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

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Old 01-07-2010, 07:35 PM
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Default Net Day-Care Expense

Has anyone heard anything about the sharing of a "net" daycare expense?

My husband consulted with a lawyer today with regards to the sharing of daycare expenses. [In a nutshell: The recipient wants my husband - the payor - to pay 100% of daycare costs during his court-ordered access days, plus provide his proportionate share of all other daycare expenses.]

The family lawyer my husband consulted with at FLIC told him that he should be responsible only for his proportionate share of NET daycare expenses; more specifically, the expenses that remain once subsidies, tax refunds, and Universal Child Care Benefit monies have been exhausted.

Makes perfect sense, right?

Well, I looked up the Family Law Act and found out that although subsidies and tax refunds must be taken into account when determining daycare expenses, the Universal Child Care Benefit shall not be taken into account.

Does anyone know why that is?

Or better yet, why would a family lawyer give information/advice that is not consistent with the Family Law Act?

Any info you may have about NET daycare expenses would be much appreciated!
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Old 01-07-2010, 08:12 PM
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Did the family Act specifically mention the UCCB?

Whoever takes the credit for the child care expense should pay a greater proportion of the day care expense, so that in the end, total expenses are the same between the two.

I don't think the UCCB is specified in the laws or guidebooks since it's in tax credits and subsidies.
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Old 01-07-2010, 08:35 PM
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Quote:
Originally Posted by Foredeck View Post
Did the family Act specifically mention the UCCB?

Whoever takes the credit for the child care expense should pay a greater proportion of the day care expense, so that in the end, total expenses are the same between the two.

I don't think the UCCB is specified in the laws or guidebooks since it's in tax credits and subsidies.
Yes, the lawyer specifically mentioned the UCCB.

When I looked it up in the Family Law Act, this is what I found:

Family Law Act - O. Reg. 391/97

Special or extraordinary expenses

7. (1) In an order for the support of a child, the court may, on the request of either parent or spouse or of an applicant under section 33 of the Act, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the parents or spouses and those of the child and to the spending pattern of the parents or spouses in respect of the child during cohabitation:

(a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment;

(b) that portion of the medical and dental insurance premiums attributable to the child;

(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy, prescription drugs, hearing aids, glasses and contact lenses;

(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities.
O. Reg. 391/97, s. 7 (1); O. Reg. 446/01, s. 2.

Definition, “extraordinary expenses”
(1.1) For the purposes of clauses (1) (d) and (f),
“extraordinary expenses” means

(a) expenses that exceed those that the parent or spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that parent’s or spouse’s income and the amount that the parent or spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate, or

(b) where clause (a) is not applicable, expenses that the court considers are extraordinary taking into account,

(i) the amount of the expense in relation to the income of the parent or spouse requesting the amount, including the amount that the parent or spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,

(ii) the nature and number of the educational programs and extracurricular activities,

(iii) any special needs and talents of the child,

(iv) the overall cost of the programs and activities, and

(v) any other similar factors that the court considers relevant.
O. Reg. 102/06, s. 1.

Sharing of expense
(2) The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the parents or spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child. O. Reg. 391/97, s. 7 (2).

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.

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.

You see why we're confused? The lawyer says that the UCCB should be taken into consideration, and the FLA says otherwise.

That is why I'm wondering if anyone has dealt with "NET" daycare expenses before.

Last edited by #1StepMom; 01-07-2010 at 08:39 PM.
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Old 01-07-2010, 08:52 PM
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Interesting. I don't think any of the child tax credits/benefits are directly tied to the amount paid for daycare. All of the eligibility rules and amounts are based on # children/ages/disability, your income and marital status, and guardianship of children. You get the UCCB even if you have no daycare expenses. So even though the UCCB is nominally intended to cover daycare expenses, in reality, there is no connection.

Yet, in the justice.gc.ca step-by-step workbook for the Federal Child Support Guidelines, the example specifically says "... The amount is “net” because they must consider the tax deduction Patrick will receive for child-care expenses, and the increase he will receive in the National Child Benefit.)"

The Federal Child Support Guidelines: Step-by-Step

Sorry, I know that's not an answer...
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Old 01-07-2010, 10:08 PM
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The UCCB is considered income and it shows on line 150. Basically, say incomes are 20/80, the UCCB is part of the 20% of the CP's income and goes proportionately to pay for daycare anyway.

"Child care" is just a catch phrase, this is just the "Baby Bonus" with another name, it isn't specificly for daycare. Parents who are stay-at-home still receive the benefit, to argue semantics, it pays for "caring for the children" regardless of what that care entails. It could be new shoes, it could be a babysitter for Saturday night.

I think it got mentioned in the Act because the name and intent is misleading and so many people thought it should be directed specificly into section 7's.
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Old 01-08-2010, 02:14 AM
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I see, since it is included in income and so affects the proportional split, it wouldn't be right to also use it to reduce the cost to be shared.

But I wonder what tax 'stuff' the 'net cost' example on the justic.gc.ca website is referring to??? All I can think is that maybe the example was written when the tax benefits and/or FLA rules were different, and has not been updated.

Last edited by dinkyface; 01-08-2010 at 02:16 AM.
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Old 01-08-2010, 08:49 AM
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Quote:
Originally Posted by Mess View Post
The UCCB is considered income and it shows on line 150. Basically, say incomes are 20/80, the UCCB is part of the 20% of the CP's income and goes proportionately to pay for daycare anyway.
Hmmm... you're right.

I wonder why the lawyer at FLIC told my husband that it should be taken into account.

Odd.

Either way, what the lawyer said agrees, for the most part (minus the UCCB thing) with what's in the current court order. So we feel a little better about the recipient's claim that my husband should pay 100% of daycare fees incurred during his access time, on top of his proportionate share of other daycare expenses. But, the lawyer also said that although it's not fair, most judges will agree with the mother. So really, we don't know what possible outcome to expect... guidelines, or yet another ridiculous order against the guidelines and in favour of the mother. :-(
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