Estate Planning

Pension Cheque Misadventure

By Hull and Hull LLP

When I read a recent article about Mr. Butler, an unemployed Ottawa man who had been cashing his father's government pension cheques for seven years after his death (totaling about $115,000), I couldn't help but get just a little annoyed.  Reportedly, he spent most of it at strip clubs - another irritating fact!

How this apparently happened was that after his father's death, his pension cheques continued to be directly deposited into their joint bank account.  The bank was never notified of the death. Mr. Butler asserts that he had assumed the payments were either government child benefits or survivor benefits (interesting twist given that his father was reportedly a longtime accountant for the federal government).  

While Mr. Butler pleaded guilty to the fraud (and was placed under house arrest for a year), he filed for bankruptcy to avoid paying the restitution Order obtained. Unfortunately, the money will never be reimbursed. Ironically, Mr. Butler turned 65 during his house arrest and started collecting a pension himself. 

I fear this type of thing happens much more often then one would expect, although likely on a smaller scale. I wonder if in cases such as this whether the government has ever sought restitution by garnishing pension funds (or getting the Court's authority to do so, if needed)? I can appreciate at least two sides to this question – I suppose when there is an unwitting recipient of government funds, taking part or all of their pension away could be seen as a harsh result. That said, receiving thousands of dollars in tax-payers hard-earned money with impunity (albeit innocently) is arguably unfair to the public.  If any practitioner in the area knows the answer to this question I would be happy to hear from him/her. 

Have a great weekend! 

Natalia R. Angelini - Click here for more information on Natalia Angelini.

Full post as published by Toronto Estate Law Blog on August 27, 2010 (boomark / email).