# is 'defined benefit pension plan' income 'earned income' for RRSP headroom purposes?



## imaginenewmedia (Apr 4, 2012)

See title. I have a defined benefit pension plan that I receive income. I quit my job after 30 years and started collecting it. I still work. Is the defined benefit pension payments that i receive classified as 'earned income" for headroom purposes? What would the CRA define this pension type to be? (They seem to have many classifications, SPP, PRPP etc.)
Thanks
Andy


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## lb71 (Apr 3, 2009)

No. Pension income is not included as earned income. (Except for disability income from your CCP.)


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## OptsyEagle (Nov 29, 2009)

It is about as far from earned income as the definition can ever get. It was probably that income that made the creators of the RRSP come up with the term, "earned income" in the first place.


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## imaginenewmedia (Apr 4, 2012)

Thanks all, I couldn't find a definition on this anywhere.


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## OptsyEagle (Nov 29, 2009)

Always good to ask. Sometimes they surprise you. I think "rental income" is classified as earned income and intuitively I would not have thought that would have been the case.


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## carverman (Nov 8, 2010)

lb71 said:


> No. Pension income is not included as earned income. (Except for *disability income from your CCP*.)


If you meant CPP disability payments, It is still classified as 'pension income" but taxable. (line152 on the
T1 General)


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## OhGreatGuru (May 24, 2009)

imaginenewmedia said:


> ...Is the defined benefit pension payments that i receive classified as 'earned income" for headroom purposes? What would the CRA define this pension type to be? (They seem to have many classifications, SPP, PRPP etc.)


Read CRA Guide T4040 on RRSPs. For the definition of Earned Income they refer you to Step 2 of Chart 3. No where in that Chart does it allow you to include pension income.


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## OhGreatGuru (May 24, 2009)

carverman said:


> If you meant CPP disability payments, It is still classified as 'pension income" but taxable. (line152 on the
> T1 General)


According to Chart 3 of T4040 it is counted as "Earned Income" for calculating RRSP room. See line 17 of the Chart.


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## Davis (Nov 11, 2014)

OptsyEagle said:


> Always good to ask. Sometimes they surprise you. I think "rental income" is classified as earned income and intuitively I would not have thought that would have been the case.


I'm guessing you've never been a landlord. I earned that income, I can assure you of that. Now I own REITs because they don't call last midnight to tell me the washer is broken.


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