Divorced or separated: Splitting Canada Pension Plan credits

From: Employment and Social Development Canada The Canada Pension Plan (CPP) contributions you and your spouse or common-law partner made during the time you lived together can be equally divided after a divorce or separation. This is called credit splitting. Credits can be divided even if 1 spouse or common-law partner did not make contributions to the CPP. Credit splitting may help you qualify for benefits and can affect the amount of any current or future benefits under the CPP program for both you and your former spouse or common-law partner. The division of these credits is permanent.

Step 1 Do you qualify

Eligibility for CPP credit splitting varies depending on when you divorced or separated, and whether you were married or living in a common-law relationship. You are not permitted to credit split when:

the total pensionable earnings of the spouses, former spouses or former common-law partners, in a year, was not more than twice the Year’s Basic Exemption
the period of time is before 1 of the spouses, former spouses, or former common-law partners reached age 18
the period of time is after a spouse, former spouse or former common-law partner reached age 70
the period of time that 1 of the spouses, former spouses, or former common-law partners was a beneficiary of a retirement pension under the CPP or Quebec Pension Plan (QPP), or
the period of time that 1 of the spouses, former spouses, or former common-law partners was considered to be disabled for the purpose of the CPP or QPP disability benefit

The following are basic eligibility factors relating to credit splitting:

If your marriage ended in divorce or annulment

If your marriage ended in divorce or annulment on or after January 1, 1987, you may qualify for a credit split if:

you lived with your former spouse for at least 12 consecutive months, and
you or your former spouse notifies Service Canada and provides the necessary information (there is no time limit)

Note: Spousal agreement

Generally, a spousal agreement does not prevent a credit split. However, the following agreements can prevent a credit split:

spousal agreements entered into before June 4, 1986
spousal agreements in Quebec, Saskatchewan, British Columbia and Alberta that have a provincial law allowing couples to agree not to split CPP pension credits

If your marriage ended in divorce or annulment between January 1, 1978 and December 31, 1986, you may qualify for a credit split if:

you lived with your spouse for at least 36 consecutive months
the divorce or annulment was recognized by Canadian law, and
you or your former spouse applied in writing and sent us the necessary documents within 36 months after your marriage ended

If your marriage ended in divorce or annulment before January 1, 1978, you do not qualify for a credit split. The Canada Pension Plan credit split did not exist before January 1, 1978.

Note: Late application

If you did not apply within 36 months after the end of your marriage, your pension credits can be divided only if your former spouse is still alive and agrees in writing to waive the 36-month time limit.

If you are separated

If you are still married and your separation occurred on or after January 1, 1987, you may qualify for a credit split if:

you lived with your spouse for at least 12 consecutive months
you have been living apart for at least 12 consecutive months, and
you or your spouse applies in writing and sends us the necessary documents

Note: Deadline to apply

There is no time limit to apply, unless your spouse dies, in which case you must apply within 36 months of the date of death.

If your common-law union ended

If your common-law union ended on or after January 1, 1987, you may qualify for a credit split if:

you lived with your former common-law partner for at least 12 consecutive months
you have been living apart for at least 12 consecutive months (except in the case where your former common-law partner died during this period, in which case you may still qualify), and
you or your former common-law partner applies in writing and sends us the necessary documents within 48 months of the date you began living apart (unless your former common-law spouse is still alive and agrees in writing to waive the 48-month time limit)

Note: Common-law unions

Common-law unions were not recognized for the purposes of credit splitting prior to January 1, 1987.

If you worked or lived in Quebec

If you and your spouse or common-law partner have contributed only to the Quebec Pension Plan (in other words, neither you, nor your spouse, has ever worked outside Quebec), contact Retraite Québec to find out about the eligibility rules under the QPP.

If you or your spouse or common-law partner worked in both Quebec and other provinces over the years and therefore paid into both plans, credit splitting will be more complex. Both laws must be checked to see if credits can be split in your case and to establish the period of the split.

If you are living in a province or territory other than Quebec and have contributed to both the CPP and QPP, contact the Canada Pension Plan for advice
If you are living in Quebec and you want to request a credit split, contact Retraite Québec , which administers the QPP

Step 2 How much you could receive

The impact of a credit split can vary considerably, depending on your circumstances. In some cases, a credit split can have a major impact on future CPP benefit amounts.

In other cases, the impact of a credit split may be small. For instance, there are features of the CPP that protect your benefits from being reduced if you have some low earning years. These features are called the general drop-out provision and the child-rearing provision. If the time that you and your spouse or common-law partner cohabited overlaps with 1 of your "drop-out" periods, then there may be very little impact from the credit split. But the "drop-out" period would still work to your advantage.

Example

Maria and John started living together in 1985 when she was 24 and he was 22. John was working a construction job that was paying him a good salary. Maria was working in a day care centre.

They were married in 1987. A year after they were married, Maria decided to go back to school to study nursing. She graduated in 1992 and began working in the local children's hospital.

In 1993, John lost his job and was out of work for almost 3 years. He found work in 1996 but by then the marriage was not working, and Maria and John decided to separate.

Following their separation in 1997, John contacted the CPP to apply for a division of pension credits for the time he and Maria lived together. Their earnings from 1985 to 1996 were added together and divided equally between them, as illustrated in Tables 1 and 2 below.

Table 1 shows John's and Maria's records of earnings during the time they lived together. Table 2 shows their earnings after their CPP pension credits were split between them. The last calendar year a couple is together is always excluded from the division.

This "credit split" is a permanent change to both John and Maria's records of earnings. The amount of any CPP benefit that either of them may be eligible for in the future will be based on the revised earnings in Table 2.

Table 1: John and Maria's records of earnings before the credits were divided

Year	John's earnings	Maria's earnings	Years eligible for credit splitting
1982	$16,500	$14,000	No
1983	$18,500	$14,000	No
1984	$20,800	$14,000	No
1985	$23,400*	$14,200	Yes
1986	$25,800*	$14,600	Yes
1987	$25,900*	$14,700	Yes
1988	$26,500*	$9,600	Yes
1989	$27,700*	$0	Yes
1990	$28,900*	$0	Yes
1991	$30,500*	$0	Yes
1992	$32,200*	$23,500	Yes
1993	$22,500	$33,400*	Yes
1994	$0	$34,400*	Yes
1995	$0	$34,900*	Yes
1996	$18,300	$35,400*	Yes
1997	$22,500	$35,800	No
1998	$22,900	$36,300	No
1999	$23,500	$36,800	No

* Maximum earnings for the year.

Table 2: John and Maria's records of earnings after the credits were divided

Year	John's earnings	Maria's earnings	Years eligible for credit splitting
1982	$16,500	$14,000	No
1983	$18,500	$14,000	No
1984	$20,800	$14,000	No
1985	$18,800	$18,800	Yes
1986	$20,200	$20,200	Yes
1987	$20,300	$20,300	Yes
1988	$18,050	$18,050	Yes
1989	$13,850	$13,850	Yes
1990	$14,450	$14,450	Yes
1991	$15,250	$15,250	Yes
1992	$27,850	$27,850	Yes
1993	$27,950	$27,950	Yes
1994	$17,200	$17,200	Yes
1995	$17,450	$17,450	Yes
1996	$26,850	$26,850	Yes
1997	$22,500	$35,800	No
1998	$22,900	$36,300	No
1999	$23,500	$36,800	No

Case study summary: Credit splitting

1985 – Maria and John begin living together
1987 – Maria and John marry
1988 – Maria left work to go to university
1992 – Maria goes back to work
1993 – John loses his job
1996 – John goes back to work
1997 – Maria and John separate
1998 – CPP pension credits earned during their years together are added and divided equally between both Maria and John

Step 3 When to apply

The division of the CPP credits that you or your spouse or common-law partner accumulated during the time you lived together can only take place after a divorce, legal annulment, separation from a legal marriage or common-law union.

You should apply for a credit split and submit the required documentation as soon as possible.

Step 4 Who should complete the application

Either you or your former spouse or common-law partner can request the CPP credit split. A representative (such as a lawyer) may act on a client’s behalf in person, by mail or by phone, but not online. In the case of a separation, the signature of 1 of the spouses or common-law partners is required.

Rights of former spouses or common-law partners

The information you give us (for example, the length of time you lived together) affects the credit split. That information will therefore be provided to your former spouse or common-law partner. Both you and your former spouse or common-law partner have the right to challenge the information and to appeal any decision about a division of credits.

Applying for credit splitting if you have remarried or are living in a new common-law relationship

You can still ask for CPP credits to be split with your former spouse or common-law partner, even if you have remarried or are living in a new common-law relationship.

Step 5 Apply

Apply online

To apply for your benefit online:

sign in to your MSCA and complete the online CPP Credit Split form, and
mail certified true copies of the required documentation or drop them off at a Service Canada office

Apply using a paper application

To apply for your benefit using a paper application:

complete the CPP Credit Split form (ISP1901)
include certified true copies of the required documentation, and
mail the form or drop it off at a Service Canada office

Step 6 After you apply

Once we receive your application and any supporting documents, we will review your application and contact you if we need more information. We will send you and your spouse, former spouse or former common-law partner a decision letter once we have completed our review.

If you disagree with a decision

You may request a reconsideration of any decision that affects your eligibility or the amount of your Canada Pension Plan benefit.