What Happens to CPP When You Die? Things to Know About Your CPP Benefits. Several people are finding answers to the one question about what will happen to their CPP after their death. Will the CPP end with them or will it be given to their spouse or common-law partner? Most people contribute a percentage or fixed portion of their salary while working for their retirement, which is known as a pension. They can claim it after retiring to cover their necessary expenses. Keep reading this article to learn about what happens to CPP when you die and what the benefits of your CPP are.
What Happens to CPP When You Die?
The Canada Pension Plan (CPP) is a monthly retirement pension that is provided to an individual after retirement. It is a taxable benefit and is provided monthly to provide monetary assistance to senior citizens. It acts as a source of income for the rest of your life. But what will happen to your CPP if you die? The answer is that when you die, your eligible spouse or common-law partner can apply and may be eligible to get a monthly CPP survivor pension.
The amount that your spouse or common-law may get will be based on various factors, different calculations, and some rules of the government’s CPP program. Moreover to the CPP survivor’s pension, your eligible dependents and your estate may apply and may be eligible to get a CPP death benefit or benefits for children under 25. The CPP death benefit is a one-time lump-sum payment that is made to your estate or other eligible individuals on your behalf.
Things to Know About Your CPP Benefits
You must apply for the CPP benefits as soon as the death of the contributor. All the CPP benefits are taxable, which means you must file them in your income tax return. There are three significant CPP benefits:
CPP Survivor’s Benefits
A CPP survivor’s benefit is a payment that is paid to the legal spouse or common-law partner of a deceased CPP contributor. To be eligible, the survivor must have been a legally married spouse or common-law partner, depending on the age of the survivor and how much the deceased contributor has paid in CPP contributions.
CPP Death Benefit
A CPP death benefit is a one-time payment made to the beneficiary or eligible individual upon death. To be eligible, the deceased must have paid contributions to the Canada Pension Plan (CPP) for at least one-third of the calendar years in their contributory period for the base CPP, but no less than 3 calendar years or ten calendar years. The CPP death benefit is a single lump-sum payment of $2500.
CPP Children’s Benefit
CPP children’s benefits offer a regular monthly payment to the dependent child or children of a departed CPP contributor. The departed contributor must have made enough contributions to the CPP, and the child must be under age 18, or age 25 and enrolled (full-time) in a well-known school or university. For 2024, the children’s benefit will be a flat monthly rate of $294.12, which will be adjusted annually.
Calculation of CPP Survivors Benefits
The calculation of a CPP survivor’s benefits is a very complicated process. The government first figured out what the CPP payment amount is, or would have been, had the deceased individual been 65 years old when they died. After that, more calculation is done depending on the surviving spouse’s age at the time of the contributor’s death, as follows:
| Age of the survivor | Survivor’s Pension | Monthly Maximum |
| Age 65 or older | 60% of the contributor’s retirement pension (if the surviving spouse or common-law partner is not getting other CPP benefits) | $720 |
| Below age 65 | A flat rate portion plus 37.5% of the contributor’s retirement pension (if the surviving spouse or common-law partner is not getting other CPP benefits) | $450 + $227 = $677 |
When to Apply?
Retroactive payments are limited to 12 months only. If you apply after 12 months of your spouse’s or common-law partner’s death, then you may lose money that is legally yours to claim. That’s why it is advised to apply for the survivorship pension as soon as possible after the death of your partner. If you remarry or enter a new common-law relationship, it will not impact your eligibility. So, you will keep receiving the survivor’s benefits. However, you will keep receiving these benefits until your death.