Divorce: Credit Splitting of Pension
Press Release (ePRNews.com) - Toronto ON - Nov 09, 2017 - This article will discuss credit splitting based on contributions made to Canada Pension Plan.
One of the main issues associated with the divorce is that of dividing property and debt. This includes finances of the parties to divorce. When a marriage breaks down, family property must be split between the separating partners, besides splitting the marital home, joint bank accounts, family property also includes insurance which are both government and private. This article will discuss credit splitting based on contributions made to Canada Pension Plan.
Even in cases where you are undergoing a simple divorce in Ontario, there is need to address the division of family property, especially when you and or your former spouse made pension contributions for your future retirement. “The Canada Pension Plan contributions that were made by you and or your spouse during your marriage can be equally divided after a divorce or separation”; this division is called ‘credit splitting’.
In order for one to be eligible for Canada Pension Plan credit splitting, eligibility varies depending on when the couple was divorced or separated and whether they were married or living in a common-law relationship. It must be noted that a credit split is not permitted under the following circumstances:
When the total pensionable earnings of the spouses or, former spouses in a year was not more than twice the year’s basic exemption
For the period prior to one of the spouses or former spouses reaching age 18 or after a spouse or former spouse reached the age 70
For the period when one of the spouses or former spouse was a beneficiary of a retirement program under the Canada Pension Plan or Quebec Pension Plan
For the period when one of the spouses or former spouses was considered to be disabled for the purpose of the Canada Pension Plan or Quebec Pension Plan disability benefits
It must be noted that if a couple’s marriage ended on or after January 1, 1987 they may qualify for a credit split if:
The spouse lived with their former spouse for at least twelve consecutive months and
If one spouse notifies Service Canada and provide the necessary information
In order to request a credit split one would need to complete the CPP credit split form (ISP1901). Be sure to enclose certified true copies of the required documentation giving information in respect of the division of pension credits. This documentation must be mailed to the Canada Pension Plan. It must be noted that either one of the former spouses can request the credit split or a representative, such as a lawyer, can also make the request in one of the spouse’s behalf. Where the spouses are separated, a signature of one of the spouses is required.
An important note is that “the information provided by the spouse requesting the credit split will be verified by his or her former spouse. Further, both former spouses have the right to challenge the information and appeal any decision about a division of credits”. In addition, even if one spouse has remarried he or she can still request for credit splitting with his or her former spouse.
About the company:
The DivorceGo is a law office of renowned professionals who specialise in divorce and family law matters. Another aspect of their work is advice on separation and divorce agreements in respect of family property divisions. For more information in respect of property division find family lawyer in Toronto or a lawyer handling divorce in Ontario.Source : DivorceGo