What is the Canada Pension Plan Child Rearing Provision?

The Child-Rearing Provision is an adjustment to your retirement pension based on years you didn’t work due to raising a child. 

To understand what the Child-Rearing Provision is, you first need to understand how the Canada Pension Plan (CPP) works.

The CPP is a monthly retirement benefit you receive once you’re over the age of 60, so long as you’ve contributed to it at some point.

One of the factors that influences how much CPP money you’ll receive after retirement is your average earnings over the span of your working life.

The thing is, if you had to work less or take time off work entirely to look after your children, it’s very likely that you’ll have a lower CPP monthly payment.

To help offset this, the government created the Child-Rearing Provision.

When you qualify for the Child-Rearing Provision, the government will exclude certain periods of time when calculating your pension amount.

These periods of time will be the months when you had little to no income because you were caring for one or more young children.

In their place, you’ll receive credits that amount to the average of your earnings for 5 years prior to the child being born or adopted.

This will help you increase the amount of your CPP payment for when you retire.

Father walking through the park with his son

Eligibility for the Child-Rearing Provision

You could qualify for the Child-Rearing Provision if:

  • Your dependent children were born after December 31, 1958
  • You were the primary caregiver of a dependent under 7 years old, which caused you to have lower income
  • Your family qualified for the Canada Child Benefit or received Family Allowance payments (family meaning you, your spouse or your common-law partner)

Definition

To be considered the primary caregiver, you must be the main person responsible for the child’s needs on a daily basis for the period of time in question.

How to Apply for the Child Rearing Provision

If you think you might qualify for the Child Rearing Provision, the next step is to apply for it.

The easiest way to apply is through your My Service Canada Account (MSCA).

For the online option, you need to register for My Account, and Service Canada will provide you with an access code to log in.

There are a few documents you’ll need to fill out:

Along with your application, you’re going to have to include your dependent child’s name, SIN, and date of birth.

If your dependent child was born outside of Canada, you’ll need to submit proof of the date they entered Canada.

You can also mail these documents to your nearest Service Canada office – the address is indicated on the form.

Frequently Asked Questions

  • How does child-rearing affect CPP?
  • How much is the CPP child benefit?

Tara Al-Khudairi is a freelance personal finance writer who has worked in the financial services industry since 2017. She graduated from McMaster University with a degree in Finance and is pursuing her CFA.

She has worked at a major Canadian financial institution in various client-facing advisory roles, starting as a bank teller and working up to a Client Services Associate within the Asset Management division. She specializes in simplifying concepts of personal finance for people of various financial backgrounds.

When she’s not examining the markets looking for the next SHOP.TO, she’s either practicing yoga, planning her next vacation, or has her nose buried deep in a book.