You could face economic hardships if you are divorced and living alone in old age. This situation has become quite common in Canada as divorce rates have gone up significantly. Thankfully, the government of Canada allows divorced individuals to receive social security benefits of their ex-spouses as well. The Government of Canada has OAS and CPP as two old age security programs to provide benefits to the people in their old age.
CPP is a Contributory Pension Plan that allows for division of contributions that you and your spouse made when you lived together. This provision is called credit splitting. You are eligible to receive benefits even if you did not contribute towards this pension plan when you were married.
What is credit splitting under CPP
Credit splitting is a feature in CPP that was introduced in 1978. This provision allows for splitting of the credits between spouses in the case of a divorce. To be eligible for receiving benefits under this provision, you must have lived with your spouse for at least 3 years before the divorce. Benefits received through credit splitting can be an important source of income for you in your old age if you do not have any other source of income.
It is possible for either spouse to request for credit splitting under CPP. You can also request for credit splitting with the help of a lawyer. Credit splitting is dependent upon the information provided by you. This information is shared with your former spouse. He or she has the right to challenge credit splitting. An important point to note about credit splitting is that you may be eligible for splitting even if you have remarried since then.
Credit splitting under CPP is applicable throughout the country except the province of Quebec, where a similar feature is available to old divorcees under the Quebec Pension Plan.
There are other pension schemes run by the government of Canada
In addition to benefits under CPP credit splitting, you can also receive benefits under other pension schemes such as OAS and GIS. To receive benefits under the Old Age Security program, you need to be over the age of 65. As this program is financed by the government of Canada, you are eligible for benefits even if you have never been employed. You must be a Canadian citizen or must have legal resident status to receive benefits under OAS. You can also receive benefits under the Guaranteed Income Supplement (GIS) if you are a recipient under OAS.