2023-08-02 23:30:00
Losing a spouse is painful on a personal level, but can also lead to financial difficulties. Allowances can give you a significant boost when your spouse dies.
The federal and provincial governments pay allowances to the surviving spouse under certain conditions. Here’s what you need to know and what the criteria are to qualify.
Allowance for the survivor
If you are between the ages of 60 and 64, reside in Canada and your spouse or partner is deceased, you may be eligible for the Allowance for the Survivor. This monthly payment is tax-free and is intended to help those who are not yet eligible for the Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS). This is why it ends following 65 years.
“Our income must be below a determined threshold and we must not be remarried or re-engaged in a de facto relationship”, specifies Hadi Ajab, independent financial planner and financial security advisor, collective savings representative attached to Investment Services PEAK. The maximum annual income for 2022 is $28,512.
If we meet all the conditions, we might then receive up to $1581.51 per month. This amount concerns the period from July to September 2023, and is indexed every three months.
You should also know that at the federal level, a de facto spouse is a person with whom you have lived for at least 12 months in a conjugal relationship without interruption for more than 90 days, or with whom you have had a child or adopted a child.
The surviving spouse’s pension
The provincial government can grant a basic income to the surviving spouse. This pension is paid throughout life, from the month following death. For this, two criteria must be met: the person must qualify as the spouse of the deceased person, and the latter must have contributed sufficiently to the QPP during his working life.
“At the provincial level, to be considered a spouse, you must have been married or in a common-law relationship, or have lived together for three years with the person. One year is enough if a child is born or to be born, or a child has been adopted”, specifies Hadi Ajab.
Good to know: even if the spouse of the deceased person remarries or enters into a civil union, he will continue to receive his surviving spouse’s pension. In addition, if the deceased person was not married or in a civil union or was legally separated, the pension will be paid to the person recognized as being their de facto spouse. Conversely, the de facto spouse is not eligible for a pension if the deceased person was still married or in a civil union with another person and not legally separated or divorced. Under these conditions, it is her former spouse or common-law partner who would benefit from the pension.
Moreover, if the death occurs in the first year of the marriage or civil union, certain additional rules apply.
Contributions recorded in the file of the deceased person
As for the sufficient contribution to the QPP, the deceased spouse must have contributed for 10 years or more, or at least 1/3 of the contribution period, for a minimum of three years. Here’s an example: let’s say a person dies at age 35. His contribution period starts at 18 and should therefore represent 18 years until he is 35 years old. He would therefore have to have contributed for at least six years (one-third) for this condition to be met.
The amount of the pension varies and depends on several factors, in particular the QPP contributions recorded in the file of the deceased, the age of the beneficiary, if the latter is recognized as disabled, if he receives retirement pensions and if there is dependent children. For example, at the rate valid until December 31, 2023, the maximum payment that a person aged 45 to 64 might receive, regardless of their situation, is $1,064.81 per month. For the other categories and age brackets, the amounts vary.
ADVICE
Even if your spouse is not deceased, be aware that you may be eligible for a federal allowance if you are between the ages of 60 and 64, live in Canada and your spouse or common-law partner is eligible for the GIS. The maximum annual income to be able to receive this allowance is $39,168 and includes all the couple’s combined income, excluding OAS and GIS. The maximum monthly payment from July to September 2023 is $1326.69, indexed every three months. This benefit is not taxable. It is essential to file your tax return each year before April 30, so that your benefits are not suspended until the tax authorities receive your information.
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