The Canada Pension Plan Survivors’ Benefits
If you are employed then you will be aware of the contributions you make to the Canada Pension Plan. These contributions will eventually provide you with a small pension for your retirement. However, what you may not know is that your contributions to CPP will also provide you and your dependants with certain benefits if you become disabled or die. This article outlines the basics of the CPP survivor benefits.
When a contributor to CPP dies, certain benefits are available to:
o the deceased’s estate,
o the surviving spouse, and
o the dependent children.
The CPP Death Benefit
o The CPP death benefit is a one-time payment made to the estate of the deceased contributor.
o If there is no estate, then the person responsible for the funeral expenses, the surviving spouse or partner or the next of kin may be eligible, in that order, to apply for the benefit.
o The amount of the CPP death benefit depends on how much and for how long the deceased paid into the CPP. However, the maximum allowable death benefit is $2,500.
o The CPP Death Benefit is usually paid within 6 to 12 weeks of applying for it.
The Survivor’s Pension
o The Survivor’s Pension is a monthly pension paid to the surviving spouse of the deceased contributor.
o If applied for immediately following the death, the Survivor’s Pension will begin the month after the deceased contributor’s death, although the first payment may not arrive for 6 to 12 weeks.
o Remarriage does not put an end to the Survivor’s Pension.
o If the surviving spouse is receiving either a CPP disability or CPP retirement pension at the time of the deceased contributor’s death, the Survivor’s Pension will be combined with this other benefit into a single payment. Note that there is a limit on the total amount of CPP that a survivor is entitled to.
The CPP Children’s Benefit
o The CPP Children’s Benefit is a monthly pension for the dependent children of a deceased contributor.
o Children under the age of 18 are considered dependent children. The surviving parent or guardian must apply for the benefit on behalf of the child and the payment will be made to the parent or guardian.
o Children between the ages of 18 and 25, who are in school full-time, are also considered dependent children. A child in this age bracket must apply directly for this benefit. The payment will be made to the child.
o If applied for immediately following the death, the Children’s Benefit will begin the month after the deceased contributor’s death, although the first payment may not arrive for 6 to 12 weeks.
o In 2008 the CPP Children’s Benefit was a flat monthly rate of $208.77.
For these three benefits to be paid, the deceased must have made contributions to the Canada Pension Plan for a minimum of three years. Funeral homes will generally supply you with the necessary application forms.
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