Unlike RRSP contributions, CPP contributions are mandatory payments made throughout one’s career in Canada. Our clients are sometimes concerned that they will not be eligible to collect CPP if they are living in the US at the time when they would like to begin receiving payments. Clients have similar concerns about their eligibility to receive Old Age Security (“OAS”) payments from the Canadian government after they become US residents.
Fortunately, non-residents of Canada typically remain eligible for CPP and OAS payments. (It should be noted, though, that in order to receive OAS payments, a snowbird who has become a US resident must have lived in Canada for at least 20 years after turning 18.)
There are, however, potential cross-border pension payment limitations that may affect Canadians who move to the US and continue to work south of the border. Such individuals may work for enough years in the US to earn US Social Security income in addition to CPP payments. One limitation results from the Windfall Elimination Provision, a US domestic law that allows the US government to claw back Social Security payments of a US resident who earns CPP income.
We work with our clients to balance the competing cross-border pension rules that may exist in Canada and the US and, moreover, to advise on planning opportunities.