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

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

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

Surrey RCMP Gang Enforcement Team street check. (File photo)
Surrey RCMP gang enforcement team seizes five vehicles

This was over 13 days, as SGET continues to target gang activity in this city

File photo
Surrey to borrow $150 million for three major recreation projects

That’s for a sports complex in the city centre, a sports and ice complex in Cloverdale and a community centre in Newton

A memorial remains near the site of where South Surrey mechanic Paul Prestbakmo was killed in August 2019. (Tracy Holmes photo)
Tim Baillie, the “Supreme Commander” of Toque Tuesday events in Surrey, at Surrey Civic Plaza in 2018. (File photo: Bala Yogesh)
Ball hockey scrubbed, Surrey’s ‘Toque Tuesday’ turns to drive-thru collection to help homeless

‘Clean out your closets and stop by from 11 a.m. to 1 p.m.,’ urges the event’s ‘Supreme Commander’

Rolling seven-day average of cases by B.C. health authority to Jan. 21. Fraser Health in purple, Vancouver Coastal red, Interior Health orange, Northern Health green and Vancouver Island blue. (B.C. Centre for Disease Control)
2nd COVID vaccine doses on hold as B.C. delivery delayed again

New COVID-19 cases slowing in Fraser Health region

Langley activist Dorscie Paterson celebrated her 108th birthday on Monday, Jan. 25 at the Cedar Hill long term care facility. Because of the pandemic, she remained inside, able to see, but not shake hands with visitors. (Dan Ferguson/Langley Advance Times)
VIDEO: Celebrating a 108th birthday without physical contact

Pandemic required Langley woman to stay behind a window

A woman wearing a protective face mask to curb the spread of COVID-19 walks past a mural in Victoria, B.C., on Monday, Dec. 7, 2020. THE CANADIAN PRESS/Marissa Tiel
Five big lessons experts say Canada should learn from COVID-19:

‘What should be done to reduce the harms the next time a virus arises?’ Disease control experts answer

A Vancouver Police Department patch is seen on an officer’s uniform as she makes a phone call. THE CANADIAN PRESS/Darryl Dyck
Vancouver man calls 911 to report his own stabbing, leading to arrest: police

Officers located the suspect a few blocks away. He was holding a bloody knife.

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Vernon has agreed to a goose cull to control the over-populated invasive species making a muck of area parks and beaches. (Morning Star file photo)
Okanagan city pulls the trigger on goose cull

City asking neighbours to also help control over-population of geese

FILE – Canadian Prime Minister Justin Trudeau delivers his opening remarks at a news conference outside Rideau cottage in Ottawa, Tuesday, January 19, 2021. THE CANADIAN PRESS/Adrian Wyld
Vaccine CEO ‘very, very clear’ that Canada’s contracts will be honoured: Trudeau

Trudeau says he spoke to Moderna CEO on the morning of Jan. 26

Ben Tyler was working on a Nicola area ranch when he disappeared. File photo
Ben Tyler was working on a Nicola area ranch when he disappeared. File photo
2 years after his riderless horse was found, police believe Merritt cowboy was killed

Two years after he went missing, Ben Tyner’s family makes video plea for information

Most Read