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The division of pension credits when a marriage ends

In Alberta and across Canada, Canada Pension Plan benefits are split equally when a couple's marriage ends. If both parties worked during the marriage, the partner with more credits will transfer some of the credits to other person so that they both end up having the same amount of credits should they divorce. This pertains to all credits accumulated during a marriage. If one person, whether male or female, stayed home with children for any period of time, their lack of employment is considered, and the CPP benefits are adjusted accordingly.

In order to divide the CPP benefits, the applicant needs to mail in documentation, such as a separation agreement or divorce decrees, to Service Canada. The complicated rules mean that the process can take as long as five months to complete. Eligible candidates need to follow other guidelines when they split CPP benefits.

First, a prenuptial agreement that addresses credit splits still might not stop one under the law. Each province has specific legislation that addresses the handling of the division of CPP benefits, so it may be wise to contact a lawyer for information on the process. Second, the splits aren't allowed for those younger than 18 or older than 70. They may not receive benefits if either partner was receiving CPP Disability Benefit at the time.

Third, the potential applicant needs to fill out a form that asks for an overview of the person's information. A lawyer can help with the paperwork, which is often started after the couple files a separation agreement. Fourth, in some cases, one of both people might have contributed to CPP and the Quebec Pension Plan. Those cases can be more complicated and difficult to resolve.

The division of CPP benefits when a marriage ends means that applicants need to fill out paperwork. A family lawyer might be able to help couples with the documentation.

Source: Financial Post, "Five things you need to know about splitting your pension credits after divorce", Andrew Allentuck, November 01, 2013

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