Supreme Court of Canada Weighs In on Death Benefits
Last week, the Supreme Court of Canada [“SCC”] released a decision which considered whether age-based reductions in death benefits paid to the surviving spouses of civil servants and military members violated equality provisions found in s. 15(1) of the Charter of Rights and Freedoms [the “Charter”].
Withler v. Canada (Attorney General) involved an appeal of two class action lawsuits by the representative plaintiffs [the “appellants”] in the actions. The appellants were widows whose supplementary death benefits were reduced because of the age of their respective husbands at death.
Both the Public Service Superannuation Act and the Canadian Forces Superannuation Act, provide military members, federal civil servants, and their families a lump sum death benefit (paid to the plan member’s designated beneficiary) on the plan member’s death. The size of the lump sum starts being reduced once the plan member reaches a designated age [the “reduction provisions”].
The appellants argued that the reduction provisions in both Acts discriminated on the basis of age and violated the equality provisions in s. 15(1) of the Charter. The Attorney General of Canada [the “AG”] argued that although the reduction provisions distinguished on the basis of age, the distinction did not violate the equality provisions and did not amount to discrimination.
Ultimately, the SCC agreed with the AG’s position and dismissed the plaintiffs’ appeal. Writing for the Court, Chief Justice McLachlin and Justic Abella found that while the distinctions clearly fell under one of the protected grounds of the s. 15(1) equality provision in the Charter (i.e. age), they were not discriminatory in nature. They found that the death benefit was not meant to be a long term income stream but was instead akin to life insurance.
They further held that although it was true that surviving spouses of older members were entitled to lesser death benefits, those same spouses also had access to other pensions and benefits that the spouses of younger members couldn’t access.
The Globe and Mail reports that the feds are currently paying out $138 million in survivor benefits and this ruling will affect about 5000 plan members.