Change to CPP death benefit panned as insufficient to cover funeral costs

Funeral Services Association of Canada lobbied governments to raise the value to $3,580

A change to the Canada Pension Plan to provide a flat-rate death benefit to help low-income families cover funeral costs falls short of what funeral homes say is needed to cover the cost of a final farewell.

After meetings this week, federal and provincial finance ministers set the death benefit at a flat $2,500, regardless of how long or how much someone had paid into CPP.

Leading up to the meeting, the Funeral Services Association of Canada lobbied governments to raise the value to $3,580 — back to what it was in 1997 before finance ministers of the day imposed a sliding scale benefit based on an individual’s contributions to the CPP, capped at a maximum benefit of $2,500.

The association also asked that the benefit be tied to inflation so its value would increase with the cost of living.

Finance ministers didn’t agree. And now there are creeping concerns the decision will mean more people won’t be able to afford a funeral, which costs an average $6,000.

“It doesn’t make sense,” association president Yves Berthiaume said.

“Government needs to look at it (the death benefit) a little more closely and how they want to deal respectfully with their citizens.”

READ MORE: Family needs help to bring home son’s remains

READ MORE: Fraser Health apologizes after releasing body to wrong funeral home

A spokeswoman for Finance Minister Bill Morneau said the change would increase benefits to the estates of lower-income contributors.

The death benefit would likely be worth $5,500 today had it not been capped two decades ago. At the time, officials worried the benefit would become financially unsustainable if its value increased annually with the maximum income covered by CPP premiums.

The funeral services association estimates the benefit has lost 38 per cent of its buying power over the past two decades due to inflation.

Conservative social development critic Karen Vecchio said the finance ministers’ decision runs counter to what stakeholders wanted and will force Canadians to not only find ways to save more for retirement, but for death as well.

Hassan Yussuff, president of the Canadian Labour Congress, said the flat-rate payment will ensure no one is denied the benefit because they didn’t contribute enough money for a long enough period of time. But he said he was at a loss to understand why the finance ministers didn’t do more.

“The numbers need to come up and we’ll have to put some effort to try and address that,” Yussuff said.

In the 2014-15 fiscal year, CPP death benefits totalled $312 million for about 139,000 people. One year later, payments totalled $347 million for about 150,000 people.

At the same time, a larger proportion of seniors are living beneath the poverty line: The most recent census figures showed 14.5 per cent of seniors living in poverty in 2015, an increase from the 12 per cent recorded in 2005.

That has meant Berthiaume sees 30 to 40 low-income families a year unable to pay for funeral services even with a combination of government and private benefits. Four decades ago, when he first started in the family business, Berthiaume said there were about five cases a year.

He said he and other funeral services in Canada regularly cover the shortfall out of their own pockets.

The death benefit is paid to an estate, executor named in a will or an administrator named by the court.

If no estate exists, or an executor hasn’t applied for the death benefit, the payment would go first to whoever covered funeral costs, then to the surviving spouse or common-law partner, and lastly next of kin — a priority list that causes bureaucratic headaches for a relatively small payment.

An undated document recently created by officials at Employment and Social Development Canada said the hierarchy creates “a complex administrative process” that causes ”delays in benefit payments.” The Canadian Press obtained a copy of the document under the access-to-information law.

Berthiaume’s association has asked governments to consider allowing families the option to direct the death benefit to licensed funeral service providers to offset costs. The association argues this would reduce administration costs.

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Citing stability, B.C. Premier calls snap election for Oct. 24

John Horgan meets with Lieutenant Governor to request vote

Nanaimo RCMP resumes fingerprinting, police information check services

Certain services now available by appointment at detachment

Masks and temperature checks now mandatory to enter Nanaimo’s Woodgrove Centre

Mall says it’s the first in B.C. to put the measures in place

Snuneymuxw, province sign land transfer agreement that includes parts of Mount Benson

First Nation sees economic development opportunities through forestry partnerships

Islands Trust Conservancy gets funding for protection of at-risk species

Conservancy manages habitat for more than 25 plant and animal species at risk

COVID-19: 4 more deaths, 366 new cases in B.C. since Friday

A total of 8,208 people in B.C. have tested positive for COVID-19 since January

First full day of B.C.’s election campaign begins amid COVID-19 pandemic

B.C. Liberal Leader Andrew Wilkinson and the Green party’s Sonia Furstenau criticized John Horgan’s decision

RCMP issue two $2,300 COVID fines at same Metro Vancouver vacation rental within 24 hours

Cpl. Mike Kalanj said it was ‘quite frankly appalling’ to see parties breaking COVID-19 rules

Here’s how voting amid a pandemic will happen in B.C.

Elections BC has worked with the provincial health office to determine safety protocols for voting

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

B.C. privacy commissioner will hear First Nations complaints about COVID

The hearing will rely on written submissions from the Indigenous governments as well as the Ministry of Health

Majority of Canadians support wearing masks during COVID-19, oppose protests: poll

Nearly 90 per cent felt wearing a mask was a civic duty because it protects others from COVID-19

Paper towel in short supply as people stay home, clean more, industry leader says

While toilet paper consumption has returned to normal levels, paper towel sales continue to outpace pre-COVID levels

Most Read