Bottom Line
Canada Pension Plan Post-Retirement Benefit gives you a chance to boost your retirement savings even if you keep working. The 2025 changes to the Canada Pension Plan mean there’s more money available than before.
Whether this option is right for you depends on your personal situation, so it’s important to understand your choices so you can get the most out of your retirement income.
Keep in mind that once you turn 65, you can still change your plan if your life circumstances change.
FAQs about CPP Post-Retirement Benefit
Do I need to apply for CPP PRB?
No application is required. Service Canada automatically calculates and adds PRB based on your contributions while receiving CPP.
How is CPP Post-Retirement Benefit taxed?
CPP Post-Retirement Benefit forms part of your taxable CPP income. Combined amounts appear on your T4A(P) slip. Standard pension income splitting rules apply.
Does CPP Post-Retirement Benefit affect other government benefits?
PRB counts toward income-tested benefit calculations. Higher total CPP might reduce GIS eligibility or trigger OAS clawback.
Where does my CPP Post-Retirement Benefit payment come from?
CPP PRB integrates into your regular monthly CPP deposit. You won't receive separate payments.
What happens to my CPP Post-Retirement Benefit if I stop working?
Earned CPP PRB continues for life. Stopping work only prevents future PRB accumulation.
Can I receive CPP Post-Retirement Benefits if I'm already getting maximum CPP?
Yes. CPP PRB stacks on top of maximum CPP without limits. No ceiling exists on combined amounts.
When do CPP Post-Retirement Benefit payments actually start?
January 1st following your contribution year. First deposits typically arrive in April–June with retroactive amounts.
Is there a deadline to decide about CPP Post-Retirement Benefits?
No deadline, but key ages matter. At 65, you can opt out of contributions. At 70, all contributions stop automatically.
