Somehow I Am Still Paying My Ex-Wife

All social programs share one inherent flaw; they all make the assumption that what happened in the past is what will happen in the future. Canada Pension Plan is no different in this regard, especially in one respect. When you get divorced in Canada, your CPP is "equalized" for the time of the marriage. This means CPP contributions from the higher earning spouse are transferred to the lower earning spouse in order to ensure they have equal pensions at time of retirement, theoretically at age 65,

My situation, as with most other things in my life these days, does not fit any sort of typical model. My wife filed for divorce while I was working. Somehow she realized that filing while I was making money would ensure her a substantially higher expectation in terms of spousal support and assets from the divorce court. Even when I was no longer able to work, the judge essentially said "Too bad, so sad. Pay her." When we finally settled, I did not do well. It's just the way the system works. On the other hand I suspect she feels she did not do well either, so there you go.

The real wrinkle is in the CPP benefit. I am on CPP Disability. This is technically a CPP benefit. Under Canadian law, this means my ex-wife is entitled to an equalization payment from my disability pension, even though she is not yet retired. However the payment is not automatic. In fact she has to apply for that equalization payment. She has to know it is there and ask for it.

While this seems fair on the face of it, it hides a blatant unfairness. My ex-wife continues to work. Not only that she earns income from her side business, along with rental income from renting out the basement of her home. She does not plan on retiring until at least age 65. So now she is the higher income spouse, even though I was in that position during the marriage.

So my ex-wife, knowing full well that I am living on my disability pension, knowing full well that I am unable to work and earn money, knowing full well that I am dire financial straits, goes ahead and makes application for a credit slip against my disability pension.

CPP is required by law to pay her out of my pension. Therefore my $1,202 monthly pension now becomes $1,045. My income goes down by 15%. In the mean time she has her own income, something in the range of $30,000 a year, along with her supplemental income from her home based business, plus the rental income from the basement suite. Oh, and she gets that massive $160 from my disability pension.

The greater irony is that I will never collect in return. It is extremely unlikely that I will live as long as her chosen retirement date. In fact I likely won't see anything near 65. So she will collect from me while I am living, and she will collect from me after I am dead. Her actions are quite legal. They are also greedy and immoral.