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Government Benefits
While Old Age Security is an individual government benefit, you and your ex-spouse may be able to share Canada Pension Plan (CPP) benefits when you retire. For example, if only one spouse is eligible to receive CPP benefits then the other spouse will be able to make a claim against those benefits.
If one or both of you are currently contributing to CPP, each spouse has the right to apply for division of the CPP credits earned during the relationship (this applies to marriages, common-law and same-sex relationships). Essentially, credit splitting evens out the credits earned by spouses while they were together.
If the relationship was a marriage under federal law, there is no time limit to apply for the splitting of credits. There are time limitations in regards to common-law and same-sex couples (four years after the date of the separation).
There are some provincial variations, but generally one of the parties cannot voluntarily sign away their rights to CPP credit splitting.
If your relationship breakdown results in divorce you do not have to apply for credit splitting. You simply need to provide information to the government such as proof of divorce and the length of time that you lived together. In cases of common-law or same-sex marriages a formal application will be required.
An application will be mailed upon request or it can be downloaded at:
Canada Pension Plan Credit Split on Divorce
Your financial advisor can help you through this process.
Important Information
Information contained herein is provided for information purposes only and should not be relied upon exclusively as estate, tax planning or investment advice, nor should it be construed as being specific to an individual’s investment objectives, financial situation or particular needs. You should always obtain professional advice before acting on the basis of material contained herein. While Dynamic Funds® will endeavour to update this information from time to time as needed, information can change without notice and Dynamic Funds® does not guarantee the accuracy or completeness of this information, including information provided by third parties, at any particular time, nor does it accept any responsibility for any loss or damage that results from any information contained herein.
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