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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 01-11-2017, 10:29 PM
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Default Section 7 and lump sum support

I have a question and was hoping somebody could help me. I'm deciding between offering a lump sum support payment or ongoing monthly support.
While I'd prefer to make a lump sum, I'm concerned that this will mean that I will have to pay more of a share of section 7 expenses going forward as this support won't be added to my ex's income over the next few years. For example, with ongoing SS, I would pay 60/40 s7, but with lump sum would it be based on our incomes without additional support included (more like 80/20)?

I'm concerned she's going to rake me over the coals with section 7 claims.

Does anybody have any experience/advice on this? Am I misunderstanding this?

Thanks so much for any assistance
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Old 01-11-2017, 10:53 PM
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Can this be addressed in your separation agreement?

eg.

"For the purposes of determining proportionate shares of s7 expenses only, the lump sum of spousal support will be considered to be equivalent to extra income $1000/month for the recipient and -$1000/month deducted from the income of the payor."

I didn't word that well, but that's my brainstorm idea.
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Old 01-12-2017, 12:36 AM
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Normally Cs is paid before alimony so alimony isn't considered income for the purposes Of Cs and s7
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Old 01-12-2017, 08:19 AM
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And in most cases s7 has to be agreed to. Only medical and daycare are set s7 to be paid. She cant just sign the kids up for everything and then come calling. Remember the wording is "extra-ordinary" in light of the income of both parents including cs and ss.
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Old 01-12-2017, 10:51 AM
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Quote:
Originally Posted by Links17 View Post
Normally Cs is paid before alimony so alimony isn't considered income for the purposes Of Cs and s7
For whatever reason, s7 is determined using gross income. Spousal support changes gross income. S7 should of course be calculated on net income after CS and SS, but it isn't, because the people who make the rules don't get math.
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Old 01-12-2017, 11:11 AM
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Bear in mind that SS is tax-deductible (for you) when it's done as monthly payments but not when it's done as a one-time transfer, so there may be benefits to paying monthly with a set end date, even if it means that you pay a higher proportion of S7 than you would with a lump-sum SS payment.

Whether this is beneficial or not depends on how much you expect S7 to amount to in the next few years. As others have pointed out, the only non-negotiable S7 expenses are child care and medical expenses - everything else needs your agreement.
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Old 01-12-2017, 12:07 PM
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Thanks everybody for your help. She's already asking for me to pay for a nanny as section 7 and I can only see this escalating (private schools, etc).

Its frustrating that if I pay a lump sum spousal support that I will owe more section 7 expenses down the line because it won't change her or my incomes.

If I instead pay ongoing monthly spousal support, our incomes will be more balanced so I would pay less section 7, and she'd be less likely to abuse it.

Does anyone have experience fighting section 7 claims? Will we have to go to court every time we can't agree on what qualifies? She's getting huge support payments, yet wants a nanny, extra-curriculars, camp, etc.

Thanks again.
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Old 01-12-2017, 12:07 PM
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Also, child support cannot be paid in a lump sum unless there is an agreement to waiver from the guidelines (which never happens). You may add a s7 amount to your cs obligations but that doesnt always work if you dont update your agreement. For instance you pay an additional amount for daycare and the child has reached the age where its not required.

Think about all the aspects including long term ramifications of this decision. SS is included in the other parents income for proportionate share of s7.
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