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Section 7 percentage - why based on gross and not NDI??

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  • Section 7 percentage - why based on gross and not NDI??

    I'm just looking at a divorce mate calculation

    It lists the NDI after SS/CS as 50.5% and 49.5% for the two parents.

    Yet it states that the CSG Special Expenses Apportioning is 70/30 which uses the gross incomes (line 150).

    Why on earth would the Special expense ratio be determined using the gross income and not the NDI?

    It seems clear to me that in this scenario the special expenses should be shared 50/50, not 70/30.

    What am I missing??

  • #2
    Originally posted by billm View Post

    What am I missing??
    the understanding that nutbars made the rules. not humans!

    Comment


    • #3
      because section 7 is considered to be part of CS. The amount should be deducted the same way as CS table amount when determining the amount of SS. But, is it done that way? Rarely...

      Comment


      • #4
        Just wanted to bump this thread because I fail to see why there is not more discussion of this problem.

        I'm looking at a divorce mate calculation (offset CS). It states My NDI is 49.9% and hers is 50.1% after considering taxes, SS, and offset CS. I pay CS/SS because I make more than her.

        This means that we have exactly the same amount of money in our hands after CS/SS is paid (ie after taxes, CS, and SS - we are equal!)

        BUT then it says that the CSG Special Expenses Apportioning is 64.1% me and 35.9% her.

        Meaning despite having the same cash on hand as my ex, I have to contribute almost twice as much when my child gets braces for example.

        Again I say WHY IS THIS OBVIOUS INJUSTICE NOT CORRECTED and
        what am I missing????

        And if this obvious flaw exists, that is on every divorce mate printout for all to easily see, what about the flaws that must exist inside the guidelines?

        Comment


        • #5
          because section 7 is considered to be part of CS. The amount should be deducted the same way as CS table amount when determining the amount of SS.
          Excellent answer.

          WHY IS THIS OBVIOUS INJUSTICE NOT CORRECTED and
          what am I missing?
          Your spousal support should reflect the extraordinary expense payments. If there is an overpayment, it is in spousal support, not s.7 expenses.

          Comment


          • #6
            Originally posted by OrleansLawyer View Post
            Excellent answer.


            Your spousal support should reflect the extraordinary expense payments. If there is an overpayment, it is in spousal support, not s.7 expenses.
            This seems problematic as CS/SS is static and section 7 is variable during the year. Retro adjusting SS based on what was spent on section 7 seems complicated, and not doing that means it is unfair.

            Guessing on section 7 expenses to determine SS also seems like a problematic idea.

            Determining section 7 ratio based on actual income and actual CS/SS (aka NDI), seems to make more sense. Wow, everything seems designed to always default to more money from the payor, regardless of NDI etc.

            Comment


            • #7
              I need some help in understanding this. And hopefully some one will say it to me like a two year old as I find this whole issue and calculation very difficult to understand.

              Firstly, we are self represented. Is there any way to do this calculation online given we do not have divorce mate software... we don't trust the other lawyer either.

              Mom receives child support and spousal support. Plus she is self employed with no reduction to spousal support. She also receives CCTB. Her two support cheques a month are significant even without her employment and a hefty CCTB cheque as well. Do all the above count towards her "income" for the purpose of determining offset child support in a shared parenting regime?

              How do section 7/extraordinary expenses get determined? Both parents have substantial incomes so the $100 a year rule of thumb doesn't really apply. I'm not sure what the threshold would be to consider something extraordinary but I would think it would be in excess of $500, possibly higher, a year given support payments exceed $3K a month alone. Any thoughts?

              And if the mom is self employed what kind of financial paperwork must she provide with her financial statement? I'm assuming disclosure means complete disclosure so we should see statements of earnings and expenses for her business with the financial statement? And her CRA forms submitted with her income tax return or just the notices of assessment?

              Thank you for your assistance.

              Comment


              • #8
                Originally posted by OrleansLawyer View Post
                Your spousal support should reflect the extraordinary expense payments. If there is an overpayment, it is in spousal support, not s.7 expenses.
                So, how does this work?

                So you are saying that for example in divorcemate you can enter the anticipated or known section 7, and it will reduce the SS amount?

                Is the Section 7 ratio unaffected by the amount of section 7 spent in a year? I think so.

                If you pay CS/SS based on FCGS/SSAG without section 7 known, and then determine what was spent on section 7 at the end of the year, can/should SS be adjusted retroactively (ie redo the divorcemate calculation with section 7)?

                Comment


                • #9
                  in divorcemate you can enter the anticipated or known section 7, and it will reduce the SS amount?
                  You could look at the reasonably expected s.7 costs as being a reduction in the parties' after tax income.

                  Keep in mind that while divorcemate is a useful tool, it is not perfect. There are complexities that it cannot address (as well as disappointingly simple tasks, such as calculating lump sum amounts).

                  Is the Section 7 ratio unaffected by the amount of section 7 spent in a year?
                  Yes, it is unaffected.

                  can/should SS be adjusted retroactively
                  Unless the s.7 amounts are astronomical, I would be surprised if it was found to allow a material change in circumstances.

                  Comment


                  • #10
                    Originally posted by OrleansLawyer View Post
                    You could look at the reasonably expected s.7 costs as being a reduction in the parties' after tax income.
                    Does the SSAG mention section 7 should reduce SS, or is it implicit?

                    Comment


                    • #11
                      One of the problems with our current support system is that the arbitrary equivalence scale used to calculate the monthly CS amount is in line with equivalence scales that include Special and extraordinary spending.

                      So if you are paying a full table amount you are either getting paying your portion s.7 expenses twice or you are equalizing costs that don't exist (if there are no s.7 expenses).

                      If the equivalence scale were indexed to actual parental spending and constructed to exclude costs that are special and extraordinary the the ratio of of total income would be valid.

                      Unfortunately the desire at the time was to increase support amounts rather than accurately account for parental spending.

                      Comment


                      • #12
                        I'm just looking at a divorce mate calculation

                        It lists the NDI after SS/CS as 50.5% and 49.5% for the two parents.

                        Yet it states that the CSG Special Expenses Apportioning is 70/30 which uses the gross incomes (line 150).

                        Why on earth would the Special expense ratio be determined using the gross income and not the NDI?

                        It seems clear to me that in this scenario the special expenses should be shared 50/50, not 70/30.

                        What am I missing??
                        As an update, I may have been mistaken in my previous posts. I will be looking into this, however I suggest that people do not rely on my previous posts in this thread.

                        When I have time, I intend to run some numbers in divorce mate and see how they compare with the legislation, and with the rules of equity.

                        Comment

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