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Normandin Beaudry

Social security programs

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There, in black and white

NB Bulletin Vol. 4 N. 14, December 2001

We are pleased to inform you about the latest developments regarding the main parameters of the major social security programs to assist you in planning your budget for the year 2002.

The Quebec Pension Plan (QPP) and the Canada Pension Plan (CPP)

The Yearly Maximum Pensionable Earnings (YMPE) for the year 2002 will be $39,100-an increase of 2.1% over the 2001 YMPE ($38,300). The basic exemption is not modified and remains at the same level of $3,500, which is applicable since January 1, 1998. Employee and employer contribution rates will rise to 4.7% of contributory earnings in 2002 for an annual maximum contribution of $1,673.20. Maximum retirement pension at age 65, based on the average of the YMPEs over the last five years, is set at $9,465 for the year 2002.

Quebec Health Insurance Plan (RAMQ)

The current contribution rate will remain unchanged for the year 2002. This rate is set at 4.26% for companies with a total payroll of more than $5 million. For companies which have a total payroll of less than $5 million and which are eligible to the reduction announced in the 1998 provincial budget, the rate depends on total payroll-ranging from 2.70% to 4.26% of total payroll.

If you would like more information about your eligibility to the reduction or about the formulas used to calculate applicable rates for your company, you can consult the news bulletin 98-8 issued by the Ministère des Finances du Québec on December 22, 1998. This bulletin is available in English and in French at the Ministry´s website at www.finances.gouv.qc.ca

Commission de la santé et de la sécurité du travail (CSST)

The maximum earnings for the income replacement benefit will increase from $51,500 to $52,000 for the year 2002.

Employment Insurance (EI)

On November 30, 2001, the government of Canada announced a 5-cent Employment Insurance premium rate reduction effective January 1st, 2002.

The employee premium rate for the upcoming year will be reduced from $2.25 to $2.20 per $100 of insurable employee earnings. As for employers, the premium rate will be reduced from $3.15 to $3.08, namely, 1.4 times the employee rate outlined above. The maximum insurable earnings will remain at $39,000 for 2002.

Employer contributions can be reduced further for employers offering a salary continuation program (SCP) registered with the Employment Insurance Commission. There are four types of SCPs each offering a unique Employment Insurance premium rate reduction.

Type 1: SCP based on the accumulation of paid sick days of at least one day per month and a maximum of at least 75 days.
Type 2: SCP based on the accumulation of paid sick days of at least one day and 2/3 per month and a maximum of at least 125 days.
Type 3: SCP providing weekly indemnities for at least 15 weeks.
Type 4: SCP providing weekly indemnities for at least 52 weeks.

Employer premium rates as of January 1st, 2002


 

Type Regular
rate
Reduction
rate¹
Reduced premium
rate for 2002²
Employer
premium factor³
1 $3.08 $0.21 $2.87 1.305
2 $3.08 $0.30 $2.78 1.264
3 $3.08 $0.29 $2.79 1.268
4 $3.08 $0.32 $2.76 1.255

¹ Premium rate reduction per $100 of insurable employee earnings.
² Employer premium rate per $100 of insurable employee earnings.
³ Premium factor to be applied to the employee premium rate of $2.20 per $100 of insurable employee earnings.

The reduced premium rates are applicable for one complete year. In the event a plan is registered within the year, an adjustment will be applied to the premium rate in proportion to the time of registration.

 

Please feel free to contact us for additional information.

514.285.1122
 
630, René-Lévesque Blvd. West, 30th floor
Montreal, Quebec, H3B 1S6