CPP Splitting

[Amber]

First of all, to Grace, I am sooooo happy for you that you are finally finished and that it didn't go to trial after all. Good for you for hanging in there!!!!

A friend has a legal separation since 2002. He Pays a substantial amount of spousal support. He received a phone call from his ex today, who does not live in Ontario now but at the time of separation, did. She is applying to start collecting her cpp this fall. She said she needs him to sign a piece of paper saying she looked after the kids all the time they were growing up. Actually the way I understand it, she mostly did, with the exception of a few odd jobs. Wouldn't CPP know by her pensionable earnings how much she worked and how much she was at home? She said by getting this paper signed it will give a small increase in what she is entitled to in cpp.

Has anyone had any experience or know anything about this. I said I think he should run it by his lawyer before he signs anything. He doesn't even know what the paper is.....it's in the mail to him.

Any thoughts are appreciated.

[Grace]

Thanks for you kind words Amber, yes it is such a relief that this is over for me. I must admit that there were a few times I wanted to throw in the towel but my lawyers convinced me otherwise, and it all worked out in the end.

As for splitting the CPP credits I think this is very standard in most separation agreements, but as always you should run it by your lawyer.

[logicalvelocity]

Amber,

I heard something to the effect of this. And did some searching, I came across this at HRDC


http://www.sdc.gc.ca/asp/gateway.asp...t.shtml&hs=cpr

The CPP child rearing drop-out provision

The Canada Pension Plan (CPP) provides basic benefits to contributors who retire or become disabled; when you die, benefits may be provided to your spouse or common-law partner and dependent children. The amount of the benefit you or your survivor receive is based on how long and how much you have contributed to the Plan and, in some cases, the beneficiary's age.

The CPP takes into consideration that caring for young children can mean leaving the workforce or working fewer hours. If your earnings either stopped or were lower because you were raising your children under the age of seven, you can ask the CPP to exclude that period of time from the calculation of your benefit.

To make sure that these periods of low earnings do not reduce your pension later, the CPP can apply the "child rearing drop-out" provision (CRDO). This means the CPP doesn't count the years when you were raising your children under the age of seven when calculating the amount of your benefit. By doing this, we ensure that you get the highest possible payment.

The following example shows how this works:

Jennifer was employed outside the home until her daughter, Elizabeth, was born in 1983. Jennifer stayed at home with Elizabeth until she started kindergarten in 1989. When Jennifer applied for her pension some years later, the CPP dropped out the period from Elizabeth's birth to 1989 when calculating the amount Jennifer should receive. When her pension application was approved, Jennifer discovered that her monthly payment would be $735 per month. Without the benefit of the CRDO, her retirement pension would have been $650 per month.

Eligibility requirements

The CRDO can be used only for months when:

you or your spouse/common-law partner received Family Allowance payments or were eligible for the Canada Child Tax Benefit (even if you did not receive the benefit), and
your earnings were lower because you either stopped working or worked fewer hours to be the primary caregiver of a child of yours under the age of seven who was born after December 31, 1958.
Either spouse or common-law partner can apply for the CRDO, but it cannot be used by both for the same period of time.

Why should you apply for the CRDO?

Applying for the CRDO may increase your CPP benefit by excluding from the calculation the periods when your income either stopped or was lower.

The CRDO could also help you meet the eligibility requirements for a disability benefit, should you need it. In the event of your death, it could help you meet the contributory requirements to provide benefits to your estate and survivors.

Please note: The CRDO helps keep your benefits as high as possible; you still must meet all of the eligibility requirements to receive any CPP benefit.

When should you apply for the CRDO?

You should apply for the CPP child rearing drop-out at the same time as you apply for any CPP benefit.

What documents do you need to provide?

You will need to provide an original or a certified true copy of your children's birth certificates.

You may also be required to provide proof of the date of entry into Canada for children born outside the country.

Contact us

By telephone (toll-free)*
1 800 277-9914
1 800 255-4786 (TTY)

On the Internet or by email: www.sdc.gc.ca

the bulletin in pdf format can be found here

http://www.sdc.gc.ca/en/isp/pub/fact...chidropout.pdf

LV

[Amber]

LV~ I just came across that site too just a few minutes ago. Thanks for your help.

[Jenny]

There is also the issue of cpp credit splitting - they divide the credits the couple earned during the marriage and split them. This also may help her- it might have already been done by now- if she is ready to retire now.