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News Bulletin

A look at … 2014 Government Benefits

Canada Pension Plan (CPP) Contribution Rates, Maximums and Exemptions

Chart outlining CPP Contribution Rates, Maximums and Exemptions

New contribution levels have been announced by the Canada Revenue Agency for the Canada Pension Plan (CPP). The year’s maximum pensionable earnings, on which CPP contributions are based, has been increased from $51,100 in 2013 to $52,500 in 2014. The maximum CPP contribution is $2,425.50 in 2014 compared to $ 2,356.20 in 2013.

The CPP rate remains unchanged at 4.95% of pensionable earnings. This means that CPP employee contributions will be deducted at a rate of 4.95% up to a maximum contribution level of $2,425.50.

The basic exemption amount for 2014 remains at $3,500. Individuals who earn less than that amount do not need to contribute to the CPP.

Canada Pension Plan Payment Rates

Chart outlining Canada Pension Plan Payment Rates

Employment Insurance (EI) Premium Rates

The federal government has announced it will increase the annual maximum insurable earnings from $47,400 to $48,600 effective January 1, 2014.

This will result in an increase of $13 per week to the Employment Insurance (EI) weekly maximum benefit. Beginning January 1, 2014, the EI weekly maximum benefit will increase to $514 per week ($48,600 at 55% over 52 weeks).

Claimants who are currently receiving short term disability benefits, where Weekly Indemnity plan has a maximum equivalent to EI, their weekly benefit will remain at $501 as this was the maximum benefit at their time of claim. Weekly indemnity plans that have a maximum set at the EI maximum, rather than at a specific amount, will automatically increase to $514 effective January 1, 2014.

If your plan has a specific dollar maximum that is less than the EI weekly maximum of $514 per week, and you participate in the EI premium reduction program, you will need to amend your plan to at least $514 per week in order to remain eligible for the program. You also may wish to consider amending your plan to a maximum that is automatically adjusted to the EI maximum; this will avoid the need for future amendments whenever the EI maximum changes.

For more information please contact your Mosey & Mosey representative if you have questions about this change or its impact on your benefit plan.

Employment Insurance (EI) Premium Rates

Chart outlining Employment Insurance (EI) Premium Rates

Chart outlining Employment Insurance (EI) Premium Rates

Sources:
Canada Revenue Agency www.cra.gc.ca
Service Canada http://www.servicecanada.gc.ca
This bulletin is produced by Mosey & Mosey for information purposes only. Information contained in this publication does not constitute specific advice and should not be used independently in formulating business decisions. Please contact your Mosey & Mosey representative for specific consulting advice.
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Email: dwalker@mosey.on.ca, www.moseyandmosey.com