The Pressing Question: Does CPP Expansion Help Low Earners Kevin Milligan ~ Vancouver School of Economics ~ University of British Columbia

"The Pressing Question: Does CPP Expansion Help Low Earners,"

with Tammy Schirle
CD Howe e-brief 241. July, 2016.
Google Scholar entry.


The agreement-in-principle between Ottawa and the provinces on an expanded Canada Pension Plan (CPP) will provide much larger CPP benefits in the future: one-third larger for low- and middle-earning workers, and 50 percent larger for high earners.

Our analysis shows that the expanded CPP will deliver a serious boost to the gross CPP replacement rates of most young Canadians starting out their careers in the new program. However, many low earners don't need extra coverage and will see much of their boosted CPP disappear because of clawbacks that reduce the income-tested Guaranteed Income Supplement (GIS).

This CPP-GIS interaction concern can be fixed by shielding low earners from expanded coverage and required extra contributions, or by exempting the expanded CPP benefits from the income test for GIS.

Paper via C.D. Howe here.
Paper via SSRN here.

Other writing on CPP Reform: here.

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