Canadian Social Security Agreements
Individuals who have spent significant periods of time in two countries may, as a result, fail to meet the residence and/or contribution conditions needed to claim certain social security benefits. In these situations a social security agreement between the two relevant countries can be used to help an individual become eligible to receive these benefits.
Canada currently has social security agreements with more than 50 countries worldwide. The exact conditions of these agreements will vary from country to country.
A social security agreement can help individuals to qualify for certain Canadian social security benefits, including the Old Age Security (OAS) pension and Canada Payment Plan (CPP).
The Old Age Security pension
To be eligible to receive an OAS pension an individual must:
· Be at least 65 years old, and
· Be a Canadian citizen/ legal resident at the time the OAS pension application is received or on the day before they left Canada (if they are not currently a resident of Canada), and
· Have resided in Canada for at least 10 years since the age of 18 (if the individual is living in Canada), or
· Have resided in Canada for at least 20 years since the age of 18 (if the individual is living outside Canada)
If an individual fails to meet these requirements, a social security agreement may help them to qualify for the benefits anyway. Some social security agreements allow an individual to count the time spent living abroad in another country towards the minimum residency years required.
Canada Pension Plan
The Canada Pension Plan also has a variety of conditions that need to be met in order to receive the benefits of the CPP. To be eligible to receive the death or survivor benefits an individual must make contributions to the CPP for at least 1/3 of the years of their contributory period.
Like the OAS pension, if an individual has failed to qualify for these benefits because at some point they have moved between Canada and another country, the Social Security Agreement can be used to help them qualify for the benefits of the CPP. Under some social security agreements, periods of contribution to a foreign pension program can be counted as contributions to the CPP.
The CPP and OAS applications require an individual to list all the other countries that they have previously or are currently living/working in. This information will then be used if the individual fails to meet the conditions to receive CPP and/or OAS payments based on their Canadian residence or contributions, to determine whether a social security agreement will benefit them.
Social Security Benefits
It is important to note that a social security agreement cannot be used to determine the value of the benefits an individual is entitled to receive. Instead the value is calculated using:
· Periods of residency in Canada, and/or
· Any contributions made to Canadian social security benefit plans
Contact us for expert Canadian Tax advice