Budget 2024 expands CPP benefits

Federal and provincial governments have agreed to a slew of amendments to the Canada Pension Plan.

These include doubling the death benefit for some contributors, introducing a partial child benefit for part-time students, extending the eligibility for the disabled contributors children’s benefit beyond a parent’s 65th birthday, and ending eligibility for survivor pensions if a couple is legally separated.

These changes are not expected to impact contribution rates.

A $5,000 death benefit will be payable to contributors who have no survivors and have never collected CPP payments. This is compared to the standard $2,500 death benefit all other eligible contributors will continue to receive.

The government will also introduce a partial survival child benefit for part-time students under 25 and attending a recognized post-secondary institution. The CPP surviving child benefit is currently only payable if the child was under 18, or under age 25 and attending a post-secondary school full-time.

In addition, the amendments will extend eligibility for the disabled contributor’s children’s benefit to children until age 18 or 25 if they are attending a recognized post-secondary school regardless of the parent’s age. The benefit currently ends when the disabled parent reaches age 65.

Currently, couples who are legally separated but still legally married or in a common-law relationship may be eligible for survivor pensions when their partner dies. But a CPP amendment will end eligibility for survivor pensions as soon as couples legally separate.

Budget 2024 did not provide an estimate of each amendment’s financial impact.

Jonathan Got

Jonathan Got is a reporter with Advisor.ca and its sister publication, Investment Executive. Reach him at jonathan@newcom.ca.