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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 10-05-2016, 11:22 AM
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Hi Does RRSP withdrawls count as income ?
I withdrew some to help get by and pay for Daughters braces
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Old 10-05-2016, 02:56 PM
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Short answer: yes.

Long answer: You have to report RRSP withdrawals on your tax return, which is included in your total income (line 150 of your tax return) for the year. The amount reported on line 150 of your return is the amount used by the family court to calculate support amounts, if any. The court may deviate from the line 150 amount, but this would be an exception - not the norm.
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Old 10-05-2016, 03:25 PM
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There have been some arguments for not including it. How much was the withdrawal? What impact does it have on your cs payments? How reasonable is your ex?

My partners lawyer has told him that his rrsp payout and t5 dividends are not considered income for child support purposes because the payout was a company rrsp transferred to his personal one when he lost his job and the t5 income was from when he withdrew money for his kids university costs.

If you are living off the amounts as income they are most certainly income for cs calculations. If they are smaller and used to cover cs or s7 they could be argued as individual one time expenses that are necessarily income.
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Old 10-05-2016, 03:38 PM
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There is not a clear answer. As rockscan said, if you have a pattern of withdrawal, then it could be considered income. If you rarely withdraw, then it is not income.

If you are the payor, I would not count it as income and let the payee try and drag you to court over it. If recipient asks say something to the effect of "I looked it up and it is not considered to be income". End of story.
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Old 10-05-2016, 07:55 PM
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It might also depend on when you made the contributions into the RRSP. If you made them during a year when you were paying child support (i.e. after divorce), you could argue that you already included the money in your line 150 CS calculations, during the year when you paid into the RRSP, and so it would be double-dipping to count the money again as income in the year that you draw it out. But if the RRSP contributions were made over a long period of time, including before you were divorced, then you never paid CS on them in the first place and so it's reasonable to count them as income in the year that you withdraw them. But that's kind of a complex argument.

From what I can remember reading, if you treat the RRSP withdrawal like regular income (if you withdraw money often and use it to pay your living expenses or nonessential expenses), then the withdrawals count as income for CS purposes. If you treat the RRSP withdrawal as an exceptional one-time event (e.g. your house is in a fire and you withdraw $2000 for repairs), then you can argue that it's not truly income, but the onus is on you to show why your RRSP withdrawal should not be counted as income. Obviously if you're retired or unemployed and using RRSP money to pay the bills, it's income.
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