New CPP changes end age restrictions on survivor benefits
OTTAWA — Samantha MacDougall thought her fight to get her late partner’s Canada Pension Plan benefits would take years.
The government ended the fight for her.
Newly approved changes to the Canada Pension Plan will mean widows and widowers, regardless of age, will receive full survivor benefits, changing five decades of federal policy.
The changes mean anyone under age 35 without children or a disability will receive benefits immediately, rather than having to wait to age 65, and will end benefit clawbacks for survivors under age 45.
Anyone previously denied survivor benefits because of the age rule will be able to re-apply for benefits when the rules take effect in 2019. Those receiving a reduced benefit will automatically see their benefits recalculated upwards.
The government estimates the changes will affect 40,000 people, about half of them being young survivors like MacDougall.
“It is the right thing to do and seeing as the change is being made, I must not be the only one who thinks so,” said MacDougall, whose partner, Greg Weeks, died in 2013.
“It is exciting that no one else, including myself, is going to have to waste any of their precious living hours having to fight this (rule) any longer.”
Federal research found the tight rules disqualified about one-third of widowed Canadians from immediate benefits, such as Jilian Derksen who was told she would have to wait until she turned 65 to collect payments.
A federal tribunal rejected her appeal of the decision, saying she had no hope of winning.
Derksen said she planned to submit anew her application for the benefits accrued by her husband Daniel, who died in 2016.
“This is great news, just when I thought rules can’t be broken,” she said.
For decades, the government maintained the age restrictions reflected the fact that a survivor with no children or disability ought to be able to adapt financially to the loss of a partner by going back to work. The benefits were paid out when the surviving spouse turned 65.
An official from the Finance Department said the changes recognized survivors of any age face financial difficulties following the death of a spouse.
The change to survivor benefits was one of several that Finance Minister Bill Morneau and his provincial counterparts agreed to during a two-day meeting this week and one that had broad support from labour groups and opposition parties.
But those same groups are withholding judgment on other changes designed to boost retirement benefits for parents and those with disabilities.
The finance ministers agreed to a formula to assign income for years when someone was out of the workforce to raise a child or because of disability — a drop-in amount based on an average of previous years’ earnings. The provision differs from what exists in the base CPP, where recipients can drop years of lower earnings from the calculation of their retirement pension.
The government says the dropin rules would protect the CPP enhancement retirement pension, but Conservative MP Karen Vecchio said she wanted see the numbers to prove that was the case.
“What is the difference really for women who have taken time off to raise their children under the age of seven? Is this going to be beneficial to them or not?”
NDP critic Scott Duvall said he didn’t think that the drop-in provisions would provide the same benefits as the drop-out provisions in the base CPP.
“What they’ve done is give us some half measures for what we’re actually asking for. Women and people with disabilities should be given the full protections under the enhancements.”
Hassan Yussuff, president of the Canadian Labour Congress, called on the government to provide actuarial modelling to show what is going to happen over time.
“Unless they’re able to produce that, then I think it’s a real problem for us politically because we couldn’t support it if it doesn’t really end up ensuring that women and folks with disabilities aren’t going to be disadvantaged,” he said.