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  • moving to US, child support in US funds?

    I'm moving to the US, how do I calculate child support for a child in Ontario?

    For example, if I'm making 90k in CDN funds, child support is 801/mth, so I pay 801/mth CDN funds. If I move to US and start earning 90k in US funds, do I still pay 801/mth in CDN funds or give 801/mth in US funds so she'll really get 1058/mth CDN (at today's exchange)?

    I'm not sure how logical it'll be because what if you go to a country that has a worse dollar, and the exchange difference means she would get less than 801/mth CDN?

    There's no spousal and nothing in the agreement to account for this new job opportunity (but ex-spouse is fully supporting the move).

    Dan...

  • #2
    Originally posted by DanTess View Post
    I'm moving to the US, how do I calculate child support for a child in Ontario?.

    For example, if I'm making 90k in CDN funds, child support is 801/mth, so I pay 801/mth CDN funds. If I move to US and start earning 90k in US funds, do I still pay 801/mth in CDN funds or give 801/mth in US funds so she'll really get 1058/mth CDN (at today's exchange)?...
    You should account for the currency exchange. So whatever you make gross, in US$, convert that to CAN$, and that is the Canadian amount you should base your child support off of.

    There are court cases, where not only currency conversion comes into play, but also a payor's gross amount, is "grossed up" to factor in lower tax rates, etc. ex.

    Quick Google search: (www.fbfamilylaw.mb.ca)
    The conversion of $36,610 U.S. funds to Canadian currency, brings it to $50,157, at an exchange rate of 1.39. The lower tax rate in Texas, effectively 9.3%, in Canada would be 27% higher. The husband’s income is grossed-up for this to $73,200. Table amount is $925.


    Originally posted by DanTess View Post
    ...job opportunity (but ex-spouse is fully supporting the move).
    This could be one of her reasons for supporting your move.
    Last edited by dad2bandm; 10-29-2015, 08:49 AM. Reason: Reference

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    • #3
      Do you already have an order filed with FRO or MEP?

      They will just expect the Canadian dollar equivalent to be paid, meaning you bear all risk on foreign currency fluctuations. They also like to use the bank of Canada rate for exchange, which only fairies and unicorns pay. The rest of us have to shop around at the bank (sell) rates.

      She would have to bring you back to court to get the amounts converted into CAD and the gross-up to play into the factor.

      Comment


      • #4
        Originally posted by DanTess View Post
        I'm moving to the US, how do I calculate child support for a child in Ontario?

        For example, if I'm making 90k in CDN funds, child support is 801/mth, so I pay 801/mth CDN funds. If I move to US and start earning 90k in US funds, do I still pay 801/mth in CDN funds or give 801/mth in US funds so she'll really get 1058/mth CDN (at today's exchange)?

        I'm not sure how logical it'll be because what if you go to a country that has a worse dollar, and the exchange difference means she would get less than 801/mth CDN?

        There's no spousal and nothing in the agreement to account for this new job opportunity (but ex-spouse is fully supporting the move).

        Dan...

        Exchange rate is based on the average daily rate of exchange for the preceding year UNLESS, the actual exchange rate is known for the period in question (think arrears). This is prevailing case law. The average of the daily rates for 2014 is 10%. Bank of Canada rates is the rate the court defaults to.

        You convert your salary from USD to CAD and use the CAD number to calculate support.

        Comment


        • #5
          Originally posted by nfc4ever View Post
          Do you already have an order filed with FRO or MEP?

          They will just expect the Canadian dollar equivalent to be paid, meaning you bear all risk on foreign currency fluctuations. They also like to use the bank of Canada rate for exchange, which only fairies and unicorns pay. The rest of us have to shop around at the bank (sell) rates.

          She would have to bring you back to court to get the amounts converted into CAD and the gross-up to play into the factor.
          You are completely wrong here.

          You convert the USD to CAD, find the correct child support based on the CAD, and pay that amount in CAD to the person who lives in CAD.

          The average bank of Canada daily rate for the preceeding year is calculated. So, in reality, anyone earning in US $ and paying support in CAD is way ahead of the game. The average bank of Canada rate for 2014 is 10%. Tell me where I can buy a US dollar at that exchange rate?

          This is prevailing case law. It's how my child support was determined by the judge (based on case law). For 2014 - I received the exorbitant exchange rate of 2.9%. When the judge issued judgment, exchange rate was already nearing in on the 20% range.

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          • #6
            Originally posted by nfc4ever View Post
            ...
            She would have to bring you back to court to get the amounts converted into CAD and the gross-up to play into the factor...
            And would be successful, if it came to that. It's up to the payor, to make sure they are paying the amount of child support, that is required. So, to be safe, you should at least be doing the currency conversion, and paying your support, based off your proper gross Canadian amount.

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            • #7
              Originally posted by MS Mom View Post
              You are completely wrong here.
              phrases like this make this look like an attack as opposed to a dialogue.
              Originally posted by MS Mom View Post
              The average bank of Canada daily rate for the preceeding year is calculated. So, in reality, anyone earning in US $ and paying support in CAD is way ahead of the game. The average bank of Canada rate for 2014 is 10%. Tell me where I can buy a US dollar at that exchange rate?
              This is an isolated rate, in an isolated time series, when the Canadian Dollar rebounds there's going to be a flip side adjustment some time in the future of people paying support based on a 1.25 dollar in a 1.10 market. A lot of them wont be the same people.

              To give you an isolated story: I've worked in the US, its frustrating at Canadian tax time to use a rate that attributes more income to you for tax purposes than you actually earned, because guess what? The banks have to make a profit and pay less than the BOC rate on exchange. I can't recall the tax rate from Y2k, but as an example the bank was paying $1.13 and I was paying tax as if I earned $1.15

              Comment


              • #8
                Originally posted by dad2bandm View Post
                And would be successful, if it came to that. It's up to the payor, to make sure they are paying the amount of child support, that is required. So, to be safe, you should at least be doing the currency conversion, and paying your support, based off your proper gross Canadian amount.
                Sorry Dad2bandM, you are correct, I had assumed that the agreement was with a maintenance agency where doing any of the fancy calculations of grossing up income for differences in tax regimes may fall out of their domain thereby requiring a return to court.

                It becomes one of those cost of going back to court is $xx, and the return from a gross up calc is $yy. If $yy> $xx then off to court you go.

                Comment


                • #9
                  Originally posted by nfc4ever View Post
                  ...I had assumed that the agreement was with a maintenance agency where doing any of the fancy calculations of grossing up income for differences in tax regimes may fall out of their domain thereby requiring a return to court...
                  Yes, you are right, if that was the case, then a maintenance agency (like FRO), will only act on the current order, and specifics of the order. Parent A pays parent B x number of Canadian dollars. They would require an updated order. But it's on the paying parent, to make sure they are paying proper support. So when that order is sought, it will be granted. Child support to be paid, is pretty cut and dry.

                  So it's in the original poster's best interests, to make sure he's paying the proper support.

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                  • #10
                    i'm not worried about it - she'll get what i give her!

                    just kidding - i'll do exchange and pay based on that number as required... her child support amount will go up 60-70% so she'll be ecstatic

                    thanks for the info!

                    Dan...

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                    • #11
                      Sorry, your situation has been floating around in the back of my head. You might also want to reach out to the CRAor a ruling. There are a number of criteria where the CRA may consider you to be a Canadian resident for tax purposes. Supporting your family is one of them.

                      Normally having one of the factors is fine, it's having a number of them that becomes a tax issue, and which ones you have. You would hope that the CRA and family courts are on the same page.

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                      • #12
                        thanks for the reply! I'm way ahead of you, i'll be making sure I am not deemed a resident for tax purposes sever all ties except child support which on it's own does not constitute residency...

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