Your Canada Pension Plan (CPP) Abroad
The Canada Pension Plan (CPP) is a contributory plan based on your earnings, not your residency. Therefore, you can generally receive your CPP benefits no matter where you live, provided you have made at least one valid contribution.
How to receive your CPP payments abroad
- Direct Deposit: You can often arrange for direct deposit of your CPP payments into a foreign bank account, potentially converted to local currency. Maintaining a Canadian bank account for deposits and transferring funds yourself is another option.
- Stay Informed: Remember to update Service Canada with any changes to your address or banking details to avoid disruptions.
International Social Security Agreements
Canada has social security agreements with numerous countries. These agreements can prevent the loss of pension entitlements if you have worked in both Canada and a partner country by allowing the combination of contribution periods to meet eligibility requirements. This may result in receiving a portion of your pension from each country.
Your Old Age Security (OAS) Pension Abroad
The Old Age Security (OAS) pension is residency-based and government-funded, making the rules for receiving it abroad different from CPP.
Eligibility for OAS payments outside Canada
- 20-Year Residency Rule: You generally need to have lived in Canada for at least 20 years after the age of 18 to receive OAS indefinitely while living outside the country.
- Less than 20 years: If your Canadian residency after age 18 is less than 20 years, your OAS payments will stop if you are outside Canada for more than six months. Contact Service Canada upon your return to resume payments.
- Social Security Agreements: Time spent in countries with social security agreements can sometimes count towards the 20-year residency requirement, with your OAS amount prorated based on your years in Canada.
Tax Implications and Important Considerations
Withholding Tax and Tax Treaties
As a non-resident, your Canadian government pension payments are subject to a non-resident withholding tax, typically 25%. This rate can be reduced or eliminated depending on the tax treaty between Canada and your country of residence.
Comparison of Canadian Pensions for Non-Residents
| Feature | Canada Pension Plan (CPP) | Old Age Security (OAS) | Guaranteed Income Supplement (GIS) |
|---|---|---|---|
| Basis | Contributory; based on earnings | Residency; government-funded | Residency; low-income seniors |
| Eligibility Abroad | Yes, regardless of how long you contributed. | Requires 20+ years of Canadian residency after age 18, or social security agreement. | No, payments stop after 6 consecutive months outside Canada. |
| Payment Continuation | Continues indefinitely, anywhere in the world. | Stops after 6 months abroad if residency requirement is not met. | Stops after 6 months abroad. |
| Payment Method | Direct deposit to foreign banks available in many countries. | Direct deposit to foreign banks available in many countries. | N/A (not payable abroad) |
| Withholding Tax | Subject to non-resident tax, potentially reduced by treaty. | Subject to non-resident tax, potentially reduced by treaty. | N/A |
Private pensions and other benefits
Private employer pensions can typically continue to be paid while you live abroad, but you must update your contact and banking information with the plan administrator. Notify your provider of your non-resident status for correct tax withholding. Benefits like the Guaranteed Income Supplement (GIS) and provincial health care are tied to residency and will cease if you move away for an extended period.
Conclusion
Moving abroad does not automatically mean losing your Canadian pension. Your CPP is portable, based on your contributions. OAS, however, requires a minimum of 20 years of Canadian residency after age 18 to continue receiving payments overseas. GIS and provincial health coverage are residency-based and will cease if you leave Canada. Proper planning, notifying Service Canada, understanding tax implications, and utilizing international social security agreements are crucial for a smooth retirement abroad.
For further details on social security agreements, visit the official Government of Canada website.
What happens if I move to another country with my Canadian pension?
This article outlines the distinct impacts on your Canada Pension Plan (CPP), Old Age Security (OAS), and Guaranteed Income Supplement (GIS) when you move abroad, covering eligibility, international agreements, and tax considerations.
How does moving abroad affect my Canada Pension Plan (CPP)?
Moving abroad does not cause you to lose your Canada Pension Plan (CPP). Since CPP is a contributory plan based on your earnings and contributions, you can receive your payments regardless of your country of residence. You must, however, inform Service Canada of your move and update your banking information.
What is the residency requirement for Old Age Security (OAS) outside of Canada?
To continue receiving your Old Age Security (OAS) pension while living outside of Canada, you must have lived in Canada for at least 20 years after turning 18. If you have lived in Canada for less than 20 years, your OAS payments will stop if you are away for more than six consecutive months.
Can I still receive the Guaranteed Income Supplement (GIS) if I move to another country?
No, the Guaranteed Income Supplement (GIS) is a residency-based benefit that is not paid to individuals living outside of Canada. If you leave Canada for more than six months, your GIS payments will be stopped.
How are my Canadian pension payments taxed if I live abroad?
As a non-resident, your Canadian pension payments are subject to a non-resident withholding tax. The default rate is typically 25%, but this may be reduced or eliminated depending on whether Canada has a tax treaty with your new country of residence.
Do international social security agreements help with Canadian pensions?
Yes, international social security agreements can help you qualify for Canadian pensions if you have worked in both Canada and a partner country. These agreements allow the time you spent working and contributing in the other country to count towards Canadian eligibility requirements for CPP and OAS.
How do I receive my Canadian pension payments while living overseas?
You can arrange for direct deposit of your CPP and OAS payments to a foreign bank account in the local currency, though this service is not available in all countries. Alternatively, you can maintain a Canadian bank account and have your payments deposited there.
Do I need to notify Service Canada if I am moving abroad?
Yes, you must notify Service Canada of your move and any changes to your address or banking information. This is especially important for OAS recipients to avoid overpayment if they don't meet the 20-year residency requirement.
What about private pensions from former Canadian employers?
Private pensions from former Canadian employers are generally separate from government benefits and can continue to be paid abroad. However, you must inform your plan administrator of your non-resident status and new address for correct tax withholding.
What about my Canadian provincial health care if I move abroad?
Provincial health care coverage is tied to residency and will typically cease if you are outside your province for more than six or seven months. It is recommended to secure private health insurance for any medical care needs while living overseas.
Can I appeal a decision to stop my Canadian pension benefits?
Yes, you have the right to appeal a decision made by Service Canada regarding your benefits. If you believe your eligibility has been miscalculated or if payments were wrongly stopped, you can initiate a reconsideration process.
Do I lose my Canadian pension if I am a non-citizen or non-resident?
No, as long as you contributed to the Canada Pension Plan (CPP) while working in Canada, you are entitled to a benefit regardless of your citizenship or residency status. For Old Age Security (OAS), the eligibility is based on residency, not citizenship.
