As we wrote in a previous article, many divorcing partners may not be aware of their right to split the cumulated CPP credits that each of them contributed during the marriage. Once they become aware of this option, the next question is usually whether it can, should, or must be done in their particular circumstances.
The short answer is that a CPP credit split is mandatory once one of the spouses requests it, by way of application to Service Canada.
Specifically, the provisions of the Canada Pension Plan make it mandatory to divide CPP credits in cases where three specific steps have been taken:
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1) There has been a judgment granting divorce; and
2) The Minister of Employment and Social Development has been informed of the judgment; and
3) The Minister has received the prescribed information.
This means that once an application has been filed together with all the necessary information (including a copy of the marriage certificate, divorce judgments, and other information), Service Canada must process the application, and the Minister is obliged to make the CPP credit division. The process cannot be rescinded or “undone”.
With that said, there is nothing “forcing” either of the spouses to make an application. In fact, separated spouses that are on the verge of divorce and are considering the various financial aspects of their split should evaluate whether it makes sense to apply for CPP credit splitting, as a means of achieving overall fairness between them. This is because the Canada Pension Plan allows soon-to-be-divorced spouses to agree not to divide their CPP credits as part of a divorce settlement, provided certain conditions are met. However, this must be done before a divorce judgment is granted, and is approved by the court. If no such agreement has been reached, and if an application to divide CPP has already been submitted, then the Minister must divide CPP credits as otherwise indicated in the legislation.
Finally, in some provinces (namely Alberta, British Columbia, Quebec and Saskatchewan), one spouse can effectively “stop” the other spouse from applying for CPP credit splitting, by getting them to agree to it in a written contract. However, Ontario does not allow for such agreements, so divorcing spouses who live in this province cannot legally opt out of their right to apply.
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