What counts?

[workingthruit]

Do RRSPs count as income for SS and CS calculations?
Can they not be considered "Non-recurring payments" under sec.17?

Do Severance packages count as income for SS and CS calculations?
Can they not be considered "Non-recurring payments" under sec.17?

[FL_Needs_To_Change]

I found some very good information on this topic from the site,

http://www.thepascoedifference.com/selfemployed.html

Here is some parts of it, go to the sit to read it in it's entirety.

Though the Guidelines are specific about using line 150 on the tax return and have specific pattern of income rules, the courts have used section 2(3) to look at the current situation which might not be at all like the previous year or years [see Lee v. Lee (1998) N.J. No. 247, (Nfld. C of A)].
This section would be used when a payor cashed in RRSP's in the previous year as that RRSP shows up as income on a tax return before line 150. Such was the finding in Wedge v. McKenna [1997] P.E.I.J. No.75 (P.E.I.T.D.) . A one time capital gain has been found to be not included in income [Anderson v. Anderson (1997) 32 R.F.L. (4th) 177 (B.C.S.C.)]
SECTIONS 15 to 20 of The Child Support Guidelines

The following sections of the Federal Child Support Guidelines found in the Income sections which might affect the self-employed are as follows :

(a) Agreement (section 15(2))

(b) Pattern of Income (section 17)

(c) Shareholder, director or officer (section 18)

18 (a) keeping the income in the company, and

18 (b) under paying the value of the services

(d) Imputing Income (Section 19)

19 (d) diverted income

19 (e) property is not reasonably utilized to generate income

19 (f) failure to provide income information

19 (g) unreasonable expense deductions from income (regardless of whether tax deductable for income tax purposes (section 19 (2))

19 (h) significant portion of income from dividends, capital gains and losses or other sources that are taxed at a lower rate than employment or business income

Courts have also interrupted section 19 very broadly to include sources of money - whether income or capital which give an ability to pay child support
Pattern of Income

Federal Child Support Guidelines, Income, Section 17

(1) Where the court is of the opinion that the determination of a spouse's annual income from a source of income under section 16 would not provide the fairest determination of the annual income from that source, the court may determine the annual income from that source

(a) where the amount in respect of the source of income has increased in each of the three most recent taxation years or has decreased in each of those three years, to be the amount from that source of income in the spouse's most recent taxation year;

(b) where the amount in respect of the source of income has not increased or decreased as described in paragraph (a), to be the average of the amount received by the spouse from that source of income in the three most recent taxation years, or such other amount, if any, that the court considers appropriate; or

(c) where the spouse has received a non-recurring amount in any of the three most recent taxation years, to be such portion of the amount as the court considers appropriate, if any.

[logicalvelocity]

Awesome post FL

[workingthruit]

this is helpful.

thank you for the effort