NCP recently unemployed & changed CS

[officenurse]

6 figure earning NCP recently lost his job and decided to reduce his CS based on what he "expects" to receive from EI. Is this reasonable?

Is there any expectation that he access his assets to continue with his regular support given his 2011 tax return which will show his 6 figure income which will be what determines his CS next year when he provides his annual disclosure obligations? Based on his education, training and experience he will continue to be capable of earning 6 figures.

Any thoughts?

[beebie]

Isn't there a maximum payment for EI? He would get that which is predictable.

If he has to go to court to change his CS Order, then you can argue that he has ample assets to pay CS in the interim till he gets new job. I don't know if that would work because CS is based on income but it might depend on if he has luxurious toys that could be easily liquidated. Not a sure bet.

[standing on the sidelines]

to me the assets should not come into play. CS is income based and not asset based.

Try working with the guy on this, ask him to show you the papers stating how much he will be recieving and use the tables to figure out his new amount. Make sure you have an agreement written up that states when his income goes up then the cs goes up to reflect that.

[billm]

Originally Posted by officenurse

6 figure earning NCP recently lost his job and decided to reduce his CS based on what he "expects" to receive from EI. Is this reasonable?

Is there any expectation that he access his assets to continue with his regular support given his 2011 tax return which will show his 6 figure income which will be what determines his CS next year when he provides his annual disclosure obligations? Based on his education, training and experience he will continue to be capable of earning 6 figures.

Any thoughts?

Are you saying you adjust CS yearly based on the previous year's tax return?

In that case, he should follow that plan and NOT reduce CS - it will work out in the end when he does his 2012 tax year adjustment. If he can't afford to pay CS now because he lost his job etc, he should fill in the gap with credit or assets.

The whole purpose of adjusting yearly based on previous year tax return is to simply pay CS according to income - suddenly adjusting it when you lose your job is stupid and complicates things.

In my current proposed separation agreement I have added this clause (CS is updated yearly based on previous year tax return)

The Husband and Wife agree that significant financial change in circumstance for either the Husband or Wife (ie, job loss, etc) is covered in this Child Support agreement. Loss of income shall be covered by the Husband or Wife using their respective assets or other means until adjustments due to income changes are accounted for in subsequent yearly Child Support adjustments as stated in this agreement. The Husband and Wife agree that it is their individual responsibility to stay in a position to adhere to the current Child Support payment and agreement until changes to the Child Support payments reflect the new financial situation and neither will hold the other responsible to assist the other. Increase in income will be accounted for by future Child Support yearly adjustments.

[billiechic]

officenurse: Your ex has to apply for a motion to change if he is now unemployed. I am guessing that you are currently using the previous years income tax to determine payment, as you mentioned this in your post. He cannot arbitrarily change CS, and it is required that he provide you with some paperwork (EI paystub) showing you that he is in fact unemployed. If/when he does give you proof, then you can decide to negotiate a lower CS, go with the new guideline, or fight it. NOT based on his current income, or inability to pay, but based on the fact that any changes in income will be accounted for in the yearly adjustment, and so in his 2012 adjustment.

I am going through this exact thing now. Except that we have BOTH been unemployed. I am willing to continue with the CS payment according to our order (CS determined by last years line 150), but he wants to go with current income.

I have no assets to cover my payments to him. EI will pay me at the top threshold, but this is only $485/week before taxes. he is on WSIB and earning more than me.

Stupidly he still insists on a CS adjustement, even though the changes would be addressed in July 2012. Which means he will have to PAY me.

[FaithandMorals]

In Ontario at least, assets have almost ZERO to do with CS. If the assets are substantial and quantifiable they MAY be asked to contribute at approximately 2% per year. For example if someone has $100,000 asset and no income the CS would be $2000 per year or even less because it is below the threshold.
If the person is underemployed you can seek to have an income imputed but it is not straight forward. The notion that if someone loses their job they must sell their assets to provide CS rates based on an old level of income until presumably that person has nothing left is nonsense and not in any child's best interest.
Try working with the parent. There may be genuine reasons they lost their job. Maybe the global recession has something to do with it?

[kinmi]

Our case, on EI most of 2011 kept current with previous CS amount (difficult on EI), worked last 3 months. Looked FWD to decreasing CS in 2012, but ex went to lawyer who forced me to pay increased amount d/t my current income. According to my atty, and the court, it should be based on what I expect to make in 2012, not the lower amount of 2011. Ugh!

[fireweb13]

One question I have is if he was given any severance package?

[NBDad]

According to my atty, and the court, it should be based on what I expect to make in 2012, not the lower amount of 2011. Ugh!

I hope you argued for a reduction based on the over payment you made the prior year. You had status quo in determining CS, and that you had made payments more than you should have due to your understanding of it.

It's stupid to fight about, if you adjust yearly, it all comes out in the wash. By the letter of the law, you should be calculating your CS EVERY payday, but since that is stupid and pointless, often times line 150 with a yearly calculation is used.

[billm]

Originally Posted by FaithandMorals

...The notion that if someone loses their job they must sell their assets to provide CS rates based on an old level of income until presumably that person has nothing left is nonsense and not in any child's best interest...

If you are referring to my post, then I disagree.

If you adjust your CS yearly based on the previous year income, then losing your job, is NOT a reason to suddenly adjust CS. Job loss will be covered at the yearly adjustment.

If you don't have the money on hand to pay for the CS after you lose your job, you should use your assets, or whatever means possible to pay the CS in this case.

The simple point is that over the time that CS is applicable, the parents should support their kids in proportion to their incomes. Adjusting CS every year based on previous years income makes this happen. How the parent pays the CS or comes up with the money is not relevant, and should not be of concern of the other parent.