Pay equity and the Régie des rentes du Québec
This concerns you if you work or worked in:
- the health and social services network;
- the education sector;
- the public service.
A pay equity agreement or a revised agreement will entitle you to receive a retroactive pay equity payment, subject to certain conditions.
Pay equity and the Québec Pension Plan (QPP)
The payments made under a pay equity program include salary adjustments for previous years. They may also include interest.
Effects on QPP contributions
The salary portion is considered earnings subject to the Québec Pension Plan. QPP contributions are calculated based on the earnings for the year in which they are received, even if they are salary adjustments for previous years.
Contributions to the QPP will be made for a retroactive pay equity salary adjustment if your total employment earnings for 2011 are greater than the general exemption of 3 500 $, up to the maximum pensionable employment earnings, which is 48 300 $ in 2011.
Contributions must be made to the QPP even if you are already receiving a retirement pension under the Plan. If you are receiving a disability pension, you do not have to make QPP contributions. If contributions were made, they will be refunded to you at the end of the year by Revenu Québec.
Effects on QPP benefits
Contributions related to a pay equity program will be recorded under your name in the Record of Contributors of the Québec Pension Plan and will be taken into account in the calculation of your retirement pension.
If you are receiving a retirement pension, any new QPP contributions will increase the amount of your pension under the Plan. The additional earnings on which you contribute in 2011 will increase the amount of your pension as of January 2012.
If you receive a retroactive payment and you are collecting a surviving spouse's pension, the amount of the pension will not change since it was set based on the deceased spouse's contributions. Similarly, if a retroactive payment is made with regard to a deceased person, the pension currently being paid to the surviving spouse will not be changed because salary adjustments are taken into consideration in the year they are received and because the reference period used to calculate the pension ended at the time of death.
A disability pension will not change because no QPP contributions will be made for the retroactive pay equity adjustment.
Pay equity and child assistance
Since it increases your family income, a salary adjustment can have an effect on your child assistance payments.
Child assistance payments are calculated annually based on your family income for the previous year. Any pay equity amounts received in 2011 will have an impact only on the child assistance you will receive from July 2012 to June 2013. In such a case, you will be sent an annual notice.
However, salary adjustments will have no effect on the supplement for handicapped children, which is the same for everybody, regardless of family income or the child's handicap.