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-   -   Child Tax Benefit, does it offset Section 7? (http://www.ottawadivorce.com/forum/f5/child-tax-benefit-does-offset-section-7-a-14210/)

BluePat 01-26-2013 02:59 PM

Child Tax Benefit, does it offset Section 7?
 
Hi all,

I'm curious as my ex seems to want to "rack up" the Section 7 expenses at will, but if she gets a huge chunk of her portion back at tax time, does that make well for me too?

Any and all info welcome.

SingingDad 01-26-2013 04:17 PM

I have actually been looking into this myself recently, and the short answer is yes... if there is a tax benefit associated with the expense (ie medical expenses, child's activity amount, child's art amount) it should be considered with the benefit. My interpretation is that the tax benefit is taken of the top and the rest is shared. Also (I actually asked this in this same forum a few days ago) Benefits paid from CCRA for the child is included as income for apportioning the s. 7 expenses.

Here are the relevant sections from the Guidelines (if I'm understanding your question correctly).

From: Family Law Act - O. Reg. 391/97

Subsidies, tax deductions, etc.
(3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense. O. Reg. 159/07, s. 2.

And from: Family Law Act - O. Reg. 391/97

Special or extraordinary expenses
3.1 To calculate income for the purpose of determining an amount under section 7 of this Regulation, deduct the support, not including child support, paid to the other parent or spouse and, as applicable, make the following adjustment in respect of universal child care benefits:
(a) deduct benefits that are included to determine the parent or spouse’s total income in the T1 General form issued by the Canada Revenue Agency and that are for a child for whom special or extraordinary expenses are not being requested; or
(b) include benefits that are not included to determine the parent or spouse’s total income in the T1 General form issued by the Canada Revenue Agency and that are received by the parent or spouse for a child for whom special or extraordinary expenses are being requested.

BluePat 01-26-2013 06:53 PM

Thanks for your reply.

The reference your quoted is for Ontario, however I'm in Alberta, so it might be somewhat different here... :confused:

SingingDad 01-27-2013 11:30 AM

From the pdf of the alberta guidelines: http://www.qp.alberta.ca/documents/Regs/2005_147.pdf

Schedule 3 Page 22.

"Special or extraordinary expenses
4 To calculate income for the purpose of determining an amount
under section 7 of these Guidelines, deduct the spousal or adult
interdependent partner support paid to the other parent and, as
applicable, make the following adjustment in respect of universal
child care benefits
(a) deduct benefits that are included to determine the parent’s
total income in the T1 General form issued by the Canada
Revenue Agency and that are for a child for whom special
or extraordinary expenses are not being requested, or
(b) include benefits that are not included to determine the
parent’s total income in the T1 General form issued by the
Canada Revenue Agency and that are received by the
parent for a child for whom special or extraordinary
expenses are being requested."

I couldn't find a correlating section for the one that says tax deductions must be considered, but you can read the specifics on page 5 of the PDF.

Mess 01-27-2013 12:27 PM

There are constant references to using NET cost, which means after tax refunds are considered. Look for that phrase. Sorry I didn't have time to go through them myself this morning.

SingingDad 01-27-2013 01:29 PM

Took another look and here is what I was looking for on page 7

"(3) Subject to subsection (4), in determining the amount of an
expense referred to in subsection (1), the court must take into
account any subsidies, benefits or income tax deductions or credits
relating to the expense, and any eligibility to claim a subsidy,
benefit or income tax deduction or credit relating to the expense."

Both sections are exactly the same.

Mess 01-27-2013 01:42 PM

This is a common question, I'm going to sticky it. Thanks SingingDad for the research.

SingingDad 01-27-2013 01:58 PM

Not to get this thread off topic, but one problem I have is that parts seem to contradict each other, specifically regarding the UCCB.

The UCCB is issued by the CRA and is supposed to offset Child care expenses for children under 6. To me it makes sense that it is included since Child care is a s. 7 expense and it's issued by CRA. but Section 7 (4) explicitly says it's not included.

Mess 01-27-2013 02:27 PM

It's not really dedicated to child care. It is issued to all families, even if there is a stay-at-home parent, or if the children are cared for by grandparents during the day, etc. Familiies that have no child care costs still receive the benefit.

The only thing that ties the benefit to child care is the name. There is no legal obligation to dedicate it to daycare fees. Thus, the benefit is included in total income, just like the CCTB.

SingingDad 01-27-2013 02:30 PM

But then what does 7 (4) mean?

Universal child care benefit
(4) In determining the amount of an expense referred to in subsection (1), the court shall not take into account any universal child care benefit or any eligibility to claim that benefit. O. Reg. 159/07, s. 2.


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