CPP Death Benefit

The Canada Pension Plan (CPP) Death Benefit is a one-time payment, payable to the estate or other eligible individuals, on behalf of a deceased CPP contributor. To qualify for the death benefit, the deceased must have made contributions to the CPP for a sufficient period of time, and if so, the benefit could be as much as $2,500. It must be applied for, preferably within 60 days after the death has occurred. A spouse may also be eligible for a CPP Survivor’s Pension, which is a monthly payment paid to the legal spouse or common-law partner of the deceased contributor. The CPP Children’s Benefits provide monthly payments to the dependent children of disabled or deceased CPP contributors.

CPP Benefits can be applied for by completing forms which can be found on-line, or by filling in a paper copy. These can be mailed to the address on the form or taken to the nearest Service Canada office. The application must be accompanied by original or certified copies of the documents outlined on each form. If taken to a Service Canada office (950 Alder Street, Campbell River), a copy of the documents will be made from the originals, and an agent will provide help to complete the application.

It is primarily the executor named in the will who applies for the Death Benefit, but the person taking responsibility for making arrangements and paying a funeral home, the spouse, or next-of-kin could also be eligible. If the estate of the deceased did not have sufficient funds for a basic funeral, and those making arrangements did not have sufficient available funds, they could apply to the Ministry of Social Development and Poverty Reduction to cover the funeral costs. In this case, the Ministry would receive the Death Benefit. If no one took responsibility for the body of the deceased, the Public Guardian and Trustee would be contacted. If there were sufficient funds in the estate, they would locate the next-of-kin and pay the funeral home costs from the estate.

In some cases, the person who dies may have assets, but very little cash. This can make it difficult for the executor or next-of-kin to take care of immediate expenses, including funeral home costs. If there was a home or property that could be sold, a probate fee would need to be paid before the sale could take place. If this describes your situation, you can plan ahead by purchasing a small life insurance policy, pre-paying expenses, or naming your executor as a beneficiary on an account which allows this. These are strategies for funds to flow directly to the executor promptly; settling an estate takes time and generally requires fees be paid.

The purpose of the CPP Death Benefit is to help pay for the costs of the deceased person’s funeral home expenses. A proof of payment is not required; if a person chose to have a home funeral they would still be eligible for the Benefit.

Summarized / written by Margaret Verschuur