A quick look at changes coming to Canada Pension Plan, and Canadian wallets

OTTAWA – Here are the forthcoming changes to the Canada Pension Plan agreed to Monday by the federal government and most of the provinces and territories:

— Increasing the income replacement rate to one-third from one-quarter, meaning the maximum CPP benefit will be about $17,478 instead of about $13,000.

— Increasing premiums on employers and employees by one per cent, meaning an extra $408 a year coming off paycheques.

— Increased premiums will be phased in over seven years, starting in 2019.

— Increasing by 14 per cent to $82,700 the maximum amount of income subject to CPP.

— Expanding the refundable tax credit known as the federal working income tax benefit, to help low-income Canadians offset the increase in premiums.

— New portion of employee contributions to CPP will be tax deductible (not a tax credit).