Need advice on CPP splitting for a cohabitating couple

[Sylvia13]

Hi, I am new to this site and was hoping that someone might have an answer to a question that I have.

I live in Ontario, Canada and have been cohabitating for the past 2.5 years and my partner is legally separated and collecting disability allowance from a private insurance company. The allowence will end in 2 years when he turns 65 at which point he will apply for CPP, OAS and hopefully Guaranteed Income Supplement. As for myself, I have been widowed 4 years and lost my job a year ago after 40 years of service so I decided to take early retirement and am receiving a pension at a reduced rate.

Although I have been warned by my friends and know better, I do not have a cohabitation agreement with my partner, as he was strongly opposed to it. I am aware that I will be financially responsible for him after 3 years of cohabitation so am trying to gather as much info as possible so I am prepared for the future.

My question is, once my partner turns 65 and starts collecting CPP, OAS and hopefully GIS, will I have to split or share my CPP credits with him? There is a possibility that his ex-wife might try applying for half of his CPP when she turns 65 as she has never contributed. Also, our combined pensions might be over the maximum and he might not be entitled to GIS and I would hate to cash in some of my RRSPs to make ends meet.

I am planning to start collecting my CPP in a year at age 60 and am currently receiving a pension from work, CPP survivor benefit and a small allowence from my partner which comes to $1,600 a month. I figure in a year when I start collecting CPP that amount will increase to $1,900 to $2,000 a month.

I own the house we live in and have some RRSPs so am better off financially then my partner, although he has been able to save a few dollars whilst living with me for the past 2.5 years. I owned the house before we stated cohabitating so the house is completely mine. Also, he has adult children and I do not have any children.

Thank you for reading my post and have a good day.....Sylvia.

[dadtotheend]

At $2,000/mth you will not qualify for the GIS on your own, let alone adding in your partner's income. The threshold for getting GIS is very low and with a private pension you will almost certainly not qualify. Add in your partner's income and for sure the two of you won't get it. Typically the only Canadians that receive the GIS are on a government pension, with no private pension income, be it RRSP's, RRIF's or company pensions.

As far as your house, increases in value of the house during your cohabitation would be subject to equalization of family property should you split, although he would have no claim on the equity you brought to the table.

Both of your incomes appear relatively low, so although spousal support (SS) could be an issue if you split, it would probably not be a huge amount. That said, a small amout of SS could have a relatively large impact on your relatively small income.

If your partner is "strongly opposed" to a cohab agreement (why I ask?), then you might consider suggesting that you require some payment of rent from him while you are together in order to have him contribute to your partnership. It sounds a little like he's getting his cake and eating it too. He is, after all, managing to save some money even though you are better off than him. Get him to pony up.

[dinkyface]

I am aware that I will be financially responsible for him after 3 years of cohabitation so am trying to gather as much info as possible so I am prepared for the future.

Where did you read that???

Also, please check the link at the top of this forum for more info on how assets and marital home are split for common-law partnerships. If the house title lists only you, then it is YOUR house. All other asset/debt splitting is based on who started with what at the beginning, and who contributed what during the union.

It looks like your partner's antipathy towards a cohab agreement was misinformed, since it usually works to protect the one with LESS assets.

[Sylvia13]

Thank you for such a quick reply Dadtotheend, appreciate it. Sorry, I did not make myself clear, what I was asking is, would my partner qualify for GIS? He would only be getting CPP and OAS at age 65 and there is a possibility that his CPP might be reduced because his ex-wife will be entitled to half. He does not have any RRSP's, RRIF's or company pension.

You are absolutely correct about him getting his cake and eating it too LOL! I guess I am too good hearted and only see the good in people. Aside from him being a real cheapskate when it comes to parting with his money, he is a good person deap down. Right now he is giving me $300 a month towards food and utility bills, but that amount most likely will be lowered when he turns 65.

I know, I know, he thought that he had won the lottery when he met me.

Regards......Sylvia.

[Sylvia13]

Dinkyface, I went to see a lawyer about writing up a will and mentioned to him about cohabitating. The lawyer has an office in the building that my deceased husband managed and knew my husband of 37 years quite well. He was the one that told me that I would be financially responsible after 3 years of cohabitation. I guess he was not very happy with me when he found out that there was no cohabitation agreement and was most likely trying to scare me. Unfortunately I never went back to the lawyer and did not clarify what he meant by “financially responsible”.

As suggested, I will read up on how assets and marital home are split for common-law partnerships. The house title lists only me and I have been in the home for 30 years.

Yes, I agree, it would be to his benefit to do a cohab agreement. You can bring a horse to water, but you can’t make him drink.

Thank you so much for taking the time to answer, I appreciate it. I will also take the time to read up more on the links provided.

Good Night……Sylvia.

[dinkyface]

Maybe your lawyer was referring to spousal support i.e. once your relationship is more than 3 years old, he would be more likely to qualify for spousal support. I don't think 3 years is a fixed/hard rule though.