What happens to CPP and OAS when a spouse dies?

In this segment of Finance Friday, Dave answers viewer questions around CPP and survivor benefits after the loss of a spouse.

Aired on June 2, 2023, on CHCH Morning Live.

00:17 I’d like to know if you take your CPP at the age of 60 and continue to work, do your monthly payments increase?

Canada Pension Plan is indexed annually, meaning it increases annually in January based on the Consumer Price Index (CPI). CPI is based on the cost of a fixed basket of commodities purchased by Canadian consumers. This "basket" consists of food, shelter, clothing, transportation, health care and other household expenses. In January 2023 CPP increased by 6.5%.

If you’re between 60 and 65, have started CPP and are working, you must still contribute to the CPP. These CPP contributions will go toward post-retirement benefits which will increase your CPP retirement income when you stop working. A reminder that if you haven’t started CPP yet and are 60, your CPP will be 36% less than it would be at 65. It decreases 7.2% for every year before 65.

02:07 My husband recently passed away and his CPP and his Old Age Security were cancelled. I would like to know if I’m entitled to any compensation or a death benefit and how I go about claiming it.

There is no death or survivor benefit for OAS. It is not a pension it’s a government benefit and it stops the month after your husband passed away. CPP is different as it is a pension plan that we all pay into. CPP also stops the month after he passed away but there is a $2500 CPP death benefit that you should receive as his spouse and also a CPP ‘survivors benefit’. If you were not receiving CPP yourself when he passed, you’d get a portion of his CPP. If you were receiving CPP yourself when he passed you’d get a combined CPP pension in one monthly payment, but it can’t be more than the maximum CPP for an individual.

At FirstOntario Credit Union, we are committed to financial literacy. We know that strong financial literacy is key when making confident, informed decisions about money, including when you should spend it, why you should save it and how to make it grow. Our CSO, Dave Schurman, visits CHCH Morning Live every other week for a live Finance Friday segment. He discusses different ways to make the most of your money and addresses viewer questions. If you would like to submit your questions to Dave, send them by email at [email protected] or via Twitter at   / finance_friday  .

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