Scholarship grossing up

[Kochin]

I am being asked to gross-up my scholarship award for spousal support calculations by my ex. It is not a taxable income and has no normal benefits (CPP, EI, health) included in the net amount. What is normal for this kind of non-taxable income? Anyone with experience on this?

[Ihave2kidsIcannotsee]

Can he do that because if its not taxed then its not part of your normal income?

[Kochin]

Actually she has the job, I am the student and she wants spousal support because of the job I may potentially get once I am finished. I know it sounds a bit far fetched, but that is what I am dealing with. So on the chance there is a SS judgement, does scholarship even enter into the calculation, and if so is it grossed up?

[Ihave2kidsIcannotsee]

I don't see how a scholarship would enter into the equation I don't think she can go after anything that is not taxed income as it is not regular funds that you would normally be making. As far as assuming how much you will make that is ridiculous as that can not be proved until you start earning and every person makes a different wage even in the same area of business. Did she go into the relationship with more then you? Was she the higher wage earner? Then you would get more money from her then she would ever get from you as I see it but I could be wrong.

[Kochin]

I have the same feelings on this as you do on this. To answer your questions, no I came in with more, she was the higher wage earner for most of my education years, but she feels bitter that she curtailed her career while I was in school and for that she wants compensation. I guess we will go to court on it and see what the judge says. Till then I will be paying CS, and I guess I will gross it up according to the tables.
Thanks for your input on this.

[billiechic]

Your scholarship is meant to pay your tuition. It is not income. You cannot use it to pay your rent, buy groceries. It only reduces the amount of debt you will incurr. You only get a scholarship becasue you are in school. I doubt she will be successful and is just wasting time.

You cannot be ordered to pay her SS based on a salary you *might* earn down the road. Maybe on a salary you earned before going back to school, but not something that you haven't earned yet.

When you got the scholarship was it a cheque written in your name or was it directed to the school?

[Kochin]

The scholarship goes through the university and it is quite healthy (35k/yr). I have been supporting two households on it until my ex wife recently got a job. I have posted here wondering if there is any consensus on scholarships. So far everyone I talk thinks they are not considered income, but for CS I am treating it like income and think I should gross it up. Hence my original question.

[Ihave2kidsIcannotsee]

so she is more or less trying to get money from you because she helped you through schooling? Is that what I understand it as? Was she helped by you in the marriage in the beginning when you had more then her? if so it would probably even it out would it not. Court is so confusing so many rules and such can give you an instant migraine just thinking about it. Hope it all works out let me know! Sorry I could not have been of more help.

[billiechic]

Is this actually like a wage? Is it a stipend? at 35K/yr that is not a scholarship I would guess. It sounds like you are being compensated for your work therefore it IS income.

I don't understand what you mean by "gross it up" though.

[dinkyface]

When support amounts are based on a taxable income amount, there is an assumption that the earner pays a 'reasonable'(?) amount of tax on that amount. Therefore, if some or all of that income is taxed at a very low rate (e.g. capital gains), the earner is actually keeping more in pocket than this assumption would indicate. To equalise, the support is based on a 'grossed up' amount. e.g.
$10,000 at 10% tax (i.e. a low rate) -> $9k after tax
would be grossed up to
$11,250 at 20% tax (i.e. a reasonable rate) -> $9k after tax (same as above)

Another example:
$35,000 at 0% tax -> $35K after tax
would be grossed up to
$43,750 at 20% tax