Canada Pension Plan benefits available on death of a contributor
15 February 2023 2 min read
Although we generally associate the Canada Pension Plan (CPP) with income in retirement, there are several benefits that may be available for the family of a deceased contributor, including:
- Lump sum death benefit;
- Monthly survivor’s pension for a surviving spouse or common-law partner; and
- Monthly children’s benefit for dependent children of a deceased contributor.
To be eligible to receive these benefits, the deceased must have made CPP contributions for either:
- One-third of the calendar years in their contributory period, but not less than three years; or
- 10 years.
What is a CPP lump sum death benefit?
The lump sum death benefit amount of $2,500 is generally paid to the estate of the contributor when they have passed away. If no estate exists or the executor has not applied for the death benefit, the following individuals may apply to receive the payment (in order of priority):
- The person (or institution) that incurred the costs for the funeral of the deceased;
- The surviving spouse or common-law partner of the deceased; or
- The next-of-kin of the deceased.
How to receive the CPP survivor’s pension
The CPP survivor’s pension is paid to the legal spouse or common-law partner of the deceased. The survivor must apply to Service Canada in order to receive the survivor’s pension and should do so as soon as possible after the contributor’s death. Service Canada will determine the amount of a CPP survivor’s pension based on:
- How much and for how long the contributor paid into CPP;
- The age of the spouse or common-law partner when the contributor dies; and
- Whether the survivor is receiving a CPP retirement or disability pension.
If you are receiving a CPP survivor’s pension, an adjustment to the monthly amount you receive will occur at age 65 and at the time you elect to receive your CPP retirement pension. To avoid surprises, it is recommended that you contact Service Canada (at 1-800-277-9914) to receive estimates of your revised monthly CPP survivor’s pension at 65 and your combined monthly CPP survivor’s and retirement pension at the age you are considering taking your CPP retirement pension.
A common-law spouse’s claim to a CPP survivor's pension would take precedence over the claim of a separated legal spouse. To be considered common-law, the couple must have lived together in a conjugal relationship for at least one year.
You will not lose your survivor’s pension if you remarry or enter into a common-law relationship. However, if you survive more than one spouse or common-law partner, you can only receive one CPP survivor’s pension. You will be paid whichever pension is the largest.
Canada Pension Plan children’s benefit
The child of a deceased CPP contributor, or a guardian on their behalf, may also be eligible to receive a monthly benefit. Dependent children under 18, or between the ages of 18 and 25 and attending school full-time are eligible. The monthly amount of the children’s benefit is $281.72 for 2023. In the unfortunate situation of each parent being either disabled or deceased, a qualifying child could receive two benefits.
ATB Wealth® consists of a range of financial services provided by ATB Financial and certain of its subsidiaries. ATB Investment Management Inc., ATB Securities Inc., and ATB Insurance Advisors Inc. are individually licensed users of ATB Wealth. ATB Securities Inc. is a member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada.
The information contained herein has been compiled or arrived at from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness, and ATB Wealth (this includes all the above legal entities) does not accept any liability or responsibility whatsoever for any loss arising from any use of this document or its contents. This information is subject to change and ATB Wealth does not undertake to provide updated information should a change occur. This document may not be reproduced in whole or in part, or referred to in any manner whatsoever, nor may the information, opinions and conclusions contained in it be referred to without the prior consent of the appropriate legal entity using ATB Wealth. This document is being provided for information purposes only and is not intended to replace or serve as a substitute for professional advice, nor as an offer to sell or a solicitation of an offer to buy any investment. Professional legal and tax advice should always be obtained when dealing with legal and taxation issues as each individual’s situation is different.
ATB Wealth experts are ready to listen.
Whether you're a beginner or an experienced investor, we can help.