When a spouse or common-law partner passes away, understanding the financial implications of Old Age Security (OAS) and Canada Pension Plan (CPP) survivor benefits is essential. Here’s an overview of these programs and what survivors should expect.
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Old Age Security (OAS) and Survivor Benefits
The OAS program does not provide a survivor benefit. If a partner receiving OAS passes away, their OAS benefits are entirely lost. This means a significant reduction in retirement income for the surviving spouse. For instance, someone eligible for the full OAS pension (based on 40+ years of Canadian residency) receives $7,707 annually. Losing this amount impacts a survivor’s financial stability.
However, survivors aged 60 to 64 with limited income may qualify for the Allowance for the Survivor program under OAS. This benefit is designed for low-income survivors who meet specific residency and income criteria. For 2024, the income threshold to qualify is $29,712 annually. Payments vary based on the survivor’s income, with a maximum amount for eligible recipients
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Canada Pension Plan (CPP) Survivor Benefits
CPP provides a survivor’s pension, but it is subject to various rules and maximum thresholds:
- Under Age 65: Survivors receive a flat-rate portion plus 37.5% of the deceased’s CPP retirement pension.
- 65 and Older: Survivors may receive up to 60% of the deceased’s CPP pension if they do not already receive CPP benefits themselves.
For survivors already receiving CPP, the pension is combined and subject to the overall CPP maximum, which for 2024 is $1,375.41 for combined retirement and survivor benefits. This often results in reduced payouts:
- Survivors at or near the CPP maximum may receive no additional survivor benefits.
- Those below the threshold may receive partial amounts based on their own CPP entitlements.
Key Takeaways
- OAS benefits do not transfer to survivors, except under the Allowance for the Survivor program for low-income individuals aged 60-64.
- CPP survivor benefits are available but may be significantly reduced due to maximum combined benefit limits.
Understanding these systems can help survivors plan for the financial changes that occur after a loss. For more information or to apply, visit Canada.ca.
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