Common Law vs. Marriage

Posted 11 Aug 2014 by Melissa Allan

It seems more common in recent years that people don’t enter legal marriages and instead often live common law for their entire life, thinking it’s the same thing but it really isn’t. I thought it would be a good idea to point out the differences when it comes to pensions, tax filing, etc.

Unfortunately, there is no common definition across our provinces for the required cohabitation period required to be deemed common law. There is also no criterion to define when a common-law relationship ends. I often hear couples referred to as common law after a year of cohabitation but it depends on what province you reside in and what law you’re looking at. The Canada Pension Plan considers you common law after 1 year where as the Custody Act considers you common law after 2 years.

In a legal divorce, Canada Pension Plan will automatically contact you to discuss pension credit splitting, and both a marriage and divorce certificate are required. In common law relationships, however, the person will have to apply for the credit as they are not contacted automatically. A statutory declaration of a common law relationship would be required to state when the relationship started and ended as the only credits being split will be when both parties lived together.

In a common law relationship, pension benefits and debt are not split at separation where as in a legal marriage property is typically split 50/50 under the presumption that these benefits were split in the marriage. If you’re in a common law relationship do you know what happens to your pension plan if you die? Most pension plans pay a survivor benefit to a spouse upon death but not all pension plans recognize common law relationships. If in doubt, check!

One thing that is common in all provinces is that provincial legislation stipulates that even if there is no legal marriage, if you have a child together and then separate, financial requirements for child support are payable in most situations. The actual amount of child support of course depends on the number of children, custody agreement, payer’s income and your province of residence.

If you’re in a common law relationship I would recommend both partners have a discussion regarding these topics and perhaps a cohabitation agreement to identify the rights and obligations of each spouse during the relationship. You would, of course, want to seek professional legal advice on this.