The article “How Does Assisted Dying Impact Survivor Pensions?” was originally published on MoneySense on October 26, 2020.
Content warning: This article contains discussion of assisted dying and suicide, which may be upsetting to some readers. We have turned off commenting for this article to create a safe space for the person who submitted this question. But any comments for the MoneySense team can be directed at email@example.com.
Brian is terminally ill and wants to ensure his wife is financially cared for.
Q. I am 84 and in poor health, suffering with two cancers. I currently receive a public service pension from the federal government and my Canada Pension Plan benefits.
If I should decide to have assisted suicide, would that affect the pensions my wife would receive?
A. I am so sorry to hear about your health issues, Brian. And it must be incredibly difficult to be worried about how the way you die might impact your wife’s income.
Federal assisted dying legislation was passed in Canada in 2016. Medical assistance in dying, or MAID, can be facilitated by physicians across Canada, as well as nurse practitioners in some provinces. They can assist in the process without being charged under criminal law but must follow the rules set out in the Criminal Code, as well as provincial and territorial health-related laws, rules and policies.
As part of the Act that was assented to in 2016 in order to amend the Criminal Code, the enactment also made “related amendments to other Acts to ensure that recourse to medical assistance in dying does not result in the loss of a pension under the Pension Act.” The definition of improper conduct, including suicide, was amended to reflect a “willful self-inflicted wounding—except if the wound results from the receipt of medical assistance in dying.”
As a result, Brian, your wife should be eligible for survivor benefits if you choose to obtain medical assistance in dying. Regardless, you should confirm this with your pension plan administrator and seek legal input from professionals on other matters related to your situation.
The Canada Pension Plan (CPP) has a death benefit payable to the estate of the deceased and a survivor’s pension payable to a spouse or common law partner as well.
The CPP death benefit is $2,500 for eligible contributors. You must have made CPP contributions for at least one-third of the calendar years in your contributory period (and no less than three years), or at least 10 calendar years to qualify, Brian.
Assuming your wife is over the age of 65, the CPP survivor’s pension payable to her will be 60% of your retirement pension combined with her retirement pension, not to exceed the maximum retirement pension. The maximum for 2020 is $1,175.83 per month.
Your Old Age Security (OAS) pension will stop upon your death, as the OAS Allowance for Survivor is only payable to low income spouses who are aged 60 to 64.
Defined benefit (DB) pension plans often provide survivor benefits to be paid to a surviving spouse upon the death of a pension plan member. You should check your pension documents or contact your administrator, Brian, to determine your wife’s potential entitlement. Some pensions allow recipients to choose between different survivor options before their pension begins.
Defined contribution (DC) pensions and other registered investment accounts, like a Registered Retirement Savings Plan (RRSP), can be left to your estate to be distributed under the terms of your will or, commonly, to your spouse on a tax-deferred basis. A tax free savings account (TFSA) may be eligible to transfer to your spouse’s TFSA on a tax-free basis without impacting their TFSA room.
There may be other estate implications for medical assistance in dying, such as for critical illness or life insurance policies. You should review any policies you have and contact the issuer to validate the implications as well. Life insurance policies may have exclusions during the first two years after being issued, for example, to preclude paying a benefit if the insured dies by suicide.
The Canadian Life and Health Insurance Association has stated, however, “the industry’s position is that member companies would not treat deaths resulting from MAID as a ‘suicide’ for policy purposes provided the legislated process has been followed.”
It sounds to me like your federal government pension, CPP death benefit and survivor’s pension will be payable to your wife, Brian, even if you opt for medical assistance in dying. I appreciate you considering my input on this question about a very sensitive matter for you and your family. I would, however, suggest you seek estate and tax advice on your personal situation to consider the potential tax, probate and estate administration implications.
Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.