Kitchener widow denied CPP benefits because of age takes feds to appeals tribunal

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OTTAWA—Daniel Derksen was, by all accounts, the model of perfect health.

Then one day, he complained about stomach pains and went to see a doctor. Four months later, he died, the result of an aggressive cancerous tumour that didn’t respond to chemotherapy, radiation or multiple surgeries.

He was just 38.

His wife of 11 years, Jilian, was denied survivor benefits through the Canada Pension Plan. She is now challenging the rule to the federal government’s final appeals body, the social security tribunal, arguing it is based on faulty logic.

Anyone under age 35 who loses a spouse only receives CPP survivor benefits if they have children or a disability. Jilian, who was 10 weeks shy of her 35th birthday when Derksen died, has neither.

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Instead, she will have to wait 30 years to collect his benefits — 60 per cent of what he’d have been eligible for in retirement, adjusted for inflation from date of death — even though she needs the money now.

Jilian had to cover $20,000 in funeral costs. Derksen had no life insurance nor work benefits; he’d been off work shortly before his illness, the result of a car accident. Nor did the couple have mortgage insurance.

“I had to sell my home that he built for us,” she said. “That was our dream home that we built together, and I had to lose that too, on top of everything.”

The age rule is in place because a survivor with no children or disability ought to be able to adapt financially to the loss of their partner by going back to work, the government argues. The survivor’s pension, by design, provides increased benefits to those deemed least able to recover financially.

A 2004 Statistics Canada research paper found that in the year after a husband’s death, widows in higher income brackets saw sharper declines in their household income, but cautioned that “over the longer term, their situation could be quite different.”

Experts contacted for this story couldn’t point to any definitive data to suggest that younger widowers do better financially over time.

When finance ministers agreed last year to changes to the CPP, they amended the way survivor benefits are calculated, but not the age requirements. CPP is subject to a regular review, the results of which are to be released next year.

At an event last month touting the CPP changes, Finance Minister Bill Morneau said measures like the survivor benefit would be part of ongoing discussions with provincial counterparts, whose approval is required for any changes to CPP.

“For additional enhancements or changes to the Canada Pension Plan, it requires us to consider them together with the provinces and to think about the impacts, both positive and negative: how they will positively impact people, what the cost will be for people in terms of the savings they put in place,” Morneau said at the time.

“As we look at those measures, as we look at the implications, then we come together to deliberate.”

As part of the changes to CPP, the finance ministers agreed to make changes to how survivor benefits were calculated, but only on the new, enhanced portion of the public pension plan. No other changes were made to survivor benefit rules.

Jilian Derksen first applied for survivor benefits in 2016 and Service Canada says her forms were filled out correctly.

Following a phone call from a Service Canada agent, a rejection letter and a call from the office of her local MP, Marwan Tabbara, Service Canada took a second look at her request, but maintained its position.

The department was able to discuss the details of the file because she agreed to waive her right to privacy so The Canadian Press could verify portions of her story.

“Unfortunately, she was not eligible for the CPP survivor’s pension because she was under 35 at her husband’s time of death, not disabled and not a raising a dependent child,” an ESDC spokeswoman said.

“Mrs. Derksen will be able to reapply for the CPP survivor’s pension once she turns 65, or sooner if she becomes disabled.”

Derksen doesn’t even know to how much she will be entitled when that time comes.

“They don’t even want to tell you what the compensation would be,” she said. “They don’t even want to calculate it for you.”

A few quick facts about survivor benefits under the Canada Pension Plan

The Canada Pension Plan pays out survivor benefits to a surviving spouse, common-law partner, estate, or dependent children. Here are a few things to know about the benefit:

1. There is an age limit on when it is paid out. No one under age 35 can receive the benefit unless they have children or are disabled. Payments only start when the surviving spouse turns 65, or becomes disabled. Children of the deceased under 25 are also eligible for a monthly benefit.

2. The value of the benefit changes based on the age of the surviving spouse:

3. People receiving survivor and retirement benefits get them blended into one payment that’s usually lower than their combined value. That cap has been lifted on the new, enhanced portion of CPP that won’t take full effect for four decades.

4. The value of the retirement benefit changes depending on when you take it: The benefit amount is adjusted downward for each month you took the benefit before age 65. There is an opposite effect if you wait take the benefit after age 65.

5. A maximum $2,500 death benefit can be made to an estate, surviving spouse or next-of-kin.