Making CPP better for survivors
February 28th, 2014 - 4:16pm
Among the many considerations that may be overlooked when someone grieves the loss of a spouse is eligibility for survivor benefits from the Canada Pension Plan. While most people will come to recognize this oversight, the timing of that can mean that money is foregone. This is due to the way current application deadlines are disqualifying widows and widowers from accessing the benefits of their late spouses. The sad fact is the problem is entirely arbitrary and there is no reason that we shouldn’t change it.
That’s what New Democrats intend to do and why we put forward legislation that will abolish the deadline restricting survivor benefit claims to 11 months. We are confident that there will be strong support for our belief that allowing survivors to receive their partner’s pensions is a matter of fairness and dignity. Under our proposed changes survivors would be able to receive full retroactive benefits and the 11-month limit would be abandoned entirely.
The bill is being supported by the Canadian Association of Retired Persons (CARP) which is Canada’s largest advocacy group for people over 50. CARP’s vice-president, Susan Eng, says the organization is in full support of removing the unfair rule that limits the time for people to apply for their CPP survivor benefits since these are pension benefits that they paid for, not government largesse.
This cannot be made into a discussion about what Canada can or can’t afford either and the point CARP makes is crucial. Many people are not aware that the CPP fund is entirely separate from general revenues. Additionally, another point that is often missed or ignored is how strong the CPP fund actually is.
If you wonder how flush our CPP is, consider this. The fund is one of the ten biggest in the world and grows from both investment and contributions. Despite the fear mongering employed by the Conservative to justify moving the age of eligibility for CPP to 67, there is enough money in the fund right now to cover the pensions of current and future retirees for the next 75 years. With that knowledge it is clear that there is more than enough money in the plan to allow for the removal of an arbitrary line in the sand that targets widows and widowers.
We should also remember that survivor benefits are not lavish. They amount to 60 per cent of the contributor's retirement pension, if the surviving spouse or common-law partner is not receiving other CPP benefits themselves. If they are, other restrictions arise and the logical next debate should focus on whether survivor benefits should flow at the same 60 percent rate that most other pension schemes do with no claw backs. Again, these are pension benefits that have been paid for.
For now we are trying to do away with an arbitrary time limit that is clearly punishing people at a time of great vulnerability. Surely we owe it to countless grieving Canadians to make this change to the CPP.