If your spouse, parent or common-law partner dies, you may qualify for survivor benefits under the Canada Pension Plan (CPP). The program has three common benefits: death benefit, survivor’s pension and children’s benefit. For you to receive survivor benefits, the deceased must have made contributions to the Canada Pension Plan.
To apply for death benefits, complete Form ISP1200. For the survivor’s pension and children’s benefits, fill out Form ISP1300. If you cannot apply on your own, you can designate a representative to do so for you. Apply as quickly as possible after the contributor’s death: If you take too long, you can end up forfeiting benefits. It can take six to 12 weeks after Service Canada receives your application to receive your first payment.
If you don’t receive any other CPP benefits and are under 65, you will receive a flat rate component and 37.5% of the contributor’s retirement pension. If you are over 65, under the same conditions, you will receive 60% as a Survivor’s Pension.
Death Benefit
A death benefit is a one-time, lump-sum payment made to the contributor’s estate upon his death. In the absence of an estate, the person responsible for the funeral costs, the surviving spouse or common-law partner or the next of kin qualify for benefits. Generally, your benefit amount depends on your age, whether you’re getting multiple benefits under the CPP, and the length of time and amount the deceased paid into the program. You report these death benefits on line 13000. In some cases, you don’t have to pay taxes on up to $10,000 of the benefit you received.
Survivor’s Pension
The survivor’s pension is a monthly amount paid to the deceased’s spouse or common-law partner. This amount is entered on line 11400. Pension consultant Doug Runchey says, “If the deceased was separated from a legal spouse but living with a common-law partner, the survivor’s pension would be paid to the common-law partner.”
For children or spouses to be eligible to receive survivor’s benefits, the deceased contributor must have made contributions for a minimum of three years. Further, if the contribution period is greater than nine years, the deceased must have made payments in 10 years or one-third of the years in the contributory period—whichever is less.
Children’s Benefit
The children’s benefit is a monthly amount for the deceased’s dependent children, though it varies depending on whether the child is under age 18, or between ages 18 and 25. For children or spouses to be eligible to receive survivor’s benefits, the deceased contributor must have made contributions for a minimum of three years. Further, if the contribution period is greater than nine years, the deceased must have made payments in 10 years or one-third of the years in the contributory period, whichever is less. Dependent children ages 18 to 25 must be full-time students at a recognized educational institution. If the dependent child is under 18, usually the person with whom the child is living applies for the benefit; however, depending on the situation, the benefit might be payable directly to the child.
Social Security Agreements and Taxability
If the deceased resided or worked in Canada or another country, you might qualify for benefits from either or both countries. This process takes place via a Social Security agreement, which is an international treaty between Canada and another country that has similar pension programs. The criteria for each agreement vary, so it’s best to consult the agreement that applies to you. Tax laws concerning these benefits differ by country. For example, if you receive U.S. Social Security benefits as a Canadian resident, those benefits are taxed in Canada as if they were CPP payments; however, 15% of the amount isn’t subject to Canadian tax.
References & Resources
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