Advice and Info

Advice and Info

6 Facts About the
CPP Death Benefit

6 things to know about the CPP Death Benefit

Are you with the understanding that the Canada Pension Plan Death Benefit will pay the final expenses to a funeral home, after you’re gone from this life?

Although you might be thinking “the Canadian government will pay my funeral costs; after all, I paid into CPP all my life” – the facts state otherwise.

It seems to be a common belief that upon death – all Canadians are entitled to the Canada Pension Plan (CPP) Death Benefit; that the benefit is payable to the funeral home to cover final expenses. Unfortunately, that just isn’t the case.

6 basic facts about the CPP Death Benefit

  1. The deceased had to have paid into CPP for at least 10 years since 1966
  2. The maximum one-time benefit is currently $2,500
  3. The CPP Death Benefit is taxable
  4. The  CPP Death Benefit is not paid to the funeral home by the government; it is paid to the estate of the CPP contributor
  5. Application for the Death Benefit can only be made at the time of death, not prior
  6. Average wait time to receive the Death Benefit payment: 20 weeks or more

The Dying Death Benefit

If you’re assuming the CPP Death Benefit is indexed; I hate to be the bearer of bad news.  The 1997 reforms actually reduced the one-time CPP Death Benefit from $3,580. to the current maximum amount of $2,500.

Although you may be entitled to receive the CPP Death Benefit; it usually falls short of what final expenses typically cost and it’s taxable, leaving even less of a benefit. That’s correct; the CPP Death Benefit is taxable income.

Apply for your Serenity preplanned protection to cover final expenses rather than relying on the dying CPP Death Benefit. A low-cost, flexible and non-taxable plan will lock-in and guarantee the future cost of your final expenses without any eligibility concerns.