CPP and OAS after the death of a spouse

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Q: I am 84 and many years ago my wife and I arranged to receive equal payments of CPP and OAS for tax benefit purposes. She has now died and of course her payments are cancelled. As I paid more into the system when working, I was entitled to larger payments. Now that her payments are stopped am I eligible for receipt of larger payments than the equalized payments received while she was still alive? —Keith A: I’m sorry for your loss, Keith. The death of a spouse can be a difficult time, both emotionally and financially. With regards to your pensions, I’ll try to clarify the options and implications going forward. You mention that you arranged pension sharing when you applied for your government pensions. Pension sharing is an option available to spouses applying for their Canada Pension Plan (CPP) retirement pensions. The intention is to reduce tax payable as a family by equalizing taxable incomes. Due to Canada’s marginal tax system, with higher tax rates payable on higher incomes, to the extent that you can have a comparable income to your spouse in retirement, you can pay less combined income tax. Ask a Planner: Leave your question for Jason Heath » Pension sharing allows you to receive a share of both of your CPP retirement pensions based on the numbers of months you lived together during your contributory period between the ages of 18 and 65. For example, if you married at age 18, you would be eligible to split your pensions equally. If you were married after you started working, part of your pension would be ineligible for splitting. Pension sharing is particularly helpful when one spouse worked more and will have a higher pension than the other spouse. Old Age Security (OAS) is not eligible for pension sharing, Keith. Your entitlement depends on your years of residency in Canada between the age of 18 and 65, so has nothing to do with your past earnings. If you both lived in Canada your whole life, your pensions would have been equal anyway – not because you applied to share them, but because you were both entitled to the maximum pension. Of note is that CPP pension sharing is different from pension income splitting. Pension income splitting allows you to split eligible pension income, which generally includes income like defined benefit pension benefits, RRIF withdrawals, etc. Pension income splitting can be done on your annual tax filing with your spouse to equalize income and reduce family tax. It sounds like you may have received a lower CPP retirement pension over the years, Keith, because you were sharing your higher pension benefit with your wife. Now that she has died, you are not penalized, but you may not be made fully whole. You will be entitled to a CPP survivor benefit equal to 60% of your wife’s CPP retirement pension, but only to the extent that this survivor benefit and your own retirement benefit do not exceed the maximum CPP retirement benefit payable. This limitation often results in a reduction in pension income after the death of a spouse. There is also a CPP death benefit payable of 6 months of your wife’s retirement benefit, Keith, up to a maximum of $2,500. This benefit is a one-time payment. OAS does not have a survivor benefit in your case, though there is an Allowance for the Survivor payable to people between 60 and 64 with a low income. Survivor pensions are an important consideration when you are planning your retirement. When your spouse dies, don’t forget to apply for a CPP death benefit, a CPP survivor’s pension and, if eligible, an OAS Allowance for the Survivor. An executor should apply for these benefits within 60 days of the date of death. Ask a Planner: Leave your question for Jason Heath » Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever. MORE ABOUT CPP:

About Jason Heath, CFP

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

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Paul Macaulay says:

September 1, 2020 at 5:41 pm

If I died can my cpp or part of go to my wife till she passes away

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1. Samuel Kavanagh says:
  
  September 2, 2020 at 2:57 pm
  
  Response from the MoneySense editorial team:
  
  Hello Paul, thank you for your question.
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
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Brian W Lewis says:

September 18, 2020 at 6:36 pm

I am 84 and in poor health suffering with two cancers. I currently receive a public service pension from the Federal government and my Canada Pension. If I should decide to have assisted suicide would that affect the pensions my wife would receive? Thanks.

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1. Sandra E. Martin says:
  
  September 22, 2020 at 9:31 am
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
  Reply
Judith Anne Mochuk says:

June 24, 2024 at 4:57 pm

My husband and I have both been collecting CPP. He died this January 2024. Do I qualify for 60% of his CPP?

Thankyou
Judith A. Mochuk

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