View source for How Do I Divide Our CPP Pensions after We're Divorced?

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In Canada, the process of dividing Canada Pension Plan (CPP) credits between spouses upon divorce or separation is known as ''credit splitting''.

CPP credits are accumulated through mandatory CPP payroll deductions from employment income. These credits accumulate over time and are used to calculate the amount of monthly CPP benefit payments each person will begin to receive when they reach the age of 65, or earlier if they choose, or later if they defer their pension.

Both divorced married spouses and separated unmarried spouses may apply for a credit split. British Columbia is one of the provinces where couples can opt ''not'' to split their CPP credits, and some people do opt out because of how CPP benefits are calculated when ''child rearing drop out'' years are factored in. In some cases the amount that one person loses in the split is actually more than what the other person gains. In other words, the split may cause an overall loss in the value of the pension (for example, $100 per month that neither person is getting that would have been there for one of them if the credits had not been split). It's worth getting financial advice for this reason. If you do decide to opt out of credit splitting, you must have either a court order or a separation agreement that explicitly states that the credits will not be split. In the absence of such documentation, either former spouse can apply for a credit split without the other's consent.

The amount of CPP credits to be split is calculated based on each spouse's accumulated credits during the relationship, adjusted for factors such as periods of parental leave and the child rearing drop out years mentioned above. The total amount is then divided between the spouses. For those who have had lower income than their former spouse, credit splitting can increase the amount of CPP pension they will eventually receive.

There is no time limit to apply for a credit split, unless your spouse dies, in which case you must apply within 36 months of the date of death. Given that some people don’t have ongoing relationships with their spouses following separation, it's advisable to make the application for the equalization of your CPP credits sooner rather than later.

To apply for a credit split, you can either apply online or use a paper form available from Service Canada. Legal representatives, such as lawyers, can also act on a client's behalf in this process.

<blockquote>1-800-277-9914<br>
https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-split-credits.html</blockquote>

For more information on property division when spouses separate, you may wish to review the chapter [[Property and Debt in Family Law Matters]].

{{REVIEWED | reviewer = [[Trudy Hopman]], September 22, 2023}}

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