Retirement Security

Canada’s unions say they hope finance ministers are fixing CPP inequities

December 12, 2017

Canada’s unions say they are encouraged that Canada’s finance ministers are working to strengthen the Canada Pension Plan and hope that means parents who take time off work to raise children and workers with disabilities will not be penalized.

A statement issued by Canada’s finance ministers today promises “to provide greater benefits to parents whose income drops after the birth or adoption of their child [and] to persons with disabilities.”

“We were very surprised to learn that child-rearing and disability protections weren’t included in last year’s hard-won CPP expansion,” said CLC President Hassan Yussuff.

“For 18 months we’ve called on the government to fix the problem by fully protecting workers with disabilities and workers who take time off work to raise their children,” he added.

Unions and women’s groups fought for years to include protections that ensured that parents who took time off to raise children – mostly women – could exclude or “drop-out” periods of low and zero earnings from the calculation of their retirement benefit.

A disability drop-out excludes periods in which a worker has become severe and chronically disabled and is receiving CPP disability benefits.

When the finance ministers agreed in June 2016 to expand the CPP, unions believed these drop-outs would continue to apply in the enhanced benefit. They didn’t.

“We’ll be asking for more details on what the finance ministers are planning,” said Yussuff.

“We know that including these protections in the expanded CPP can mean thousands of dollars more in retirement for parents – especially women – and workers who lost income because of injuries or disabilities, and we want to ensure this problem is fixed once and for all,” he added.

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