Credits to the Canada Pension Plan are earned by anyone over the age of 18 who works and earns more than $3,500.00 per year. Credits are matched by your employer. Your CPP credits provide you with retirement income, and potentially disability benefits and death benefits.
CPP credits are considered sharable family property under Provincial legislation. Upon a written application, CPP credits are equalized between two spouses who are separated. The application can be made upon the granting of a divorce, or upon the spouses living separate and apart for one year. There is no practical time limit on the equalization of CPP credits, so you can apply at any time after your divorce, but ensure that you apply prior to three years after the death of your spouse.
You can agree to not equalize CPP credits as part of your separation agreement. However, the spouse who would benefit from the CPP credit equalization should be cautious about waiving this entitlement; income from CPP upon retirement can be a significant source of retirement income. Waiving the equalization of CPP credits may cost you hundreds of dollars per month in CPP retirement income, which you may need in your retirement.
You can find the application form for the equalization of CPP credits here:
http://www.servicecanada.gc.ca/cgi-bin/search/eforms/index.cgi?app=prfl&frm=isp1901&ln=eng
The Canada Pension Plan webpage discussing the equalization of CPP credits is here:
http://www.esdc.gc.ca/en/cpp/credit_splitting.page
I can assist you with CPP credit equalization. Contact me by phone or email.
