Cpp

[standing on the sidelines]

i have filled in the forms for the change of marital status for Revenue Canada. I was wondering if I need to fill out a separate for for CPP splitting and is there a time limit? Neither he or I are retiring anytime soon.

We were married in 1998 but lived together since 1997, legally separated and one year separation is December of this year.
Thanks

[torontonian]

No time limit. Forms for CPP splitting are on their website. See Canada Pension Plan (CPP) - Credit Splitting Upon Divorce or Separation

[BeenThereTwice]

I don't know if you took time off work to raise kids, but I also saw that you can increase your CPP by claiminbg those "childcare years". I don't know how you do it, but since you are looking at this now you may wish to do that as well.

I am not sure what paperwork CPP will require, but you may wish to wait until you have final divorce papers. No penalty to you to wait.

[standing on the sidelines]

I don't know if you took time off work to raise kids, but I also saw that you can increase your CPP by claiminbg those "childcare years". I don't know how you do it, but since you are looking at this now you may wish to do that as well.

I am not sure what paperwork CPP will require, but you may wish to wait until you have final divorce papers. No penalty to you to wait.

no kids and each of us worked full time, he made about twice what i made so every little bit will help me in retirement. I know he can make a counter claim against mine to lower what is being split from his but he still made double what I made so I will still be ahead.

[BeenThereTwice]

As far as CPP is concerned, it will not matter that he made "twice what you make".

What WILL matter is what your CPP "pensionable earnings" were for each year. For example, in 2006 the MAXIMUM pensionable earnings was $42,100. If you already had pensionable earnings for that year of more than $42,100 then you won't get any CPP benefit from his even hiugher income (for that year).

However, if year by year your OWN earnings did not reach the CPP maximum pensionable earnings then you WOULD benefit, as your earnings and his earnings would be "equalized" on a year by year basis. (e.g. if yours was $20,000 and his was $30,000 for 2006, then CPP would change both to $25000 for that year.. and so on.. for each year of marriage.) Don't know about pre-marital period, or post-separation period.

I'd still wait till divorce papers are final.

[standing on the sidelines]

I never reached the maximum and for most years he did.

[ddol1]

As a help to others, I will put this out here for those who find themselves not having a regular life when it comes to income, paying into CPP and not being allowed to contribute for many years for reasons beyond my control. Because I was either on long term WCB with a series of surgeries and then professional retraining as I was no longer insurable under WCB doing anything remotely close to what I used to do before my accident and then all the years I have been on CPP disability - you can't contribute to your retirement pension while you are on disability so you find yourself in my position...... no where near enough credits and as a result a drastically reduced pension when I turn 65. (this is why the government started the RDSP plan for those who can scrape the $1500 a year together - but I only got three years in before I hit 59 - the last year to contribute.

I have already checked, found out the rules and the one thing that is not mentioned is it only takes one spouse to apply and you provide the seperation/divorce papers and they split your differences if any. Point not made is it is possible for a couple to negotiate if CPP splitting is done or not in their seperation agreement. If CPP is supplied the completed seperation agreement they will abide by your decision.

Next is the backout clause! You can apply at anytime with no penalty after you have proof of seperation and you are allowed to back out of your application up to the point of a case worker entering into the Federal system the results of the splitting. Once entered it can't be undone - but they will not tell you the result before hand either. So I think this back out clause is mute as you applied so there should not be a reason to "back out the last minute". So they wouldn't tell you before hand, and my disability amount hinges on this right now. If you both work then there is no penalty to apply right up to the day you turn 65 but if one, like myself, is currently on the disability program of CPP the monthly amount will change accordingly the day the application is processed.

For me that was a serious emergency! The minority of our marriage I was the money earner and the majority of the time I did pay the max. I had already figured that I brought in 70%+ of the income during our marriage nonetheless and a serious cut in my disability amount would be another financial killer. So I asked and the (person who answers the phone when we call) took the time to explain exactly how it was determined. Already mentioned there is the child bearing years that does not necessarily go all to one spouse but usually does end up going to the spouse who recieved the CTB in those years, but I also worked in the USA, I have been on CPP for 8 years - then another 8 while I was on WCB following the accident that has me here today. These issues complicate calculations but she put me on hold several times to verify that what she was saying was correct. I have all our tax returns back to the 70's and I know what each of us contributed so I was able to do a detailed calculation of our situation.

I feared the worst but in the end I earned either alot of money when I could work or I made no insurable income - I was at no contributions for 2/3 of our marriage and I still managed to earn more income by alot...... and she worked almost every year at least part time for many but because of the maximum insurable earnings she finally passed me credit wise only a few years ago. So I was planning on getting her to wave CPP splitting but now I know I will see a net increase in my disability amount. Next I found out that because of my so many years with zero insurable I will only get a portion of my retirement pension. This is another issue altogether.

[shellshocked22]

RE CPP split, see the above link including "drop out" periods...

Re the above pollsters post, in reading the CPP website ONLY certain provinces allow the couple to negotiate whether or not to split CPP credits. ONTARIO is NOT one of them. My take on this is that even if you agree in your agreement to NOT split CPP credits in Ontario, later on it only takes one to apply and CPP will do it regardless of what your agreement says.

In other words, you can't really negotiate OUT of it in ONtario. I suppose you could both agree to simply not tell them BUT I wouldn't "give away" too much (if anything )for this simply because it can't be enforced.

Why would the government want to honour a legal agreement checked by lawyers between two consenting adults ??? I'm sure next they'll be dictating what type of underwear divorced people have to wear ! These guys put the Nazis to shame !!

[ddol1]

thank you shell shocked22!
I admit I depended on what the person told me with CPP, she was aware of which province I was in. I remember her having to take a "break" so often to confirm the info she was giving me - I did in a way make her work hard on this call because of the many twists our files have. But to be fair - Since I was told this I added it in. I have taken the stance though of looking everything up myself and printing the rules out when I can to add to my file...... every single dot is going to get grilled over by the stbx so I have taken a ton of time to be right and she will have a hard time to argue if the printouts are in her hands. This is one reason why this has taken me forever to get done.

This can be a reminder for everyone (it certainly is for me - so thank you again!), that in the end, we all have to depend on verifing info that pertain to us ourselves if we need to be perfect. That said I have been directed to so much info in the last few months by many individuals.... things I had no clue on to even think of looking. For me. I look at things as every piece that helps the bottom line is worth my effort to look into.

[shellshocked22]

You are most welcome my friend. I hear what you are saying ! This stuff is so complicated and at the end of the day its up to YOU to make sure things are correct. I can't tell you how many errors supposed "experts" have told me. Lawyers actually seem to make the most mistakes.

The good thing is that courtesy of the internet many things are confirmed on "official" websites. Actually, even the govt websites aren't bad so you can print "confirmation" for your files.