The Canada Pension Plan provide those persons who have made contributions to the plan with disability, retirement and death benefits provide that they meet the required criteria.
There is a little known provision within the Canada Pension Plan benefit which may increase the amount that you may be entitled to receive.
The Child Rearing Drop Out Provision excludes the years that were spent raising your children (natural or legally adopted) from the calculation of your Canada Pension Plan benefits provided that the children were born after December 31, 1958. This exclusion applies to all of the years that were spent either not working or working reduced hours until your youngest child reached the age of seven (7).
For example, Pati has two (2) children, Joshua and Brandon. Pati was off work until her youngest child, Brandon, reached age seven (7) for a total of 10 years of being out of the work force. Pati then returned to work and continued to work until being eligible for retirement benefits. Upon making that application, Pati should have the Child Rearing Drop Out Provision applied to the calculation of those benefits: the 10 years that she was off work raising her children will be excluded from the calculation and the end result being an increase in her benefits. Either parent can apply for the Child Rearing Drop Out Provision although not for the same time period. Any person who had no income or reduced income, received a family allowance, or was eligible for a child tax benefit should apply for the application of this Child Rearing Drop Out Provision when applying for their CPP benefits.
The forms to apply for the application of the Child Rearing Drop Out provision do not usually accompany the benefits application form.
The Canada Pension Plan Credit Split is another provision that is not widely used. It arises upon separation or divorce. If you and your spouse (common law or through marriage) separate either of you can apply for a CPP Credit Split.
Basically, if spouses have lived together for at least 12 consecutive months and you have been separated for 12 consecutive months, either spouse can apply for a division of CPP credits. There is no time limit on the application, except if the former spouse dies, then the application must be completed within 36 months.
Interestingly, any separation agreement which provides that neither spouse can apply for such a credit split is unenforceable.
If you are making an application for CPP benefits and one of the provision applies to you, you can request the forms from Human Resources Development Canada which can be reached at 1-800-277-9914 or www.hrdc-drhc.gc.ca/isp.
Walter Drescher is a partner at the law firm of Cobb & Jones. If you have any questions, send them to the Simcoe Reformer, or consult a lawyer of your choice.