Contributions to the QPP will be made optional from age 65. (Photo: 123RF)
QUEBEC BUDGET. The Government of Quebec is making certain changes to the Quebec Pension Plan (QPP) in an attempt to keep more retirees in the labor market.
The first amendment will allow people to push back the maximum age for applying for a pension from 70 to 72 years old.
Finance Minister Eric Girard also indicated that contributions to the QPP will be made optional from age 65, as well as the establishment of pension protection for people aged 65 and over who work full time. partiel.
Break in contributions
A worker may choose to stop contributing to the QPP only once a year. He will be entitled to a revocation of this choice, but will then no longer be able to reconsider his decision before the end of the year.
He may take advantage of this choice as of the day following his 65th birthday. He will then have to fill out a form that he will have to give to his employer. The choice will then take effect on the first day of the month following the submission of the form to the employer, who may stop deducting QPP contributions on the first pay of the month following the request.
In the case of a self-employed worker, the form must be submitted to Revenu Québec.
The Ministère des Finances estimates that a worker with a taxable work income of $15,000 would keep $606 more annually ($10,457 instead of $9,851) by not contributing to the QPP, an addition of 4%.
The Act will also be amended so that QPP contributions cease before a person’s 73rd birthday.
Labor shortage
The Fédération des chambres de commerce du Québec (FCCQ) sees this reform of the RRQ in a good light, a reform for which it has already been campaigning for several years.
“The optional contribution will put hundreds of dollars back in the pockets of workers,” says FCCQ CEO Charles Milliard. We still believe that it is essential to allow even greater tax holidays for workers over 65. The house of labor is on fire, and it’s high time for action. The government might have taken part of the $9 billion in tax cuts and used it to encourage older workers to become even more active in the labor market.
The CEO of the Quebec Retail Trade Council (CQCQ), Damien Siles, adds that the changes to the QPP will allow seniors who want to work more to find their account.
“We have 50% of our member companies that have between 1 and 50 employees who are at their wit’s end,” he says. They don’t have enough staff and have to work hard to get there: accounting, human resources management, service, etc. Yet they have employees who would like to work more, but are held back by tax measures. We can now offer them the possibility of working longer without being penalized.
This might also have repercussions on the opening hours of shops, which are sometimes reduced due to lack of adequate staff.
Accompaniement
Charles Milliard underlines the presence of a measure which goes a little unnoticed in the budget, but which might have a significant impact.
To encourage the deferral of pension payment, the government is announcing that Retraite Québec will send personalized communications to contributors before their 60th birthday to better inform them of the advantages and penalties related to their choice.
“People do not necessarily understand the implications of this choice, submits Charles Milliard. People can end up with a penalty of over 30% for over 25 years if they take their pension at age 60. Many receive the first communication and believe they must then take it. This commitment to better support people is important, because we are living longer and spending longer.”
Read also
Tax cuts of $9.2 billion to come for Quebecers
Workforce: progress, but much remains to be done
RRQ: changes for retired workers
A new tax holiday for carrying out major investment projects
$1.4M for the regions, the main part going to the food sector
The government wants to democratize access to tax-advantaged funds
Connectivity: bringing the 5G network to the regions
Almost nothing to improve the offer on the real estate market
