CPP After You Die: What Happens to Your Pension Payments?

Your CPP doesn’t end with you, but what exactly happens to it when you die? Let’s walk you through what your spouse or family could receive and how to claim up to $818.76/month for your survivors.

Eligibility for CPP Survivorship Pension

To qualify for the Canada Pension Plan (CPP) Survivorship Pension, there are a couple of important requirements:

• 1. Relationship Status: You must be the legal spouse or common-law partner of the deceased CPP contributor.
• 2. CPP Contributions:
  • The deceased must have contributed to CPP for at least 3 of the last 6 years before their passing, or
  • They must have contributed for at least 10 years in total.

Pro Tip:
Make sure you apply for the Survivorship Pension as soon as possible after your partner’s death. Retroactive payments are limited to 12 months, so any delay could mean losing money that’s rightfully yours. It’s easy to overlook this during the grieving process, so keep this on your radar.

Example:
Meet John and Emma. Let’s say John passed away this month, and his wife, Emma, is eligible for $700 a month in benefits. If Emma waits 18 months to apply, she would miss out on 6 months of payments ($4,200 total) that could have helped her cover living expenses or unexpected costs during this difficult time, so make sure you apply right away!

Think of the survivorship pension as a lifeline, keeping your financial boat afloat after a storm.

How Much Can You Receive from the CPP Survivorship Pension?

The amount of the CPP Survivorship Pension you receive depends on two key factors:

1. Your age at the time of your spouse’s death.
2. The amount your spouse contributed to the CPP over their working years.

Here’s an example. John passes away at age 65, and he received $1,200 a month in CPP. 

Example Where John’s CPP Pension is $1,200 at Age 65:

If Emma is Under 65

If Emma is under 65 when John passes away, she will receive:

• A flat-rate amount (for 2024, it is $227), plus
• 37.5% of John’s calculated CPP retirement pension.

Example:
If John would have received $1,200 per month at age 65, Emma’s pension as a survivor under 65 would be:

• 37.5% of $1,200 = $450, plus the flat-rate portion of $227.
• Emma’s total benefit would be $677 per month.

If Emma is 65 or Older

Once Emma turns 65, her survivor’s pension is recalculated, and she will receive up to 60% of John’s calculated pension.

Example:
If John’s CPP retirement pension was calculated at $1,200 per month, Emma’s survivor’s pension at 65 or older would be:

• 60% of $1,200 = $720 per month.

Example Breakdown:

Important Note: The pension is always calculated as if John had reached age 65 at the time of his death, regardless of whether he passed away younger or older. This part confuses a lot of people, so let me explain:

CPP Survivor Pension Breakdown:

Explanation:

Whether John passed away at a younger age (e.g., 60), at 65, or older (e.g., 70), the same calculation applies. John’s pension is calculated based on what he would have received at age 65.

• If John passed away at 60, his retirement pension is still calculated as if he had lived until 65.
  • If Emma is under 65, she would still receive $677 total.
  • If Emma is 65 or older, she would still receive $720 total.
• If John passed away at 70, the pension is still calculated as if he had been 65 at the time of death.
  • The survivor’s benefit amounts remain the same: $677 per month if Emma is under 65, and $720 per month if she is 65 or older.

Key Takeaway:

Regardless of John’s age at death, Emma’s survivor’s pension is based on the amount he would have received at age 65. 

What people actually receive for CPP survivor benefit

Looking at the actual real life data of what people receive for the CPP survivor benefit, we see that: 

The table shows the average and maximum CPP Survivorship Pension payments for 2024:

• Under 65: Average payment is $524.78, with a maximum of $739.31. This includes both the flat-rate amount and 37.5% of the deceased spouse’s pension.
• 65 or Older: Average payment is $323.78, with a maximum of $818.76. Survivors over 65 receive 60% of their spouse’s pension, without the flat-rate portion.

The gap between average and maximum suggests that many survivors do not receive the full pension, likely due to their spouse’s contribution history or their own CPP benefits.

In both cases, the maximum payment can only be achieved if the deceased spouse contributed the maximum allowable amounts to the CPP, which is not always the case.

Maximum Cap Explained (Including CPP Disability)

There is a cap on the total CPP benefits you can receive if you are collecting your own CPP retirement or disability pension. The combined amount of your CPP benefits and the Survivorship Pension cannot exceed the maximum CPP retirement or disability benefit amounts.

Here are the Maximum CPP amounts, with some examples of how it works

Maximum CPP Amounts (2024):

• Combined Survivor and Retirement Pension: $1,375.41 per month.
• Combined Survivor and Disability Pension: $1,613.54 per month.

Example 1: Retirement Pension and Survivorship Pension

Emma receives $800 per month from her CPP retirement pension and qualifies for $700 per month from John’s Survivorship Pension. Her combined total would be $1,500, but due to the retirement cap of $1,375.41, her benefits will be reduced to $1,375.41 per month.

Example 2: Lower Retirement Pension

If Emma’s CPP retirement pension is $400 per month and she qualifies for $600 per month from John’s Survivorship Pension, her combined total would be $1,000. Since this is below the cap, she would receive the full $1,000.

Example 3: Disability Pension and Survivorship Pension

If Emma receives $1,200 per month from CPP disability benefits and qualifies for $500 per month from John’s Survivorship Pension, her combined total would be $1,700. However, due to the combined survivor/disability pension cap of $1,613.54, her total benefits would be adjusted to $1,613.54 per month.

Planning Strategies Around the CPP Cap After a Spouse’s Death

1. Start CPP Early if You’re Below the Cap: If your CPP retirement pension will be significantly below the maximum, starting CPP early can be a good option. This allows you to collect both your CPP and the Survivorship Pension sooner without hitting the cap.
   • Example: If your CPP is expected to be $400 per month and your Survivorship Pension is $500, the combined total of $900 is well below the cap of $1,375.41 for retirement benefits, so starting CPP early might make sense.
2. Delay CPP if You’re Near the Cap: If your expected CPP is close to the maximum, delaying your CPP can maximize your overall benefit. This way, you receive a higher Survivorship Pension without exceeding the cap.
   • Example: If your CPP at 65 is $1,000 per month and your Survivorship Pension is $600, the combined total of $1,600 exceeds the $1,375.41 cap. Delaying CPP to age 70 will increase your own CPP benefit later on, while still getting paid the full survivorship benefit from age 65-69.

How Long Do You Receive the Survivorship Pension?

You receive the CPP Survivorship Pension for life, as long as you’re alive. There are no time limits. Note these two key points though:

• Remarriage: Remarrying or entering a new common-law relationship does not affect your eligibility. You will continue receiving the pension.
• Death of the Survivor: Payments stop upon your death.

How to Apply for the Survivorship Pension

Applying is straightforward. Complete the application on the Government of Canada’s website and provide documents like your spouse’s death certificate. Step-by-step guides are available, and help is always an option. Again, remember my pro tip from before, and apply as soon as possible, to make sure you don’t miss out on any payments, as there is a 12 month retroactive window.

Child Benefits

If you have children, they may be eligible for the CPP Children’s Benefit, which provides financial support after the loss of a contributing parent. The benefit is available to both biological and adopted children of the deceased and can make a meaningful difference, especially with education expenses.

How Much Can They Receive?

In 2024, the CPP Child Benefit offers a flat-rate payment of $294.12 per month, per child. This amount is not based on your or your spouse’s earnings— .

Eligibility

To qualify, the child must be:

• Under 18 years old, or
• Between 18 and 25 and enrolled in full-time school.

Once the child reaches 25 or is no longer attending school full-time, the benefit stops.

How to Apply for Child Benefits

The application process is straightforward and similar to the CPP Survivorship Pension. You can apply through Service Canada and will need supporting documents such as your child’s proof of enrollment in school if they are between 18 and 25. 

CPP Death Benefit

CPP Death Benefit

The CPP Death Benefit is a one-time lump sum, typically $2,500, paid to the estate of the deceased. In some cases, it may be as much as $5,000. This amount can help cover immediate expenses, such as funeral costs, easing the financial burden in the first few weeks after a loss.

Taxability of CPP Benefits

All CPP benefits—including the Survivorship Pension, Child Benefit, and Death Benefit—are taxable. You must report them on your tax return:

• CPP Survivorship Pension: Taxable income, reported by the recipient.
• CPP Child Benefit: Taxable, reported by the parent/guardian for children under 18, or by the child for ages 18-25.
• CPP Death Benefit: Taxable lump sum, reported by the deceased’s estate.

Understanding how these benefits work and their tax implications can be challenging, especially during tough and emotional times. We understand how hard it can be to manage finances after a loss. See our services at Blueprint Financial—our team is here to help you find stability and peace of mind.