Eligible pension income

What is Eligible pension income?

Eligible pension income is generally the total of the following amounts received by the pensioner in the year (these amounts also qualify for the pension income amount):

• the taxable part of life annuity payments from a superannuation or pension fund or plan; and
• if they are received as a result of the death of a spouse or common-law partner, or if the pensioner is 65 years of age or older at the end of the year:
  • annuity and registered retirement income fund (including life income fund) payments; and
  • Registered Retirement Savings Plan (RRSP) annuity payments.

Pension income that is not eligible

The following amounts received by the pensioner are not eligible for pension income splitting:

• Old Age Security payments;
• Canada Pension Plan, Quebec Pension Plan; and
• Amounts received under a retirement compensation arrangement.

Note
Variable pension benefits paid from a money purchase provision of a Registered Pension Plan are not considered life annuity payments and do not qualify unless the pensioner is age 65 or older at the end of the year or the variable benefits are received as a result of the death of a spouse or common-law partner.

Do you qualify to split your pension income?

You (the pensioner) and your spouse or common-law partner (the pension transferee) can elect to split your eligible pension income received in the year if you meet all the following conditions:

• you are married or in a common-law partnership with each other in the year and were not, because of a breakdown in your marriage or common-law partnership, living separate and apart from each other at the end of the tax year and for a period of 90 days or more commencing in the year (see the note below); and
• you were both resident in Canada on December 31 of the year; or
  • if deceased in the year, resident in Canada on the date of death; or
  • if bankrupt in the year, resident in Canada on December 31 of the year in which the tax year (pre- or post-bankruptcy) ends.
• you received pension income in the year that qualifies for the pension income amount.

Note
You and your spouse or common-law partner will still be eligible to split pension income if living apart at the end of the year for medical, educational, or business reasons (rather than a breakdown in the marriage or common-law partnership).

Eligible pension income can only be split between you (the pensioner) and your spouse or common-law partner (the pension transferee).

You are not prevented from splitting your eligible pension income because of the age of your spouse or common-law partner.

Forms and publications

• General Income Tax and Benefit Package - Guide, Return, and Schedules
• Form T1032, Joint Election to Split Pension Income

Related topics

• Line 115 - Other pensions or superannuation
• Line 129 - RRSP income
• Line 314 - Pension income amount

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