Learn how to apply for CPP credit splitting and increase your retirement income. Check eligibility criteria and explore the benefits of CPP credit splitting
If you’re looking for a way to maximize your Canadian Pension Plan (CPP) benefits, credit splitting may be the solution you need. CPP credit splitting is a program that allows you to share your CPP credits with your spouse or common-law partner to ensure that you both receive equal benefits.
In this article, we’ll explain the eligibility criteria for CPP credit splitting and the benefits you can receive by participating in this program.
Eligibility criteria for CPP credit splitting
To be eligible for CPP credit splitting, you must meet the following requirements:
- You must have been in a common-law or conjugal relationship for at least 12 months, or be legally married to your spouse.
- You and your spouse must be 65 years or older.
- You and your spouse must have made at least one contribution to the CPP while you were together.
- You must not have applied for CPP retirement benefits.
- You must have lived in Canada while you and your spouse were together, or if you lived outside of Canada, you or your spouse must have contributed to a similar pension plan in the country you were living in.
Benefits of CPP Credit Splitting
By participating in the CPP credit splitting programme, you and your spouse can receive several benefits:
- Equal benefits: CPP credit splitting allows you and your spouse to divide your CPP credits equally, which ensures that both of you receive the same benefits.
- Increased benefits: If one spouse has a higher CPP credit than the other, credit splitting can help equalize the benefits and increase the total amount you receive.
- Tax benefits: CPP credit splitting can help you and your spouse lower your taxes. By dividing your CPP credits, you and your spouse can reduce your taxable income, which can lead to a lower tax bill.
How to Apply for CPP Credit Splitting
To apply for CPP credit splitting, you and your spouse must complete and submit the CPP Credit Splitting Form (ISP1901) to Service Canada. You can download the form from the Service Canada website or request a copy by calling 1-800-277-9914.
When you fill out the form, you’ll need to provide information about yourself, your spouse and your relationship, including your social insurance numbers and dates of birth. You’ll also need to indicate how you’d like to divide your CPP credits.
It’s important to note that credit splitting can only be done once and must be done before either you or your spouse applies for a CPP retirement benefit. If you’ve already applied for a CPP retirement benefit, you’re no longer eligible for credit splitting.
CPP credit splitting can be an effective way to ensure that you and your spouse receive equal CPP benefits and potentially increase your total benefits. To take advantage of this program, you must meet the eligibility criteria and you and your spouse must complete and submit the CPP credit splitting form to Service Canada.
If you have any questions or need assistance with your application, you can contact Service Canada for more information.