The Canada Pension Plan (CPP) is a cornerstone of retirement income for most Canadians — but it does not treat everyone equally. Due to structural features of how CPP benefits are calculated, Canadian women consistently receive lower CPP payments in retirement than men. Understanding why this happens and what you can do about it is essential financial planning for any Canadian woman.
CPP retirement benefits are based on two key factors: your average earnings during your contributory period, and how many years you contributed. The maximum CPP retirement pension in 2025 is approximately $1,364/month (for someone who contributed at the maximum level for 39 years). The average CPP payment for new retirees is substantially lower — approximately $758/month — and women's average is lower still.
The contributory period runs from age 18 to the year you start CPP (or turn 70). Years with low earnings drag down your average. Years with zero earnings are included in the calculation, which significantly reduces the average for women with career interruptions.
Women are far more likely than men to take time away from paid work for caregiving — maternity leave, extended parental leave, caring for children or aging parents. Each year away from paid work with no CPP contributions lowers the average earnings used to calculate CPP benefits. A woman who takes three years off in her 30s for child-rearing and two years in her 50s for eldercare could lose five full years of high-earning contributions from her CPP calculation.
Women are more likely to work part-time, either by choice or necessity due to caregiving obligations. Part-time earnings below the Year's Maximum Pensionable Earnings (YMPE) generate proportionally lower CPP contributions and benefits.
Lower earnings throughout a career mean lower CPP contributions and, ultimately, lower benefits. Even continuous contributors who never take a break receive less CPP if their earnings are consistently below male peers doing the same work.
The child-rearing dropout is the most important CPP provision for women. It allows you to exclude years from your CPP calculation when your earnings were low because you were the primary caregiver for a child under age 7. To qualify, your earnings must have been below the average wage, and you must have been the primary caregiver. This is NOT automatically applied — you must request it by contacting Service Canada and providing the necessary information.
CPP calculations automatically drop your lowest 8 years of earnings (17% of the contributory period, rounded up). This helps everyone, but disproportionately benefits women whose earnings records include more low or zero-income years.
Years when you received CPP disability benefits can also be excluded from your earnings calculation, further protecting women who faced health-related career interruptions.
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Get KOHO Free — Use Code 45ET55JSYAIf you were the primary caregiver for a child under 7 and had low or no earnings during that period, request the child-rearing dropout when you apply for CPP. Check your Statement of Contributions through My Service Canada Account to see how your earnings history looks and whether the dropout has been applied.
CPP benefits increase by 0.7% for every month you delay past age 65, up to a 42% increase at age 70. For women with longer lifespans — and therefore longer periods of collecting CPP — delaying to 70 is frequently the mathematically optimal choice. The breakeven point versus starting at 65 is typically around age 83.
If you return to full-time work after a career break in your 40s or 50s, those high-earning years will be included in your CPP calculation and can replace earlier low-earning years (beyond what the dropout provisions cover). Continuing to work and contribute at higher earnings after a break improves your CPP entitlement.
Since 2019, CPP has been gradually enhanced. Workers contributing under the enhanced CPP (post-2019) will ultimately receive up to 33% of average earnings (up from 25%). Women entering the workforce now or with significant remaining working years will benefit more from the enhancement than older cohorts.
If your spouse passes away and they contributed to CPP, you are entitled to a CPP survivor pension. This can partially compensate for the income loss — though it is capped and combined with your own CPP. See the Survivor Benefits guide for detailed amounts and application process.