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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1 (permalink)  
Old 03-07-2014, 02:59 PM
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Default 1% of CS to go for S7?

Have been hit with this recently - just curious if anyone else has.
Argument (by ex) put forth to have 1% of CS provided to her designated towards S7. Problem is that ex is now putting that 1% (1800.00) on her side of the ledger as a cost into DivorceMate Calculations. This in turn artificially inflates CS and SS. She further wants that 1% to increase to 3-5% which will then make CS and SS to a point where I can't make monthly budget costs.
This 1% "solution" is case law coming out of NB.
My... understanding (and please correct me if wrong) is that CS gets determined first - then if there is a set S7 payment per month - say 150-200.00/mth - that gets paid second. After those numbers are put in the resulting SS calculations are done.
Is this the correct method or not?
Has anyone done this 1% or been subjected to it?
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Old 03-07-2014, 10:43 PM
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That's just weird. There is no set S7 payment per month - the amount of S7 you pay is determined by your share of the S7 expenses incurred by you and your ex. You shouldn't be paying S7 unless a) you have agreed to the expense in advance; b) you have a receipt that shows the expense was actually incurred. I've never heard of this "1% solution".

So I suggest that you politely and diplomatically tell your ex to take a hike on this one.
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Old 03-08-2014, 02:31 AM
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Thanks stripes but I respectfully disagree regarding pre-set S7 amounts. More and more case decisions involving S7 expenses are having the payor paying a set monthly cost in an effort to prevent conflict situations between the parties. I do dispute some of the expenses being identified as S7 especially extracurricular recreation expenses - and ideally I would want the extraordinary extracurricular activities decided on a case by case basis - however my situation is high conflict.
In her eyes everything is S7 - in my eyes very little is S7.
All that aside - it was this reference to a NB court decision that had me concerned and wondering if anyone else had been subjected to that.
Cheers
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Old 03-08-2014, 10:57 AM
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Quote:
Originally Posted by thefunone View Post
Thanks stripes but I respectfully disagree regarding pre-set S7 amounts. More and more case decisions involving S7 expenses are having the payor paying a set monthly cost in an effort to prevent conflict situations between the parties. I do dispute some of the expenses being identified as S7 especially extracurricular recreation expenses - and ideally I would want the extraordinary extracurricular activities decided on a case by case basis - however my situation is high conflict.
In her eyes everything is S7 - in my eyes very little is S7.
All that aside - it was this reference to a NB court decision that had me concerned and wondering if anyone else had been subjected to that.
Cheers
Specific S7 amounts in an agreement are one thing, but to hinge S7 as a percentage of CS isn't the same thing. I've asked for specific amounts for S7 in my current motion because the ex doesn't voluntarily do anything.

My daughter's braces will cost $6200. Not one penny of that expense is conditional on her father's income. Whether he makes 25000 or 75000 = the cost is the same.

The 1% thing doesn't account for the custodial parent's income - which is a significant part in calculating S7 expenses proportionately.

Unless the 1% thing is used as a guideline contribution, with it all to be rectified at year end, then it isn't really solving any situation at all, except for the situations where the payor of S7 expenses is not reimbursing the person who bore the cost in the first place. The 1% would cover some of it, but I highly doubt it would cover everything, and re-calculations have to be done anyway.
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Old 03-08-2014, 12:00 PM
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"My daughter's braces will cost $6200. Not one penny of that expense is conditional on her father's income. Whether he makes 25000 or 75000 = the cost is the same."

Yes - agreed - but while the cost is the same - the proportionate share of the cost attributed to your ex IS based on his income...compared to yours.

That said - I am still wondering about how the calculations - specifically in what order (if there is an order) get calculated.

I do not have my kids 40% of the time and therefore pay table amounts.

Is it Child Support first (table amounts - based on payor income) - then Section 7 costs (if any - proportionate share based on payor and payee incomes) - then (based on what is remaining) - Spousal Support?

If I'm making this more confusing - sorry all
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Old 03-08-2014, 12:05 PM
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Quote:
Originally Posted by thefunone View Post
"My daughter's braces will cost $6200. Not one penny of that expense is conditional on her father's income. Whether he makes 25000 or 75000 = the cost is the same."

Yes - agreed - but while the cost is the same - the proportionate share of the cost attributed to your ex IS based on his income...compared to yours.

That said - I am still wondering about how the calculations - specifically in what order (if there is an order) get calculated.

I do not have my kids 40% of the time and therefore pay table amounts.

Is it Child Support first (table amounts - based on payor income) - then Section 7 costs (if any - proportionate share based on payor and payee incomes) - then (based on what is remaining) - Spousal Support?

If I'm making this more confusing - sorry all
My point was 1% of CS won't cover that expense. And, since CS is based on his income, and has nothing to do with mine, it has no accounting for my income in that calculation.

CS on $25000/a is $200 per month. 1% of that is $20 per month. Based on the 1% factor, and the monthly payment of braces being $221, I'd have to be making over $250000 per annum to make that 1% even close to proportionate.
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Old 03-08-2014, 12:27 PM
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the 1% debate /case law argument was not that that was ALL you get....it was that the $240.00 (in your case) is deemed to go towards the total cost - then the remaining $5960.00 gets split proportionately based on your incomes...if he is responsible for 50% 60%, 70%, 80% or some other percentage based on your incomes?

damn - sorry for the confusion
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Old 03-08-2014, 12:33 PM
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Quote:
Originally Posted by thefunone View Post
the 1% debate /case law argument was not that that was ALL you get....it was that the $240.00 (in your case) is deemed to go towards the total cost - then the remaining $5960.00 gets split proportionately based on your incomes...if he is responsible for 50% 60%, 70%, 80% or some other percentage based on your incomes?

damn - sorry for the confusion
Those aren't the real CS numbers, it was used for easy illustration. But, even using the real numbers, the income I'd be required to make to make the 1% proportionate is still in the 6 digit range, and I assure you, that is not the case. If it were, I wouldn't care about the S7 expenses.

If the 1% was only meant to go towards S7 costs, then everything has to be calculated at the end anyway, so I can't see how conflict is being minimized by using that number.

In my case, however, I'd at least get "something" towards the S7 costs, which is more than I get now. But, it's just another point of argument to contend with.

My approach, because I'm dealing with a difficult person, is to request a specific S7 amount to cover the braces, another specific S7 amount to cover a sport that she's involved in. The braces has a specific end date attached to it, the other does not. I'm trying to put the onus on him to communicate with me regarding these pre-determined expenses because he refuses to respond to my communications.

I can't see another way out dealing with the person that I'm dealing with. It has to be specific. Throwing in a 1% thing just further complicates the matter, and may give him the illusion that "it's taken care of".

My 2cents. I wouldn't want it in my agreement.
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Old 03-08-2014, 02:10 PM
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Quote:
Originally Posted by thefunone View Post
Thanks stripes but I respectfully disagree regarding pre-set S7 amounts. More and more case decisions involving S7 expenses are having the payor paying a set monthly cost in an effort to prevent conflict situations between the parties. I do dispute some of the expenses being identified as S7 especially extracurricular recreation expenses - and ideally I would want the extraordinary extracurricular activities decided on a case by case basis - however my situation is high conflict.
In her eyes everything is S7 - in my eyes very little is S7.
All that aside - it was this reference to a NB court decision that had me concerned and wondering if anyone else had been subjected to that.
Cheers
Okay, I guess I see how having a set figure for S7 would reduce the need to communicate with a difficult ex - but then S7 just becomes like a top-up to CS, and the actual extraordinary expenses become irrelevant. And I would be concerned about the ex coming back for more money anyway: "Junior needs braces", "Well, that's what the monthly S7 is for.", "But I spent it already in swimming lessons! It's not enough! Do you want your kids to have crooked teeth?" Etc. If at all possible, it might be wise to hammer out a list of exactly what is S7 which much more specific than what's in the FCSG. More work and headache up front, but possibly less work and headache in the long run.
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Old 03-10-2014, 07:49 AM
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I remember reading a case where 1% was used, although i am not sure if it was 1% of receipient's income + CS or CS only. And if I remember correctly, it was used to determine the amount for extracurriclar activites that is already covered by child support, so not to be split proportionately.
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