Court Interest - Post-judgement and Separation Agreement. Taxes on arrears

[Blueeyes]

Long story short...I was successful in my application to the courts and discovered that my ex spouse was underpaying child support for the last 10 years...as a matter of fact contrary to common practice his conduct was deemed blameworthy by the judge and all arrears calculated from 2003 to 2009. Family enforcement was able to collect a 6 digit amount of arrears but now the question...I am now forwarding an application to the Court for cost, it is my opinion that I was successful, and in consideration of the fact that despite this amount was collected in 2010 the original separation agreement with standard clauses for child support based on payor's income was settled in 2001. The ruling judge did not vary the terms of the separation agreement so it is my position that interest on arrears should be ordered starting 2001. I am looking for info on his matter or more in particular court cases where this matter was discussed...I tried Can LII database but I can not find any case that deals with a separation agreement and related arrears.

Also in consideration of the fact that part of the arrears were related to Spousal Support should I add this to my taxable income this year or any idea on how to reduce this amount.

Looking for input...Thank you

[Mess]

Hi,
I was told by my own lawyer that support arrears would be charged 2% interest, and this was a standard amount applied by the courts, but I have no idea where you would find a source for this info. I hope it helps to at least know that what you are looking for exists somewhere...

Lump sum spousal is not considered deductible by the payor, or taxable to the payee. You should confirm this with an accountant though. If dadtotheend pops in here, he is a reliable source of tax info.

[Blueeyes]

Thanks Mess


Lump sump payment are considere such for taxable purposes only if ordered...If the payor makes a lump payment it is still taxable for the payee but the payor needs to apply to CRA to have his deductions. The only advantage is that the payee can request CRA to have the amounts applied to past years and have all related tax returns reassesset..this is my understanding...quite honestly seems a lot of work for something that someone else was doing wrong...

[logicalvelocity]

Pre and post rates as amended:

Ministry of the Attorney General - Courts of Justice Act, s.127