Family law: Sharing may not always be wise during a divorce

Family law: Sharing may not always be wise during a divorce

On Behalf of Porter Ramsay LLP | Jul, 03, 2018 | Family Law

Sharing in divorce doesn’t always end up well. A British Columbia man who  agreed to split his Canada Pension Plan credits 50-50 with the wife he was divorcing after 30 years of marriag has realized this. Marriage and divorce laws are provincially mandated and even though credit splitting with former spouses in British Columbia is not mandatory as it is is most provinces, this couple decided to share their accumulated CPP credits anyway.

In this case, the man worked for more years and contributed more money to the plan than did his former wife. What he didn’t know, however, is that he wouldn’t recoup that money after his former spouse died. She passed away before he claimed his CPP at the age of 60. Even though he knew he would be getting less money than if he would have waited until he turned 65, the man was shocked to see he would only be getting $338.50 every month after taxes, when he had paid into the plan for more than 40 years. 

In essence, the government is keeping the portion he would have given his now deceased former spouse. And apparently, he has no recourse. The stated reason is that when he relinquished that part of his CPP amount to his former wife, he lost it forever since it operates under a pooled risk principle. One similar case was appealed to the Social Security Tribunal of Canada, but was rejected with the explanation that there is no provision in the CPP to cancel or overturn credit-splitting credits in situations when a former spouse dies. 

Consulting with a family law lawyer in British Columbia may have helped this man to make the decision to share his CPP credits with his former wife. A lawyer knows the law and may be able to provide wise suggestions when it comes to these types of issues. Getting all the facts beforehand may save money and stress in the long run.  

Share this article