Your Ultimate Guide to the CPP: Part III – Survivor Benefits

When a CPP contributor dies, his or her surviving spouse, common-law partner, and dependent children may qualify for benefits including the Survivor’s pension, Children’s benefit and CPP Death benefit.

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CPP Survivor Benefit

The spouse or common-law partner of a deceased CPP contributor may be eligible to receive a monthly survivor’s pension.  The maximum CPP survivor’s benefit for 2020 is $638.28 for those under age 65, and $705.50 for those over age 65.  The amounts differ due to different formulas for calculating the benefit.

But it doesn’t necessarily mean that the survivor will receive the maximum.  What you get is a complex calculation that depends on a variety of factors such as:

  • Your age at the time of your spouse’s death.
  • The age of your spouse.
  • What contributions were made to the deceased’s plan.
  • The age of the deceased pensioner when CPP payments began.
  • Whether you are already receiving other CPP benefits.

The average survivor pension received for new beneficiaries 65 and older is $306.83 and $455.20 for those under 65.

Related:  The Financial Impact on a Surviving Spouse

Combined benefits calculation

When changes were made to the CPP, the formula for calculating combined retirement and survivor benefits after age 65 was altered. The combined benefit was capped at the maximum retirement pension paid out for that year.

As a result, someone already receiving the maximum retirement pension will not receive any survivor benefits on his or her spouse’s death, no matter how much the deceased had paid into the plan.  But even if adding the two pensions together would not exceed the maximum, you would not receive all of both pensions when they are combined.

Some people are under the misconception that if they start their CPP pension early (at a reduced rate), they will be eligible for a higher survivor’s pension when their spouse dies.  Because the way the formula is calculated, this isn’t true.

In contrast, a non-working surviving spouse 65 or older would be entitled to 60% of their spouse’s pension.  If the survivor is under age 65, they would get 37.5% of the contributor’s pension plus a flat monthly rate ($197.34 for 2020).

If you remarry you will continue to get your CPP survivor pension. However, you can only receive a survivor pension from one spouse. CPP will pay the larger amount on the subsequent spouse’s death (if that is the case).

CPP Surviving Children’s Benefit

The CPP Children’s benefit is a monthly payment available to dependent children of a deceased CPP contributor. To be eligible, the child must be under 18 years of age, or not older than 25 if enrolled as a full-time student in a recognized school or university.

The amount of the benefit in 2020 is $255.03 a month.

CPP Death Benefit

To help ease the financial burden when a loved one has passed away, make sure you apply for the CPP Death Benefit.  This is a one-time lump-sum payment of $2,500 made to the estate of the deceased.  This amount is taxable.

If an estate exists, the executor of the will or the administrator appointed by the Court can apply for the death benefit.  The executor should apply for the benefit within 60 days of the date of death.

However, in a case where no estate exists, payment can be made to one the following in this order:

  • The person or institution who paid the deceased’s funeral expenses.
  • The surviving spouse or common-law partner.
  • The deceased’s next of kin.

Eligibility for the death benefit

To be eligible to receive the death benefit, certain requirements must be met. 

The deceased must have made contributions to the CPP for the lesser of one-third of the calendar years in their contributory period (at least three years) or 10 calendar years.

How to apply for survivor benefits

It’s important that you notify the government immediately after the death of a person receiving CPP benefits.  Any payments made to the deceased after the month of death will have to be repaid.

Send your applications for survivor and death benefits to the nearest Service Canada Centre as soon as you can after the contributor’s death. This will ensure you don’t lose out on benefits.

Some of the forms you may be required to complete include:

  • Survivor’s pension: CPP survivor’s pension and children’s benefits application form  (ISP-1300)
  • Children’s benefits: Under 18 (ISP-1300) and Over 18 years (ISP-400)
  • Death benefit: ISP-1200

Other information or documentation you’ll require include:

  • The deceased’s social insurance number
  • A certified true copy of the death certificate
  • Survivor’s social insurance number – spouse and children
  • A certified copy of the marriage certificate – if you were married to the deceased, or
  • A statutory declaration if you were living in a common-law relationship with the deceased.

After you have applied

Payment from Service Canada takes approximately 6 to 12 weeks from the date they receive your completed application.

For further information about your claim contact Service Canada at 1-800-277-9914 for assistance.

The bottom line

I know the topic of survivor benefits can be morbid.  But retired couples need to pay close attention to how their finances would be affected if a spouse receiving CPP benefits dies.

It’s rare that a couple dies at the same time.  Statistically, women tend to more often be the survivors and compounding their grief is dealing with the paperwork of claiming benefits from the government.

These payments are not automatic.  Make sure you apply and receive the benefits you are entitled to.

Also read:

Your Ultimate Guide to the CPP:  Part I – How CPP payments are calculated

Your Ultimate Guide to the CPP:  Part II – When should you start your CPP benefits?

Your Ultimate Guide to the CPP:  Part IV – Disability Benefits

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