Why a power of attorney doesn’t automatically cover federal benefits

The lawyer’s office is satisfied, the document is signed and witnessed, and the family feels that the paperwork is done. Then a daughter calls the pension line about her father’s CPP and is told politely that the agent cannot discuss his file with her. Nothing is wrong with the power of attorney. It simply has not yet been shown to the federal government in the way the federal government requires.

This is the last part of our series When there are two of you, and it applies equally to adult children acting for a parent.

A strong document with a narrow audience

A power of attorney for property is created under provincial law. Banks, land registries and other bodies in the province rely on it every day. But Service Canada, which pays CPP and Old Age Security, and the Canada Revenue Agency, which handles tax and credits, are federal bodies with their own privacy obligations and their own records. Each wants to see the document, check it, and note on the person’s file who may act for them. Until that happens, the attorney is, for their purposes, a stranger.

Service Canada: showing the document

Service Canada’s instructions for its consent form set out the position. A legal representative, “someone with a power of attorney granted from you, or a trustee,” can ask to change information such as the payment address or direct deposit. That person does not need to complete the consent form, “but they have to provide a certified copy of the legal document.”

Once the representative is recorded, the same instructions say that all communications will be made through that legal representative. There are practical consequences: Service Canada notes, for instance, that the online OAS application is not available where a third party, such as a power of attorney or a trustee, is managing the OAS account. Paper applications and the phone line remain.

The lighter option: consent to communicate

Many families do not need full authority. They need someone who can phone Service Canada with a parent and ask questions. For that there is a separate form, Consent to Communicate Information to an Authorized Person (ISP-1603), and for OAS an equivalent option in My Service Canada Account.

Its limits are written into the form: it “does not provide authority for the person to apply for benefits for you, change your payment address or request/change voluntary tax withhold.” It is valid only if Service Canada receives it within one year of signing, and it ends on the death of the person who gave it. It is a way to talk, not a way to act.

When there is no power of attorney

Sometimes a person loses capacity before any power of attorney is made. For CPP and OAS, Service Canada has a trusteeship process. A medical professional completes a Certificate of Incapability (ISP-3505), and the proposed trustee completes an agreement to administer the benefits: ISP-3506 for a private individual, or ISP-3507 for an agency or institution such as a care home. The forms are mailed to Service Canada.

A trustee manages the federal benefit only. It does not give authority over a bank account, a house or a tax return, which is why the provincial power of attorney remains worth making while it still can be.

The CRA keeps its own list

The CRA distinguishes two kinds of helper. An authorized representative is someone the taxpayer chooses to let deal with the CRA. The taxpayer can set this up in My Account, the representative can request it through Represent a Client, or the paper form AUT-01, Authorize a Representative for Offline Access, can be used for phone, mail, fax and in-person access. The CRA says the AUT-01 must reach it within six months of signing, or it will not be processed.

A legal representative is different: the CRA includes a person named as power of attorney, or appointed by a court as guardian, trustee or committee. The CRA says such a person must register for Represent a Client before sending a copy of the legal documents, and notes that it does accept foreign powers of attorney. Our guide to what to look for in CRA My Account once a year suggests checking the list of representatives annually.

The arrangements side by side

When the authority ends

A power of attorney ends when the person dies. From then on, the estate is handled by the executor named in the will. For the CRA, the legal representative of a deceased person is typically that executor, who provides the death certificate (or a funeral director’s statement) and the document naming them; where there is no will, the CRA uses form RC552. On the pension side, survivors and estates have their own applications, described in why a CPP pension and a CPP survivor’s pension don’t simply add up.

A sensible order of steps

1. Make the provincial power of attorney while the person has capacity, with a lawyer or using the province’s official forms.
2. Obtain certified copies.
3. Provide a certified copy to Service Canada for CPP and OAS, and ask that it be recorded on both.
4. Register with Represent a Client and send the documents to the CRA, or set up an authorized representative if that is all that is needed.
5. Check that deposits go to an account in the person’s own name; see what to do when your bank account changes.
6. Keep a note of what was sent, when and to whom.

Who this matters for

• Adult children helping a parent with pensions and taxes.
• Spouses who handle the household paperwork for both partners.
• Families where a parent is moving into long-term care, where these steps often become urgent; see what changes in the budget when a parent moves into long-term care.

None of these steps involves a fee to the government, and none should involve giving anyone a parent’s passwords. A website, including this one, cannot register a representative for you.

The lesson

A power of attorney is necessary but not sufficient for federal benefits. Service Canada and the CRA each need to receive it, in their own way, before the attorney can act. Doing that early, while everyone is well, is far easier than doing it in a hospital corridor.