CPP Survivor Benefits: What you can expect

Many Canadian retired couples struggle financially, even when they’re both receiving the Canada Pension Plan (CPP) and Old Age Security (OAS). With the average retirement pension being just over $700 and the maximum OAS payment being $563 for married pensioners, couples who don’t have savings or a work pension can have a  financially stressful retirement.

Imagine how hard it must become then, when one of the spouses dies. Some Canadians are aware of CPP survivor benefits, but few retirees know how much the CPP survivor benefit is worth. So, while there is a survivor benefit for CPP, sadly, it’s never worth as much as the deceased was receiving, and it’s almost always worth less than you might think.

What is CPP survivor benefit?

Unfortunately, most people only begin to ask what is a CPP survivor benefit at what is a very stressful time in their life, rather than preparing themselves beforehand. To put it simply, survivor benefit for CPP in Canada is a monthly payment that the government makes to the survivors of a CPP contributor after that person’s death. There are different types of CPP survivors’ benefits:

Is there a survivor benefit for CPP for the deceased’s next of kin? Yes, the CPP death benefit is a payment to the estate of the deceased contributor (usually their next of kin, if they don’t have a spouse). It is often used as a kind of CPP survivor funeral benefit, to help cover burial/cremation costs.

How long does this CPP survivor benefit last? It is a one-off payment, so it does not last beyond that.

How much is this CPP survivor benefit worth? A maximum of $2,500.

Is there a survivor benefit for CPP for the deceased’s dependents? Yes, the CPP child survivor benefit is a payment to young dependants of the deceased contributor. We will touch on this CPP child survivor benefit’s eligibility criteria further on in this article.

How long does this CPP survivor benefit last? Until the child has reached the maximum age limit.

How much is this CPP survivor benefit worth? It is worth $257.58 per month.

Is there a survivor benefit for CPP for the deceased’s spouse? Yes, the CPP survivor’s pension has the most CPP survivor benefit applications of all three and is a payment to the legal spouse or common-law partner of the deceased contributor.

How long does this CPP survivor benefit last? This depends on whether the surviving spouse has started drawing their own CPP.

How much is this CPP survivor benefit worth? While the maximum CPP survivor benefit is worth $722.25 per month, calculating the amount you’ll receive is very complex, and depends on your age and other factors.

CPP survivor benefit eligibility for spouses

In general, the rules surrounding CPP survivor benefit eligibility apply to the deceased contributor’s:

  • Legal spouse at the time of their death
  • Common-law partner (in a conjugal relationship for at least a year)
  • A separated legal spouse if the deceased had no common-law partner

Is there a survivor benefit for CPP if you remarry? Yes, you will continue to receive your survivor’s pension. If you are widowed more than once, the CPP survivor benefit eligibility states that you will only receive the larger of the two survivors’ pensions.

How long does CPP survivor benefit last for widows and widowers? It could last until they in turn pass away, but it depends on a number of factors, which we will explore in the following sections.

How much is the maximum CPP survivor benefit in Canada?

Knowing how to calculate CPP survivor benefit, particularly for the survivor’s pension, can be complicated. There are two maximum CPP survivor benefit amounts, depending on the age of the surviving spouse:

  • Age under 65: maximum CPP survivor benefit $650.72*
  • Age 65 and older: maximum CPP survivor benefit $722.25*

However, CPP survivor benefit calculations are complex, and many survivors don’t receive those maximum amounts. The average CPP survivor benefit in Canada for spouses aged under 65 is just $415.18. For survivors aged 65-plus, the CPP average survivor benefit in Canada is even less: $308.60.

While the CPP survivor benefit calculation is complex, it’s helpful to know approximately how much you might receive, so you can work out how much you will have left to live off when your loved one passes away. Let’s take a closer look.

How to calculate CPP survivor benefits

The first thing to do when looking at how to calculate CPP survivor benefits is to confirm how much the deceased’s pension would have if they’d been 65 at the time of their death. Next, the survivor would receive a portion of that amount, depending on their age:

Survivors aged 65 and older: CPP survivor benefit calculation = 60% of the deceased’s pension, if they are receiving no other CPP benefits

Survivors aged under 65: CPP survivor benefit calculation = a flat rate portion PLUS 37.5% of the deceased’s pension, if they are receiving no other CPP benefits

How to calculate CPP survivor benefits when receiving other CPP benefits

If the survivor already receives a CPP retirement pension or disability pension, the survivor’s pension will be combined into one payment. However, survivors will not receive both a full retirement/disability pension and a full survivor’s pension.

The most you will receive is either the maximum disability pension or the maximum retirement pension (both of which are more than the maximum survivor’s pension). If you are already receiving the maximum CPP pension amount, you may not receive much, if anything, in the way of a survivor’s pension. This government website has details on combining the survivor’s pension with other benefits.

What is the CPP survivor benefit for orphans?

The monthly children’s survivor benefit is $257.58 for 2021. To qualify, the child must be under 18, or under 25 if attending a college or university full time. Benefits can also be used as a type of CPP survivor funeral benefit.

The surviving child must be either:

  • The deceased’s natural child
  • The deceased’s legally adopted child
  • In the custody and control of the deceased when aged under 21

What is the CPP survivor benefit deadline for children? There isn’t a deadline as such, but you should apply as soon as possible because CPP only makes back payments over 12 months.

Applying with the CPP survivor benefit form

As with the child’s survivor benefit, it pays to submit your CPP survivor benefit form as soon after the deceased’s death as possible, so as not to lose any benefits. The survivor is responsible for filling in the CPP survivor benefit application. If the survivor is incapable of doing this, they can have a trustee complete the CPP survivor benefit form for them.

Applying online:

Log into your My Service Canada Account and fill out the CPP survivor benefit application and provide all necessary documentation.

Applying with a paper application:

Fill out the relevant CPP survivor benefit form (ISP1300) and mail it in or drop it off at a Service Canada office with all requested documentation.

How to increase your retirement income after it’s been reduced

Many widowed retirees find that their income is considerably reduced when their spouse passes away. While some expenses, such as food and clothing may be reduced with their passing, shelter costs (repairs, city tax, heat, etc.) and other expenses (like car insurance) will remain constant.

Suddenly having one major source of income reduced by 40% or even more can put a strain on retired survivors’ budgets. However, retired homeowners aged 55-plus can use the equity in their home to boost their retirement income. A CHIP Reverse Mortgage from HomeEquity Bank allows you to cash in up to 55% of your home’s value, with the money being available in either a lump sum or regular monthly payments.

The best part is that you don’t have to pay back what you owe until you sell your home or move out, so you’ll have no regular mortgage payments to make. Call us at 1-866-522-2447 and find out how much you could borrow to improve your retirement finances.

* As at June 2021