The article “Can You Receive CPP Benefits From Two Partners?” was originally published in MoneySense on July 24, 2018.
Twice the split CPP? It’s possible, to an extent.
Q: Can I get CPP from a common law partner if he dies, even though I receive CPP from a divorced partner?
—E.R.
A: Canada Pension Plan (CPP) contributions made during a marriage or common-law relationship can be equally divided after divorce or separation. Sometimes, this is voluntary. Sometimes, it is part of resulting legal agreement. It is called “CPP credit splitting.”
It sounds like you received additional CPP credit, E.R., upon your divorce. Your ex-spouse must have contributed more to CPP during your period of cohabitation than you. Your CPP pension will be higher due to the credit splitting as some of their CPP contributions were credited to you.
The fact that your CPP retirement pension will be or already is enhanced due to credit splitting from a previous divorce does not prevent you from receiving a CPP survivor benefit from a new partner. Nor does it prevent you from receiving additional CPP credit splitting from a subsequent divorce or separation from another partner, E.R., since credit splitting is based on the years you lived with that partner and one or both of you contributed to CPP.
There are three types of survivor benefits when a CPP contributor dies:
1. A death benefit payable as a lump-sum to the estate of the deceased.
2. A survivor’s pension payable as a monthly benefit to the deceased’s surviving spouse or common-law partner.
3. A children’s benefit payable as a monthly benefit to the deceased’s surviving dependent children.
The lump-sum death benefit has nothing to do with your own CPP pension, E.R., nor any CPP credit splitting from a previous divorce.
The survivor’s pension could be impacted by your CPP credit splitting from your divorce, although only indirectly. If your common-law partner dies and you are not yet receiving a CPP retirement pension, there is no immediate impact. There are formulas to determine your survivor pension based on your age and your common-law partner’s historical CPP contributions.
If you are already receiving a CPP retirement pension or once you begin to receive it, your combined survivor’s pension and retirement pension cannot exceed the maximum CPP retirement pension entitlement – currently $1,134.47 per month.
On that basis, your CPP credit splitting from your divorce, which would increase your CPP retirement pension, could indirectly limit your survivor’s pension if your combined retirement pension and survivor’s pension exceeded the CPP maximum, E.R.
These calculations can get a bit complicated, but the main message here is that surviving common law partners are entitled to benefits, just like spouses. They are also entitled to pension splitting in the event of a relationship breakdown.
Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever.
