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

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.

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

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

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Trudy Hopman, September 22, 2023.

JP Boyd on Family Law © John-Paul Boyd and Courthouse Libraries BC is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 2.5 Canada Licence.

Normally referred to as the "Supreme Court of British Columbia," this court hears most of the trials in this province. The Supreme Court is a court of inherent jurisdiction and has no limits on the sorts of claims it can hear or on the sorts of orders it can make. Decisions of the Provincial Court are appealed to the Supreme Court; decisions of the Supreme Court are appealed to the Court of Appeal. See "Court of Appeal," "jurisdiction," "Provincial Court" and "Supreme Court of Canada."

A court established and staffed by the provincial government, which includes Small Claims Court, Youth Court, and Family Court. The Provincial Court is the lowest level of court in British Columbia and is restricted in the sorts of matters it can deal with. It is, however, the most accessible of the two trial courts and no fees are charged to begin or defend a family law proceeding. The Family Court of the Provincial Court cannot deal with the division of family property or any claims under the Divorce Act. See "Divorce Act," "judge" and "jurisdiction."

A mandatory direction of the court that is binding and enforceable upon the parties to a court proceeding. An "interim order" is a temporary order made following the hearing of an interim application. A "final order" is a permanent order, made following the trial of the court proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to appeal. Failing to abide by the terms of an order may constitute contempt of court. See "appeal," "consent order," "contempt of court," "decision" and "declaration."

A contract intended to resolve all or some of the legal issues arising from the breakdown of a relationship and intended to guide the parties in their dealings with one another into the future. A typical separation agreement is signed following a settlement reached through negotiation and deals with issues including guardianship, parenting arrangements, contact, support, the division of property, and the division of debt. See "family law agreements."

Under the Divorce Act, either of two people who are married to one another, whether of the same or opposite genders. Under the Family Law Act, spouse includes married spouses, unmarried parties who have lived together in a marriage-like relationship for at least two years, and, for all purposes of the act other than the division of property or debt, unmarried parties who have lived together for less than two years and have had a child together. See "marriage" and "marriage-like relationship."

(1) Agreement, or (2) the giving of permission for a thing to happen or not happen.

In family law, the decision of one or both parties to terminate a married or unmarried relationship; the act of one person leaving the family home to live somewhere else with the intention of terminating the relationship. There is no such thing as a "legal separation." In general, one separates by simply moving out, however, it is possible to be separated but still live under the same roof. See "divorce, grounds of."

(1) Intentionally doing a thing, or (2) a law passed by a government, also called "legislation" or a "statute." See "regulations."

Something which can be owned. See "chattels" and "real property."

In law, the re-examination of a term of an order or agreement, usually to determine whether the term remains fair and appropriate in light of the circumstances prevailing at the time of the review. In family law, particularly the review of an order or agreement provided for the payment of spousal support. See "de novo," "family law agreements," "order" and "spousal support."