G1037y HRSDC Eng.pdf, page 1-18 @ Normalize

In case of disputes, the wording and provisions of the

legislation and regulations governing the Canada Pension

Plan prevail.

This guide contains general information about Canada

Pension Plan credit splitting as of March 2008. However,

as the Plan is continually evolving, it remains the

responsibility of the reader to keep current with legislative

changes to ensure the most effective counselling to our

mutual clientele.

Cat. HS4-40/2008

ISBN 978-0-662-05410-8

Available in alternative formats.

March 2008

Online: www.hrsdc.gc.ca

Aussi disponible en français sous le titre Partage des Crédits - Guide

destiné aux membres de la profession juridique.

Table of Contents

About this Guide ..............................................................................................................................1

Chronology of Credit Splitting Legislation ....................................................... 1

Creation of the Canada Pension Plan ................................................................................................1

CPP Credit Splitting Introduced in 1978 ...........................................................................................1

The 1983 Preece Case .............................................................................................................................2

Legislation Amended Effective January 1, 1987 .............................................3

Mandatory Credit Splitting upon Divorce or Legal Annulment .................................................3

Credit Splitting Expanded to Include Separation of Legally Married Spouses ........................3

Credit Splitting Expanded to Include the Separation of Common-Law Partners ...................3

Written Agreements ...............................................................................................................................4

Saskatchewan ................................................................................................................................4

Quebec .............................................................................................................................................5

British Columbia ...........................................................................................................................5

Alberta .............................................................................................................................................5

CPP Amended Effective March 15, 1991 (remedial legislation for those adversely

affected by the Preece decision) ..........................................................................................................5

CPP Credits and their Division: How It Works ..................................................6

Accumulating CPP Pension Credits ...................................................................................................6

Calculating the Period of Cohabitation for Credit Splitting .........................................................6

Reconsideration/Appealing a Credit Splitting Decision ..............................................................7

Withdrawals ............................................................................................................................................7

The “Monetary Value” of a Credit Split ............................................................................................7

Practical Illustrations .............................................................................................................................8

Other Matters ......................................................................................................................................9

Credit Splitting Administration ..........................................................................................................9

Credit Splitting versus Pension Sharing .........................................................................................10

How Lawyers Can Help CPP in Administrating the Credit Splitting Provision ...................10

Important Addresses and Numbers ...........................................................................11

Appendix 1

Unadjusted Pensionable Earnings (“Credits”) ..............................................................................12

Conditions Of Eligibility .....................................................................................................................13

Information And Evidence Required for Credit Splitting ...........................................................14

Canada Pension Plan Program

Credit Splitting - A Guide for the Legal Profession

March 2008

People • Partnerships • Knowledge

About This Guide

The provision in the Canada Pension Plan

(CPP) regarding the Division of Unadjusted

Pensionable Earnings (commonly known

as credit splitting) allows, upon divorce,

legal annulment, separation or the end of

a common-law union, the equal division

of pension credits that a couple built up

during the time they lived together. The

rules governing credit splitting have

changed considerably since they were rst

introduced in 1978. As a lawyer or other legal

practitioner, you and your clients should be

aware of legislative changes regarding the

division of CPP credits. Counselling your

clients about credit splitting is important, as

the division of CPP credits can affect their

current or future entitlement to CPP benets

and their nancial security in retirement.

Human Resources and Social Development

Canada (HRSDC) is the federal department

responsible for the administration of the

CPP. Service Canada (SC) delivers services

and processes benets on behalf of HRSDC.

HRSDC has prepared this guide as a quick,

easy-to-use reference on the subject of

CPP credit splitting, largely in response to

requests from the legal community for more

information. The guide may be useful for

lawyers, other legal practitioners and clients.

In addition to consulting this guide, lawyers

and other legal practitioners should closely

review the CPP legislation and regulations

related to credit splitting to gain a thorough

understanding of implications for clients.

For more information, please contact Service

Canada (see page 11).

Chronology of Credit

Splitting Legislation

Creation of the Canada Pension Plan

The CPP, established in 1966, is a compulsory,

contributory social insurance program that

provides basic earnings replacement in

the event of retirement, disability or death

of a contributor. It is nanced through

contributions from employees, employers and

self-employed people, and from investment

income of the CPP Fund. Almost everyone

who works in Canada contributes to the CPP,

except for those who work in Quebec.

Quebec workers contribute to the Quebec

Pension Plan (QPP), which is similar to

the CPP in terms of coverage and benets.

Under both plans, eligible contributors

receive retirement and disability benets

based on earnings and contributions made

during their contributory period. Benets

can also be paid to the survivors or dependent

children of contributors. However, the QPP

has some important variations with respect

to credit splitting. Legal practitioners with

clients who have made contributions to the

QPP, or to both the CPP and the QPP, should

contact QPP ofcials for more information

(see page 11). Contributions to both plans are

taken into account.

CPP Credit Splitting Introduced in 1978

Credit splitting was introduced into the CPP

on January 1, 1978. The legislation allowed

for the equal division of CPP credits earned

by legally married spouses during the period

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People • Partnerships • Knowledge

of cohabitation during the marriage and upon

divorce or legal annulment of the marriage.

To qualify under the 1978 provisions, former

spouses had to have lived together for at least

36 consecutive months during the marriage

and had to apply for credit splitting within

36 months of the nal divorce decree or

judgment of nullity. Credit splitting was

not mandatory and did not extend to the

separation of married spouses or common-law

partners [Section 55 of the CPP].

Waiver of Time Limit for Application

If former spouses would have qualied for

a credit split if not for the time limit and if

both parties agree, in writing, the Minister

will waive the time limit and a credit split can

be done. A waiver document exists for this

purpose. It is the responsibility of the applicant

former spouse to obtain the signature of

the non-applicant former spouse. The non-

applicant former spouse must be living, since

the waiver cannot be signed by the estate.

The 1983 Preece Case

In 1983, the Pension Appeals Board (PAB)

decided, in the Minister of National Health

and Welfare vs. Preece, that, if spouses had

waived their respective rights to claims on

each other’s property by way of a written

agreement or court-ordered adjudication

on division of property, then they were

precluded from applying for and receiving

a division of pension credits. Those spouses

who, prior to Preece, had been counselled

that marital property waivers did not affect

their right to a division of CPP pension

credits found that they had inadvertently

signed away that right.

Since many written agreements contain, as

a matter of course, a general waiver against

future property claims, the Preece decision

effectively precluded the division of CPP

pension credits in the event of divorce in many

cases, regardless of the actual intention of

the parties.

This situation was addressed by legislation

introduced on June 4, 1986, and by a private

member’s bill proclaimed in force on

March 15, 1991 (see page 5).

Surprising Facts

CPP credits acquired as a result of credit splitting

may be an important source of income in retirement.

In the event of a divorce, separation or common-law

break-up, men and women alike are entitled to

equal shares of CPP pension credits accumulated

during the time they lived with their former spouse

or common-law partner—provided they meet

statutory requirements.

The take-up of CPP credit splitting is very low

relative to the number of divorces and separations.

In 2004, the total number of divorces and

separations in Canada except Quebec (where the

QPP applies) was 60,163. These statistics exclude

the number of former common-law unions. Yet,

in 2004, only about 9,085 individuals applied for a

credit split.

Legislation Amended

Effective January 1, 1987

Effective January 1, 1987, legislative amend-

ments were made to the credit-splitting

provisions. The major changes included

“mandatory” credit splitting in the cases

of divorce or legal annulment occurring on

or after January 1, 1987, and the extension

of credit splitting to separated spouses and

former common-law partners who separated

on or after January 1, 1987 (Subsection 55.1,

55.11). The following is a description of the

amendments.

For a summary of the Conditions of

Eligibility under the 1987 legislative

amendments, see Table 1, p. 13.

Mandatory Credit Splitting upon Divorce

or Legal Annulment

Legislative changes effective January 1,

1987, require the Minister responsible for the

CPP to evenly divide the CPP credits jointly

accumulated during the period of cohabitation

of former spouses where a divorce has been

granted under the Divorce Act or where a

legal annulment has been obtained. This

applies unless the spouses entered into a

written agreement precluding CPP credit

splitting, which otherwise meets statutory

requirements, so as to be binding on the

Minister (see section on written agreements,

p. 6). Because divisions were made mandatory

in case of divorce or legal annulment, no

application is required. However, it is

necessary for an individual requesting a

credit split to provide the Minister with the

required information and documentation (see

Table 2, p. 14). The 36-month time limit within

which to request a division was repealed as

part of the 1987 legislative changes. Therefore,

former spouses who were divorced on or

after January 1, 1987, can no longer be

barred from requesting credit splitting

because of a time limit. The required period

of cohabitation was also reduced from

36 months to 12 months [CPP, subsections

55.1(1)(a) and Subsection 55.1(3)].

Credit Splitting Expanded to Include

Separation of Legally Married Spouses

Since January 1, 1987, credit splitting has

been available to married spouses who

cohabited for at least one year have been

living separate and apart for at least one

year. An application is required, but there

is no time limit within which a spouse must

apply (except upon the death of one of the

spouses, in which case an application must

be made within three years of the date of

death) [CPP, subsections 55.1(1)(b) and

Subsection 55.1(3)].

Credit Splitting Expanded to Include the

Separation of Common-Law Partners

Since January 1, 1987, the legislation also

provides for credit splitting in the event of

the end of a common-law relationship, upon

application by one of the former partners

within four years of the date of separation.

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Credit Splitting - A Guide for the Legal Profession

The partners must have cohabited in a

conjugal relationship for at least one year and

have been separated for at least one year.

In 2000, the Modernization of Benets and

Obligations Act came into force, recognizing

same-sex common-law partners. The Act

extended benets and obligations to all

couples who cohabit in conjugal relationships

for a continuous period of at least one

year. Where a former partner dies less

than a year after the separation, a credit

split can be done if an application is made

within four years of the date of separation.

[CPP, section 2 “common-law partner” and

subsections 55.1(1)(c) and 55.1(3)].

Waiver of Time Limit for Applications

In 2007, Bill C-36: An Act to Amend the Canada

Pension Plan and the Old Age Security Act

amended section 55.1 (1) (c) to provide for a

credit split if the application is made within

four years of separation, or at any time after

that date, so long as both former common-

law partners agree to waive the time limit in

writing. A waiver document exists for this

purpose. That means that the process of credit

splitting between former partners beyond

the four-year deadline would depend on the

cooperation of both parties.

Written Agreements

Based on CPP amendments effective January

1, 1987, statutory requirements had to be met

to waive a division of CPP pension credits by

way of either a written agreement entered

into or a court order made on or after June 4,

1986 (the date the amending legislation was

introduced in the House of Commons). They

are as follows:

• Aprovisioninawrittenagreementmust

expressly refer to the CPP and indicate the

intention of the parties that there be no

division of pension credits.

• Aprovisioninawrittenagreementnot

to divide CPP pension credits must have

been permitted by a provincial statute

(see sections on Saskatchewan, Quebec,

British Columbia and Alberta that follow).

• Theagreementmustnothavebeen

invalidated by a court order.

[Subsections 55.2(2) and (3)].

Written agreements entered into, or court

orders rendered prior to June 4, 1986, are

binding on the Minister for the purposes of

a credit split. Therefore, there could be no

division of CPP pension credits if, prior to

June 4, 1986, a written agreement contains a

general waiver of property rights, or if there

was a court order releasing them from any

present and future claims (see the March 15,

1991, amendments, which follow).

Saskatchewan

The Province of Saskatchewan originally

allowed for a waiver of pension credits

in its Matrimonial Property Act effective

January 1, 1987. Currently, the Family

Property Act provides that “interspousal

contracts” entered into on or after June 4,

1986, may provide that there be no division

of CPP credits.

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People • Partnerships • Knowledge

Quebec

The Civil Code of Quebec (Division III Family

Patrimony) was amended effective July 1,

1989, to allow for a waiver of a division of

CPP credits.

The QPP also contains its own credit splitting

provisions and allows for waivers in certain

circumstances. Questions about the QPP

legislation should be addressed to La Régie

des rentes du Quebec.

If one or both parties have contributed to

the CPP and the QPP during the period of

cohabitation, CPP credits may not be split

for a year of cohabitation unless the QPP

credits are also split. Because of the

complexities involved when a division is to

be made under both the CPP and the QPP,

please contact Service Canada to ensure

that you and your clients understand the

interaction of credit-splitting provisions

under both plans.

British Columbia

An amendment to the B.C. Family Relations

Act allows spouses to waive, in a marriage

or other written agreement, their right to a

division of CPP credits.

The amendments apply to agreements entered

into on or after June 4, 1986 but the legislation

was only proclaimed in force July 1, 1995.

Alberta

A similar amendment was made to the

Alberta Family Law Act under the authority

of the Canada Pension Plan Credits Statutes

Amendment Act, 2004 for written agreements

signed on or after June 4, 1986. However,

the legislation was only proclaimed in force

October 1, 2005.

CPP Amended Effective March 15, 1991

(remedial legislation for those adversely

affected by the Preece decision)

A private member’s bill led to a legislative

amendment to the CPP. It authorizes the

Minister to take remedial action to place

individuals, who were denied a credit split

due to written agreement or court order prior

to June 4, 1986, in the position they would

have been in had the division been approved.

The provision permits individuals who were

adversely affected by the Preece decision to

take advantage of the CPP provisions for

credit splitting.

This amendment does not apply if the

agreement or order contains a provision that

expressly mentions the CPP and indicates that

there be no division of credits under the Act.

Also, for the Minister to exercise discretion

in these cases, all other criteria specied by

the CPP respecting division must be met

[Subsection 66(5)].

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People • Partnerships • Knowledge

CPP Credits and their

Division: How it works

Accumulating CPP Pension Credits

The CPP maintains a Record of Earnings for

each individual who has made contributions

to it. The record lists the individual’s earnings

and contributions for each year during his

or her contributory period (see Appendix 1

for the denition of Unadjusted Pensionable

Earnings). Upon the divorce or separation

of legal spouses or common-law partners,

and the receipt by the Minister of required

applications, information and documentation,

credit splitting can begin. This is done by

adding together all pension credits of both

spouses or common-law partners for each

year they cohabited, and dividing the

credits equally between them.

These credits are not actually paid to

the individual, but are credited to the

individual’s Record of Earnings. This Record

is used to determine the amount of current

or future CPP benets to which contributors,

surviving spouses and/or dependent

children may be entitled. A copy of the

Record of Earnings can be requested by a

contributor. Record of Earnings information

cannot be released to a third party without

the contributor’s prior written consent.

In other words, the beneciaries of a credit

split do not necessarily receive an immediate

benet, but there could be an effect on

current or future pension entitlement. Often,

under a credit split, one of the separated or

former spouses, or common-law partners

is likely to have an increase and the other

separated spouse or partner a decrease in

their current or eventual benet amount.

Credit splitting may even create entitlement

where none existed previously.

Calculating the Period of Cohabitation for

Credit Splitting

The period of cohabitation normally includes

the years the couple lived together in a

conjugal relationship. The period of

cohabitation is calculated in full years. Credits

for the rst year of cohabitation are divided,

even if the actual period of cohabitation is not

the whole year. The last year of cohabitation

is excluded from the period of division.

Certain months or years in a period of

cohabitation are not divided:

• Anyyearinwhichthecombined

unadjusted pensionable earnings of

the separated or former spouses or

common-law partners does not exceed

twice the year’s basic exemption.

• Anyperiodwhenoneoftheseparated

or former spouses or common-law

partners was less than 18 or more than

70 years of age.

• Anymonthduringwhichoneof

the separated or former spouses or

common-law partners was receiving

a retirement pension under the CPP.

• Anymonththatisexcludedfromthe

contributory period due to the disability

of one of the separated or former spouses

or common-law partners.

Canada Pension Plan Program

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People • Partnerships • Knowledge

There are also statutory rules to address

periods of separation of spouses/common-law

partners [Section 55, Subsections 55.1(2)

and (3), and 55.2(8) of the CPP;

Sections 78 and 78.1 of the CPP Regulations].

Reconsideration / Appealing a

Credit-Splitting Decision

Once a credit split is either approved or

denied, both affected parties are notied

in writing, and a 90-day appeal period

starts to run from the date they receive

the notication. There are three levels of

appeal in the CPP:

1. A request to the Minister for

reconsideration [CPP, section 81].

2. An appeal to a Review Tribunal

established under the CPP [Section 82].

3. An application for Leave to Appeal to the

Pension Appeals Board [CPP, section 83].

Either separated or former spouse or

common-law partner can request a

reconsideration or appeal a credit-splitting

decision.

An individual who is dissatised with the

decision of the Pension Appeals Board

may le an application for judicial review in

the Federal Court of Appeal.

Also, if an individual believes that they

have been denied a credit split based

on the erroneous advice or administra-

tive error of the Department, they may

request a departmental investigation

[Subsection 66(4)].

Withdrawals

An applicant may withdraw a credit splitting

application if the withdrawal request is

made within 60 days of when the applicant

was notied of a decision respecting the

application. The non-applicant separated

spouse or former common-law partner or

the estate will be informed of the withdrawal

in writing. This applies only to separated

spouses or former common-law partners.

A request for a division on divorce or

annulment that occurred after January 1,

1987, may not be withdrawn.

Once a credit split has been made, and

any period allowed for withdrawal of

an application has passed, the split is

permanent, unless reversed upon appeal. The

couple may remarry or live together again,

but the division stands.

The “Monetary Value” of a Credit Split

The monetary value of a credit split

is dependent upon several factors,

including the:

• ageofthecredit-splittingapplicant(s);

• lengthoftheperiodofcohabitationwhile

married or in a common-law relationship;

• earningshistoryofbothseparatedor

former spouses or common-law partners

and the amount of CPP credits, where

applicable, earned while they lived together;

• periodsthatcanbedroppedoutofthe

contributory period of former spouse or

common-law partners that are subject to

the split. The CPP has provisions to help

offset periods of low or no earnings during

the contributory period. These include

Canada Pension Plan Program

Credit Splitting - A Guide for the Legal Profession

March 2008

months in receipt of a CPP disability

pension as well as periods of low or zero

earnings while caring for a child under the

age of seven. The CPP also has a “general”

drop-out provision that automatically

excludes 15 percent of the months of lowest

earnings in the contributory period from

the calculation of pension benets; and

• chosenstart date of the CPP

retirement pension.

• TheCPPbenethistoryofacontributor.

Given the complexities involved, the impact

of credit splitting on the amount of any of

the CPP benets of separated or former

spouses and common-law partners varies

considerably from one case to another. For

this reason, it is important that each case be

evaluated in light of all the relevant facts of

that particular case.

Practical Illustrations

The following examples demonstrate the

potential impact of CPP credit splitting in

the event of a divorce, separation or end of

a common-law relationship. It is important

to bear in mind, however, that the impact of

credit splitting and, ultimately, the amount

of an individual’s CPP retirement income

depend on several factors. These include,

but are not limited to, contributions made

(where applicable) prior to and/or following

a marriage or common-law relationship.

Example 1:

Christine and Daniel were married for

20 years. During those years, Christine stayed

home to raise their three children while

Daniel was employed. They divorced last

year. Because she had no earnings, Christine

had not paid into the CPP and would not have

been entitled to any CPP benets. However,

Christine asked us to split the CPP credits

Daniel had earned during their marriage.

At that time, she provided all the required

information and documents.

Christine now has a CPP account with her

own credits. Now she will be entitled to a

CPP retirement pension. If she becomes

disabled, she may also be entitled to a

CPP disability benet, provided she meets

the eligibility criteria. When she dies, her

survivors may be entitled to CPP survivor

benets. If Christine starts working and

contributes to the CPP, her CPP account will

grow, and she will receive a larger benet in

the future.

Year’s Basic Exemption

and Year’s Maximum

Pensionable Earnings

A person contributes to the CPP in

accordance with his or her earnings

from salary or wages received as an

employee or in accordance with his or

her net earnings from self-employment

as dened under the Income Tax Act.

Contributions are made on annual

earnings between a set minimum level

and an annually adjusted maximum

level. The minimum level, known as

the Year’s Basic Exemption (YBE),

is frozen at $3,500. The maximum

level, called the Year’s Maximum

Pensionable Earnings (YMPE), is

adjusted each January, and is

approximately equal to the average

Canadian wage. The YMPE for 2008

is $44,900.

Because of the credit split, Daniel’s credits are

now reduced, but he is still eligible for CPP

benets. If Daniel is already getting a CPP

benet, his benet payments will continue,

but they will be reduced. If he continues to

work after the credit split, he will increase his

own CPP credits.

Example 2:

Hiroko and Benoît lived together for 20 years.

Hiroko worked outside the home and earned

less than Benoît during the time they were

together.

Their common-law relationship ended last

year. At that time, Hiroko applied for a credit

split, providing all of the required documents.

The request was approved and their credits

were split.

When Hiroko applies for a CPP benet,

her benet calculation will be based on her

earnings as well as those she received from

the credit split.

Benoît’s CPP credits were reduced with

the credit split, but he is still eligible for

CPP benets. If Benoît is already getting a

CPP benet, his payments will continue,

but they will be reduced. If he continues

to work after the credit split, he will increase

his own CPP credits.

Note: Where both parties are in receipt of a CPP

benet, a decrease in one person’s benet may

not correspond to an equal increase in the other

party’s benet.

Other Matters

Credit Splitting Administration

If you have any questions with respect

to credit splitting, please contact Service

Canada at 1-800-277-9914. Ofces are located

in most major centres across Canada and can

provide applications and documentation

for your clients about credit splitting.

Applications can be submitted either in

person or by mail to your clients’ nearest

Service Canada centre. Certied true copies

or originals of source documents (e.g. birth

certicates and divorce papers) are required

and subsequently returned. Although an

application is not required in cases of divorce

or legal annulment on or after January 1,

1987, its use is normally suggested to ensure

that the required information is provided.

You and your clients should be aware of

the time involved in processing a credit

split. There is a legal requirement to contact

the non-applicant spouse or partner, to allow

this person to contest the division or the

periods of cohabitation in question. When

it is clear that a division may proceed, both

spouses or partners are notied of the change

to their respective Record of Earnings. An

application or request for a credit split is

approved in the month of receipt, and any

resulting benet increase is effective the

following month. Any benet decrease may

only occur once the Record of Earnings is

actually amended.

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People • Partnerships • Knowledge

Credit Splitting versus Pension Sharing

Clients often confuse credit splitting and

pension sharing (referred to as an assignment

of retirement pension in the CPP legislation).

Pension sharing is a provision where spouses

or common-law partners who are at least

60 years of age and who have applied for

their CPP retirement pension(s) may share

the CPP retirement pension(s) earned during

the years of their continuing marriage or

common-law relationship. Pension sharing

does not increase or decrease the total

amount of retirement benets paid to a

couple but may result in tax savings.

It should be clearly understood that pension

sharing ceases upon the death of a spouse or

partner or if the couple divorces, separates or

ends their common-law union. In comparison,

credit splitting permanently alters the Record

of Earnings, even after the death of a former

spouse or common law partner.

How Lawyers Can Facilitate the

Administration of the Credit-Splitting

Provision

Individuals often hear about credit splitting

from friends and colleagues. They will often

approach you as their solicitor to explain the

ramications of the provision. You can most

help your clients by:

• helpingthemunderstandwhatcredit

splitting involves and how it might affect

their retirement income. Your clients should

understand that credits are not actually

paid to individuals but rather applied to

their Record of Earnings, which, in turn,

determines the amount of current or

future CPP entitlement;

• ensuringthatyourclientsareawareof

the rules related to CPP credit splitting,

including the time limits for applying,

where applicable, and the conditions of

eligibility (see Table 1); and

• referringyourclientstoaServiceCanada

Centre to help ensure that they understand:

- the range of CPP benets and

provisions (including pension sharing)

and how the application of credit

splitting might interact with other

features of the CPP (e.g., general and

child-rearing provisions); and

- their potential entitlement to other

public pension benets, such as

Old Age Security benets.

In cases where your clients express an interest in

waiving their right to CPP credit splitting:

• rememberthatawaiverofCPPcreditsin

a written agreement is only binding on the

Minister if there is provincial legislation

that allows for such a waiver; and

• inprovinceswherelegislationmakesa

written agreement binding on the Minister:

- the waiver provision must expressly

mention the CPP and the parties’

intention that there be no credit

split; and,

- your clients should understand the

future ramications of giving up their

right to divide these credits.

In cases where your clients apply for CPP credit

splitting, ensure that they:

• understandtheprocessandpossible

time limits; and

• providetherequiredinformationand

documentation (see Table 2 on page 14).

Credit Splitting - A Guide for the Legal Profession

March 2008

Important Addresses and Numbers

Canada Pension Plan Program

Credit Splitting - A Guide for the Legal Profession

For more information on credit splitting

Service Canada:

English: 1-800-277-9914

French: 1-800-277-9915

TTY: 1-800-255-4786

servicecanada.gc.ca

For contributors to the Quebec Pension Plan

La Régie des rentes du Québec

PO Box 5200

Quebec, Quebec G1K 7S9

1-800-463-5185

TTY: 1-800-603-3540

www.rrq.gouv.qc.ca

For information on Appeals

Ofce of the Commissioner of

Review Tribunals

Canada Pension Plan/Old Age Security

PO Box 8250, Station “T”

Ottawa, ON K1G 5S5

1-800-363-0076

Fax: 1-866-263-7918

www.ocrt-bctr.gc.ca

E-mail: info@ ocrt-bctr.gc.ca

Pension Appeals Board

PO Box 8567 Station “T”

Ottawa, Ontario K1G 3H9

1-888-640-8001

Fax: 613-995-6834

E-mail: [email protected]

People • Partnerships • Knowledge

Canada Pension Plan Program

Credit Splitting - A Guide for the Legal Profession

Appendix 1

Unadjusted Pensionable Earnings – Section 53,

Canada Pension Plan

Subject to section 54, the unadjusted pensionable earnings of a contributor for a year are an

amount equal to

a) the aggregate of

i) his contributory salary and wages for the year, and

ii) his contributory self-employed earnings for the year in the case of an individual

described in section 10,

b) the aggregate of

i) his earnings on which a contribution has been made for the year under this Act,

calculated as the aggregate of

A) his salary and wages on which a contribution has been made for the year, and

B) the amount of any contribution required to be made by the contributor for the

year in respect of the contributor’s self-employed earnings divided by the

contribution rate of self-employed persons for the year,

ii) his earnings on which a contribution has been made for the year under a provincial

pension plan, calculated as the aggregate of

A) such amount is determined in prescribed manner to be his/her salary and wages

on which a contribution has been made for the year by the contributor under a

provincial pension plan, and

B) the amount of any contribution required to be made by the contributor for the

year under a provincial pension plan in respect of the contributor’s self-employed

earnings divided by the contribution rate for self-employed persons for the year,

iii) his basic exemption for the year, or

c) his maximum pensionable earnings for the year,

whichever is the least, except where the amount calculated as provided in paragraph a) is equal

to or less than the amount of the contributor’s basic exemption for the year, his unadjusted

pensionable earnings for that year shall be deemed to be zero.

March 2008

People • Partnerships • Knowledge

Canada Pension Plan Program

Credit Splitting - A Guide for the Legal Profession

Table 1:

Conditions of Eligibility

Situation Application

Required

Minimum

Period of

Cohabitation

Minimum

Period of

Separation

Time Limit

for

Application

Divorce or annulment

granted prior to

January 1, 1987

Yes

36 consecutive

months

N/A

36 months from

date of divorce or

annulment*

Divorce or annulment

on or after

January 1, 1987

No 1 year None None

Separation of legally

married spouses on or

after January 1, 1987

Yes 1 year 1 year None

Separation of legally

married spouses on or

after January 1, 1987

and spouse deceased

Yes 1 year 1 year

3 years from

date of

spouse’s death

Separation of

common-law partners

on or after

January 1, 1987

Yes 1 year 1 year

4 years

from date of

separation*

Separation of

common-law partners

on or after

January 1, 1987

and former partner

deceased

Yes 1 year

Can be less than

1 year because

of death

4 years

from date of

separation

Separation of same-sex

common-law partners

on or after July 31, 2000

Yes 1 year 1 year

4 years

from date of

separation*

Separation of same-sex

common-law partners

on or after July 31, 2000

and former partner

deceased.

Yes 1 year

Can be less than

1 year because

of death

4 years

from date of

separation

* Former spouses or common-law partners may provide a written statement agreeing to waive the application time limits

(see pages 2 and 4). Note: See page 4 for effect of written agreements and court orders

Canada Pension Plan Program

Credit Splitting - A Guide for the Legal Profession

Table 2:

Information and Evidence Required for Credit Splitting

Information and

Evidence Required

Divorce or Annulment Granted on or

after January 1, 1987

Separation of Legally

Married Spouses

Separation of

Common-Law Partners

Application No* Yes Yes

SIN for both

spouses/common law

partners**

Yes Yes Yes

Proof of age for

applicant spouse

Yes Yes Yes

Age of non-applicant

spouse/common law

partners

Yes, if possible Yes, if possible Yes, if possible

Continuity of name Yes Yes Yes

Last known place of

residence of spouse/

common law partners

Yes, if known Yes, if known Yes, if known

Proof of date when

couple started living

together

Yes, if common-law union

prior to marriage

Yes, if common-law union

prior to marriage

Yes

Proof of marriage

Yes

• Marriage certicate

• Court document with date of marriage

Yes

• Marriage certicate

• Court document with

date of marriage

N/A

Proof of date last

lived together

Yes Yes Yes

Proof of dissolution

of marriage

Yes

Decree absolute / judgment of divorce

or nullity

N/A N/A

Written agreements/

Court Orders

Yes Yes Yes

Proof of death No

Yes, if one spouse

died after separation

• Death certicate

• Funeral director’s

statement of death

Yes, if one partner

died after separation

• Death certicate

• Funeral director’s

statement of death

* A credit splitting application form is suggested to ensure that appropriate information and documentation is included.

** If one of the spouses or common law partners does not have a social insurance number, one can be obtained from a Service Canada

ofce or from embassies or consulates abroad.

Note: Where necessary, the applicant may be asked to supply additional information or evidence to meet CPP documentation or

cohabitation requirements.

March 2008

NOTES