Are you retired and thinking of going back to work? Will you reach retirement age soon, but are considering delaying it by a few years? Here are some employment incentives you should know about.
Work Income Supplement
If you have already contributed to the Quebec Pension Plan (QPP), you are entitled to a retirement pension from the age of 60. The amount of your pension depends on your work income, but also on your age when you apply for the pension. The amount of your pension increases for each month that you delay the start of payments. The full amount is reached when you turn 65, and the maximum amount when you turn 72.
Are you already receiving your retirement pension? You can work and continue to receive your pension. If you continue to contribute to the QPP, you are entitled to the Retirement Pension Supplement from the following year, for life. The longer you contribute, the bigger the Supplement.
Adults earning more than $3,500 a year must contribute to the QPP. However, since January 1, 2024, workers aged 65 or over can opt to stop contributing to the QPP.
Tax deductions
QPP contributions entitle you to a $3,500 deduction from your net income.
If you are in the work force, you are also entitled to the deduction for workers. An amount equal to 6% of your work income is deducted from your taxable income, up to a maximum of $1,315.
The Tax Credit for Career Extension allows you, from age 60, to pay no tax on a portion of your work income above $5,000:
- If you were between 60 and 65 on December 31, 2023, the maximum credit is $1,400. Your work income must not exceed $66,945.
- If you were 65 or over on December 31, 2023, the maximum credit is $1,540. Your work income must not exceed $69,745.
Work Premium
If you have work income and your family income is below a certain threshold, you may qualify for a Work Premium. This refundable tax credit can be paid to adults of any age, including those who have no tax to pay.
The amount of the Premium varies according to income and family situation. For example, for a single person who:
- Does not have severely limited capacity for employment: The maximum annual Work Premium is $1,095.27. Income must not exceed $22,794.72;
- Has a disability or a severely limited capacity for employment: the maximum annual Adapted Work Premium is $2,101.74. Income must not exceed $37,671.44.
Did you become ineligible for last-resort financial assistance when you returned to work? A Supplement to the Work Premium of $200 may be paid for each month in which your work income is at least $200, for a maximum of 12 months.
Would you like to have a clear picture of your options? The Work Income Kept on Retirement calculator allows you to compare your disposable income before and after your planned return to work.
Any questions or problems?
The Retraite Québec and Quebec.ca websites offer a range of tools and information to help you plan your retirement.
Are you dissatisfied with Retraite Québec or Revenu Québec services? Turn to the Protecteur du citoyen. Our services are free and there is no red tape.
