What Is the CPP Death Benefit and Who Should Apply?
It’s challenging enough when a loved one passes away, and having to settle the financial matters of the estate can add to the stress and make things even more difficult. Nobody wants to deal with these types of situations, but the reality is that someone needs to get their loved one’s affairs in order. Thankfully, there are some avenues that can help to alleviate the financial burden. The Canada Pension Plan (CPP) death benefit is one of them.
What Is the CPP Death benefit?
The CPP death benefit is one of several CPP benefits. It’s paid out to the estate or other eligible individuals when a CPP contributor passes away. It’s a one-time payment that’s designed to offset funeral expenses and other final costs. The death benefit amount is $2500.
Who Claims the CPP Death Benefit?
It’s important to understand who is eligible for this CPP benefit. If an estate exists (deceased had a will with a named executor), that person should apply for the death benefit within 60 days of the date of death. In the absence of a will, the Court-appointed administrator would be eligible to apply for any CPP benefits.
Often, there is no will, or there is no estate in existence. In that case, the following people can apply to receive the CPP death benefit on behalf of the deceased (in order of priority):
- The individual or institution that is covering the deceased’s funeral expenses
- The surviving spouse or common-law partner
- The next-of-kin of the deceased (sibling, child, etc.)
Any of these individuals can employ a guardian or legal representative, like a Power of Attorney to assist them with the claim process.
For a deceased person to qualify for the CPP death benefit, they must meet the following criteria:
- Made CPP contributions for at least 10 years, or;
- One-third of calendar years in their base CPP contributory period
How to Apply for the Benefit
When a deceased CPP contributor dies, the estate representative should notify CPP as soon as possible. This way, you can cancel the monthly CPP retirement benefit. Otherwise, benefits may need to be repaid to the government (The estate is entitled to receive a CPP benefit for the month the contributor passed away.)
You can apply for the CPP Death Benefit via mail by completing a 5-page Form (ISP1200) and sending it to Service Canada. Along with the form, you’ll need to supply a certified true copy of the proof of death, i.e., death certificate, letters of probate (notarized), coroner’s statement, etc.
Note that the processing time can take up to 12 weeks.
How to Contact the Canada Pension Plan
There are several ways you can contact the Canada Pension Plan, whether you need general information or have questions about a completed application:
Estate representatives can access their Service Canada account online; however, guardians or legal representatives of the authorized individual can only correspond via mail or in-person.
Here is a list of mailing addresses to send a CPP Death Benefit application, depending upon the province of residence.
You can obtain general information using the following toll-free numbers:
Canada and the United States Toll-free: 1-800-277-9914
Canada and the United States TTY: 1-800-255-4786
Outside Canada and the United States: 1-613-957-1954 (Call collect)
You can visit a Service Canada office to submit CPP Death Benefit documents. You will need to present a valid ID and be prepared to answer various security questions.
How Long Does the Application Process Take?
According to Service Canada, it takes between 6 and 12 weeks from the date an application is received to process the Canada Pension Plan death benefit. If you do not receive an update on the status of your application within 12 weeks, you can contact the CPP. Also, if you disagree with the death benefit amount, you can file an appeal on behalf of the deceased’s estate.
CPP Survivor’s Benefit
The spouse or common-law partner may qualify for a CPP Survivor’s Benefit, in addition to the one-time CPP death benefit.
The benefit amount will depend on a couple of factors, including the survivor’s age, the amount paid into the CPP by the deceased, and the number of years they contributed.
If an eligible survivor is over 65 years of age and is not receiving other CPP benefits, they’ll receive the maximum survivor’s pension, equal to 60% of the CPP contributor’s pension.
If the eligible survivor is under 65 and is not receiving other CPP benefits, they’ll receive 37.5% of the deceased CPP contributor’s pension on top of a flat-rate component.
CPP Child’s Benefit
Children of a deceased contributor can also be eligible for a CPP Children’s Benefit. There are two benefits, and here are the qualifying rules:
- Under 18, or;
- Under 25 and registered in full-time studies at a recognized college or university
- There is a separate benefit for children of a disabled contributor (who received a CPP Disability Benefit).
For more details on CPP Benefits for surviving children under 25, contact Service Canada, or visit the government website.
Final Thoughts on the CPP Death Benefit
CPP death benefits, including the survivor’s and child’s benefits, extend beyond a person’s living years to assist the survivors of a deceased contributor. It’s essential that the estate executor, deceased’s surviving spouse, or next-of-kin ensure that they apply for the benefit within the recommended time frames. In the case of the survivor’s and child’s CPP benefits, CPP will only make back payments for up to 12 months.