CPP, OAS and Benefit Payments After Death: What to Return in Ontario

After a death, money sometimes keeps arriving: a CPP or OAS deposit, a benefit cheque, a payment addressed to the person who has passed. It is natural to wonder whether you can keep it, spend it on expenses, or must send it back.

This article explains the general rules for CPP, OAS and CRA benefit payments after death, and how they connect to the final tax return. Credits such as the GST/HST credit have their own rules, so ask the CRA or an accountant about those for your situation.

CPP and OAS: what is kept and what goes back

CPP and OAS payments are payable for the month of death. All payments issued after the month of death must be returned. If a direct deposit lands in the bank account after that, ask the bank to return it, or send a cheque to the Receiver General for Canada.

If the money has already been redeemed or spent, it must still be repaid. Do not assume the bank will sort it out. Tell Service Canada and the bank what happened so the record is clear.

Notify the CRA and handle benefit payments

Notify the CRA of a death as soon as possible, by phone or with Form RC4111. This helps stop payments that should not continue and keeps the account accurate.

Benefit payments such as the Canada Groceries and Essentials Benefit and the Canada Carbon Rebate that are issued after death should be returned. There is one exception worth knowing: if the deceased was single and died during or after the scheduled payment month with an uncashed payment, return it so the CRA can send it to the estate.

Children and the Canada child benefit

If the surviving spouse is the child's parent, the CRA usually transfers the Canada child benefit payments to that parent. If someone else is now primarily responsible for the child, they must apply, through My Account or Form RC66. Do not wait for the payments to sort themselves out, since the application is what puts the benefit in the right hands.

How benefits and related income affect the final return

A final T1 return must be filed for every person who dies, and the legal representative files it. The Canada workers benefit for the final year is claimed on line 45300 of that return.

Some post-death payments are reported by the person who receives them rather than by the estate. For example, a T3 return is not needed if the only post-death income is reported by a beneficiary, such as a CPP or QPP death benefit. Income earned but not received before death, such as unpaid salary, is called rights or things, and it can go on an optional return rather than the final return.

Which amounts belong on which return can be technical. An accountant can confirm the right treatment for your family's mix of income and benefits.

What to do next

• List every deposit and cheque received after the date of death, with dates and amounts.
• Call or write to Service Canada about CPP and OAS, and return any payments issued after the month of death.
• Notify the CRA, by phone or Form RC4111.
• Return CRA benefit payments issued after death, except where an uncashed payment should go to the estate.
• If children are involved, make sure the right caregiver has applied for the Canada child benefit.
• Keep records of every return of funds, and bring them to whoever prepares the final tax return.

If the estate owes the CRA and a deadline slips because of the death or illness, the CRA can cancel or waive penalties and interest in some cases, though meeting the criteria does not guarantee relief.

Frequently asked questions