When British Columbia residents who are participants in pension plans go through a divorce, their plan interests are normally subject to property division. If part of the pension benefits are disability payments, the person’s spouse may be entitled to receive a share of those as well.
Under the Family Law Act, in order for a spouse to receive a portion of disability benefits from the other spouse’s pension, there must either be an agreement for them to have a part of the disability portion, or there must be an order from the judge to apportion those amounts. If there is no order regarding the disability amounts, they will remain the sole property of the account holder.
If the division is ordered, payment of the disability benefits to the recipient spouse will continue until the earlier to occur of the death of the account holder or the termination of the disability benefits. The plan member’s entitlement to disability benefits does not affect how any of the other plan benefits will be divided. If required, the spouses will need to provide a notice or waiver to the plan’s administrator for the benefits to be apportioned.
People may not be aware that any disability portion of pensions may also be divisible in a divorce property settlement or property division order. Those who believe that they may be entitled to a portion of their spouse’s disability benefits may want to ask their family law lawyer about it. If they fail to include it in any negotiated property settlement, they will not receive amounts they otherwise might have received. In the event an agreement cannot be reached regarding the settlement of property, people may want to remember to request a portion of those disability benefits from the judge in their contested divorce hearing.