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Normandin Beaudry

The 2004 social security programs parameters

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There, in black and white

NB Bulletin Vol. 6 N. 11, December 2003

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 2004 budget.

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

The Yearly Maximum Pensionable Earnings (YMPE) for year 2004 will be $40,500-an increase of 1.5% over the 2003 YMPE ($39,900). The basic exemption is not modified and remains at the same level of $3,500, applicable since January 1st, 1998. Employee and employer contribution rates will remain at 4.95% of contributory earnings in 2004 for an annual maximum contribution of $1,831.50. The maximum retirement pension at age 65 is set at $9,770 for 2004, based on the YMPE average over the last five years.

Employment Insurance (EI)

On November 25, 2003, the government of Canada confirmed a 12-cent Employment Insurance premium rate reduction effective January 1st, 2004, in accordance with the announcement made in the federal budget of February 18, 2003. The employee premium rate for the upcoming year will be reduced from $2.10 to $1.98 per $100 of insurable employee earnings. For employers, the premium rate will be reduced from $2.94 to $2.77, which is 1.4 times the employee rate outlined above. The maximum insurable earnings will remain at $39,000 for 2004.

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 a weekly indemnity for at least 15 weeks.
Type 4 : SCP providing a weekly indemnity for at least 52 weeks (this reduction is only available to employers of public and para-public sectors of the province of Quebec).

Employer premium rates as of January 1st, 2004


TypeRegular
rate
Reduction
rate 1
Reduced premium
rate for 2004 2
Employer
premium factor 3

1$2.77$0.22$2.55 1.289
2$2.77$0.32$2.45 1.238
3$2.77$0.30$2.47 1.248
4$2.77$0.34$2.43 1.228

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 $1.98 per $100 of insurable employee earnings.

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

Régime d’assurance maladie du Québec

The current contribution rate will remain unchanged for the year 2004. This rate is set at 4.26% for companies with a total payroll of more than $5 million and at 2.70% for those with a total payroll of less than $1 million and which are eligible for the reduction program. For eligible companies which have a total payroll of more than $1 million but less than $5 million, the rate is a function of total payroll and ranges from 2.70% to 4.26% of total payroll according to the following formula:

2.31% plus (0.39% of total payroll divided by $1 million).

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

The maximum earnings for the income replacement benefit will increase from $53,500 to $55,000 for the year 2004.

Commission des normes du travail (CNT)

The current contribution rate will remain unchanged for the year 2004, and is set at 0.08% of earnings subject to contribution. The earnings subject to contribution will increase from $53,500 to $55,000 for 2004.

Since July 1st, 2000, an additional contribution of 0.12% of earnings subject to contribution must also be paid by employers of the clothing industry governed by a decree.

 

Please feel free to contact us for additional information.

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