New CPP Rules

The Canada Pension Plan is going through some major changes in 2011, in an effort to make it fairer to those who collect pensions or are about to collect pensions. These changes may have a large impact on  you if you are
collecting or going to collect CPP, so here is some information to help you understand these new policies.

Changes To The Contribution Rules

As of right now, employees who are under the retirement age of 65, who are working while receiving their pension cannot contribute to their own pension. Under the new changes, you will have to make payments to your CPP, even while you are collecting your CPP. You will receive an additional benefit gradually increasing your CPP pension if you do this. If you are over the age of 65 while working, you currently cannot contribute to your CPP. However, under the new rules, employees can choose to make CPP contributions, which will then make it a requirement that your employer also put money into your CPP.

Changes To The Drop-Out Provision

There will also be a change to the general low earnings drop-out portion of the CPP. The CPP allows for certain years of low and no earnings because it uses a career average plan. At this time, 15 per cent of your potential career earnings are being disregarded under this method. This can be good because that 15 per cent is the lowest amount you earned over your working life, and by removing it you earn more on your CPP. Under the new changes, that will be moved to 16 per cent in 2012, with a maximum of 7.5 years being dropped. In 2014 that will again increase to 17 per cent allowing for a maximum of eight years to be dropped.

Stop Working And Work Cessation Test Will No Longer Be required

In order to qualify for CPP right now, you need to stop working or reduce your income and  pass the work cessation test. This test states that an employee must not earn  more than a certain amount within the month that the CPP starts to be paid, as well as the month before. This amount is currently set at $900, but with the new
rules, this test will be removed from the CPP guidelines.

Changes To The Early and Late Pension Adjustment Rates

There will also be changes to the pension adjustment rates for both early and late retirement. At this time, if you begin collecting before the age of 65, the pension is reduced by .5 per cent per each month before your 65th birthday. So, if you retire 10 months before your 65th birthday, you lose five per cent off your pension. Likewise, if you start your pension after the age of 65, you collect a .5 per cent increase on your pension per each month after your 65th birthday to a maximum of the age of 70. Under the new rules, the .5 per cent reduction will be increased to .6 per cent and the .5 per cent increase will be increased to .7 per cent.

For More Information, Please visit Service Canada CPP Website.

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Go west young man was often heard at the turn of the century for people wanting to find their fortune in the young country of Canada. Well, during the greatest recession since The Great Depression, the West is the place to be. According to a new Provincial Trends Report from Scotia Economics, the west is going to be the leader in Canada for the economic strength of the country in 2011, and that is also going to continue for many years.

The reason for this is simple. The west comprises British Columbia, Alberta, Saskatchewan and Manitoba, while the east is Ontario, Quebec and the Maritimes. The east sits over the eastern coast of the United States and the biggest economic centre of the USA. Therefore, the east is more interconnected with the United States economy, especially with manufacturing. With the implementation of Buy American in the United States, as well as the intense recession in the country, the east is suffering because the United States is suffering.

However, the west is doing much better. British Columbia is benefiting from trade with China, Alberta and Saskatchewan have oil and energy, while Manitoba has natural resources that are in high demand.

The province that will lead the country is of no surprise, it is Alberta, with a growth of 3.5 per cent, while Saskatchewan will follow behind at 3.3 per cent. This is not what Ontario and Quebec can expect to see. Both will have less than two per cent growth in 2011 and beyond, a big turnaround from when those two provinces were the economic engines of the country.

The oil sands are helping Alberta stay strong, even with the backlash against them. Oil is also one reason why a historic have-not province is now playing with the big boys out west. While the east is not expected to do well, Newfoundland and Labrador is expected to do extremely well, with a growth of 3.1 percent. The reason for this is the oil and gas off the coast of the province, as well as its very rich deposits of iron and nickel.

Canada as a whole will benefit from the west and Newfoundland because they will help keep the Canadian economy moving along and offset the issues being experienced in the east and central Canada, including the over-priced loonie and less trade with the United States.

Ontario and Quebec will be below two per cent in growth, as was stated, but the Maritimes should see about two per cent growth in 2011, with the Maritimes being hit less than the rest of the country. Other growth projections for provinces not already mentioned dare 2.5 per cent for Manitoba and 2.8 per cent for British Columbia.

All in all, thanks to the strong economy of the west, Canada will do okay in the next few years, even as the United States continues to struggle through a difficult economic time called The Great Recession.

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What To Expect From Your Lawyer When Buying A Condo?

What Does A Condo Lawyer Do?
When you are buying a condo, you need to have a lawyer because they will help you get through all the complicated parts of the condo purchasing process, helping you make sure you get exactly what you want when you buy a home.

The lawyer is going to talk to you about several things that will be of interest to you, many of which you may not know about. Knowing these things will help ensure you get what you want out of your purchase.

HST is something that many people do not understand, nor like. It is also something to consider when you are buying a condo. There is an HST Rebate that is meant to give you money back on large purchases like a house, but if you don’t know how to file for this rebate, you could lose out big time. A condo lawyer can help you get the rebate, which will help you pay for that new condo of yours.

The contract can be very complicated and you may feel as though it is written in a different language. A condo lawyer is going to be able to go over that contract with you and give you help in understanding what is being said in the contract. One of the biggest mistakes that people make when they are buying a house or a condo is they just buy the condo and sign the contract without reading it. However, did you know about things like caps? Just like a salary cap in the NHL, a cap on fees keeps you from paying too much. Cap costs have gone up by nine times in ten years, but if you just sign a condo contract without having a lawyer look at it first, you could end up paying as much as $10,000 more than what you needed to, just in closing cap costs like gas hook ups.

There are going to be several fees associated with your purchase and developers love these fees because it is essentially free money for them. As a result, if you don’t read the condo contract properly, you could end up paying thousands in useless and unwanted fees. A condo lawyer knows what developers try to do and they know how to keep you from paying for fees. Everything from purchase fees to fees on utility hookups are going to be charged, and you don’t want that to happen. Have the lawyer look over the contract carefully because the savings you get from not paying too much for your condo will offset the amount you pay for a lawyer immensely.

Here are a few things you can expect from a lawyer:

- Explain, prepare and register all related legal documents, such as purchase contract, title, HST rebate etc.
- Scrutinize that there are no liens, easements, covenants, unpaid taxes, unpaid utilities etc against the condo.
- Arrange title insurance protection, review all the closing papers you need to sign, and ensure your registered
ownership does not make you liable for more than what you have accepted.
-  Explain and advice you on your rights, obligations and protect your interests in case of a dispute.
- Assist you to close the transaction through province’s electronic registration system.

Before you hire a condo lawyer, you should talk with friends and families to find out any lawyers they have used and whether or not you should need one. You can also talk to your realtor but it is better to get a lawyer who is not affiliated with a realty agency. Finding a good condo lawyer will ensure you do not pay too much and you get exactly what you paid for.

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Guaranteed Income Supplement (GIS)

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Canada Pension Plan or CPP

Old Age Security pension or OAS

As we get older in Canada, there are many things in place to ensure that you have money after you retire. The Canada Pension Plan, which you pay into, will help pay those bills, as will Old Age Security, which is taxable. However, if you are a low-income pensioner, with very little or even no income, then you can look at supplementing the Old Age Security you receive through the Guaranteed Income Supplement (GIS). GIS is non-taxable and the amount you receive will depend on how much you make, whether or not you are married and the age of your spouse.

Currently, the maximum you can receive through the GIS program is $597.53 per month, and this is if you have no other source of income. If you and your spouse both collect from the GIS program, then you can each receive a maximum of $392.01.

Since your annual income changes each year, and since the GIS program is based on your income, you need to renew your GIS every single year.

Most seniors can easily renew their GIS automatically by filing their income tax return by April 30. If a tax return is not filed because there is no income, then you can request a renewal application to be sent to you. Once you do this, you will receive a letter in July that explains to you the new amount of your monthly payment.

In order to qualify for the GIS, you need to be first eligible for the Old Age Security pension, meaning you need to be over 65 years of age, a Canadian citizen, and have lived in Canada for the past 10 years.

Currently, the Old Age Security Act provides a GIS earning exemption of $3,500, up from $500 in 2007. This means that a single pensioner who earns $3,500 or more, will be entitled to keep an additional $1,500 in their annual GIS benefits.

If you get married, separate from your spouse, or your spouse dies, then you must contact the GIS program to let them know about the change. If you separate due to reasons beyond your control, like your spouse is put in a nursing home, then you can both be considered a single person and that will give you a larger monthly payment.

Since the GIS program is based on income, what counts as income then? Here is a quick rundown:

1. Canada Pension\Quebec Pension Plan
2. Private pension income
3. Foreign pension income
4. RRSPs cashed during the year.
5. Employment insurance
6. Interest on savings
7. Capital gains and dividends
8. Rental property income
9. Employment income

If you want to get an application for the program, you need to contact 1.800.277.9914

The GIS program can help you get a little extra money to live on each year, making being in your retirement and golden years that much easier for you. All you need to do is apply and start receiving your benefits from the government.

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