Protection for spouse or common-law partner when a CPP contributor dies
When Ramez was 57, his wife passed away unexpectedly. While making the funeral arrangements, Ramez was informed by the Director of the funeral home that he may be entitled to receive survivor benefits from the Canada Pension Plan. The Funeral Director gave him an information booklet and applications.
Later that week, Ramez took a few moments to read the information booklet. He learned that because his wife had been paying into the Canada Pension Plan for several years before she died, he, as a surviving spouse, was eligible for survivor's pension. He also learned that as the executor of his wife's estate, he could also apply for a CPP death benefit.
The death benefit is a one-time payment intended to help cover funeral expenses while the survivor's pension is a monthly payment to the surviving spouse or common-law partner. The booklet explained that the amount of the benefits would be determined by how much and for how long his wife had contributed to the Canada Pension Plan.
Ramez completed the application forms for the CPP death benefit and the survivor's pension, making sure to include all of the required documents such as a copy of his wife's death certificate and their marriage license. A few weeks later, he received a letter from the Canada Pension Plan informing him that he was entitled to the maximum death benefit of $2,500 (a one-time payment) and a monthly survivor's pension of $400 a month.
Ramez wondered what would happen to his Canada Pension Plan survivor's pension when he applied for his Canada Pension Plan retirement pension when he turned 60. So he called the Canada Pension Plan office. He was told that when his retirement pension began, it would be combined with his monthly survivor's pension into a single monthly payment. The amount of this combined benefit would not be more than the maximum retirement pension paid that year.
Case study summary - Survivor benefits
- Ramez's wife works and contributes to the Canada Pension Plan
- Ramez's wife passes away
- Ramez applies for and receives:
- a CPP Death Benefit -- a $2,500 one-time payment
- a survivor's pension -- a monthly benefit based on his wife's earnings and contributions to the Canada Pension Plan
- Ramez learns that when he retires he will receive a combined survivors/retirement pension