Federal, provincial and territorial benefits, credits and programs
Allocating pension income to a spouse or common-law partner reduces the transferring spouse or common-law partner's net income and increases the receiving spouse or common-law partner's net income. As a result, benefits and tax credits that are calculated based on the total of the net incomes of both spouses or common-law partners (such as the GST/HST credit) will not change because of pension splitting.
However, pension splitting will affect any tax credits and benefits that are calculated using one taxpayer's net income, such as the age amount, the spouse or common-law partner amount, and the repayment of old age security benefits.
The allocation of pension income may also affect certain federal, provincial, or territorial programs.
Many taxpayers, including pensioners, are required to pay tax by instalments. The CRA issues instalment reminders to them indicating the amounts to be paid by each instalment due date. However, as an alternative to paying the amounts shown on the reminders, instalment payments can instead be made based on either the individual's prior-year net tax owing and CPP payable, or their estimated current-year net tax owing and CPP payable.
For more information, go to Paying your income tax by instalments.
Forms and publications
- General Income Tax and Benefit package – Guide, return, and schedules
- Pamphlet RC4210, GST/HST Credit
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