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Kevin Burkett, tax partner, Burkett & Co. Chartered Professional Accountants in Victoria.Handout

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This is the latest article in an ongoing series, Planning for the CPP, in which Globe Advisor explores the decisions behind when to take CPP benefits and reviews different aspects of the beloved and often-debated government-sponsored pension plan.

As part of this ongoing series, we invite readers to ask questions about their Canada Pension Plan (CPP) retirement benefits and find experts to answer them. This week, we asked Kevin Burkett, tax partner at Burkett & Co. Chartered Professional Accountants in Victoria, to answer some questions about survivor benefits:

What’s the difference between a death benefit and a survivor benefit?

The death benefit applies in cases in which the deceased made contributions to the CPP that meet certain requirements around years of contributions. It’s a one-time payment of $2,500 that can be applied for immediately after the contributor’s death, paid to their estate or, in cases in which there’s no estate, it can go to the person paying for funeral expenses, the surviving spouse or the next-of-kin, in that order.

The survivor’s pension is a monthly pension paid to the surviving spouse or common-law partner and, in cases in which the survivor is 65 or older, results in a 60 per cent entitlement. If the surviving spouse is under 65, they receive a base amount of $227.58 per month, which is the flat rate portion for 2024, plus 37.5 per cent of the deceased contributor’s retirement pension entitlement. Note that if the surviving spouse is already receiving a CPP retirement pension, the total of these amounts is limited to certain thresholds.

If you are receiving survivor benefits, is there a good time to take your own CPP? I was 62 when my husband passed away and I started receiving survivor benefits then. I tried to research the best time for me to take my own CPP, and it’s all very confusing. No one seems to have a good, clear answer.

It is very confusing. The best choice will depend on your specific situation. In addition to all the usual considerations of when to start your own retirement pension, you need to be aware of the overall limit for someone receiving a combined survivor’s and retirement pension. In some cases, if this limitation affects you, it may be best to defer receiving your own retirement benefit to obtain the increased retirement entitlement at 70. If you call Service Canada, a representative can provide you with the exact numbers of your combined survivor pension and retirement benefit if you decide to start now. You could then compare this to the option of allowing your retirement pension to grow by deferring it.

Can you tell me what the CPP maximum combined survivor and retirement pension is if the deceased or the survivor starts collecting at 70? Also, what is the impact if both spouses are over 65 and neither is collecting when one of them passes away?

The 2024 maximum combined survivor’s and retirement pension, as shown on the Service Canada website, is $1,375.41. This limit is for a surviving spouse who starts their own retirement pension at 65. If the surviving spouse defers their CPP benefits until 70, this limit is increased by 42 per cent. If both spouses are over 65, and neither is collecting the CPP when one of them passes away, the surviving spouse’s combined survivor and retirement pension will be subject to the maximum limit at that time, after taking into account the 0.7 per cent per month increase that applies by deferring the start of the retirement pension after 65.

If you have any CPP questions, please e-mail us at globecpp@gmail.com and we will try to answer as many as possible in the next few weeks. Answers will appear on Tuesdays.

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