CCTB and Co-Habitation

[mgb]

Please I hope smeone here has an answer for me for what to do with my Canadian Child Tax Benefit application...

I have 2 daughters with my first wife whom is deceased. And I also have a recent addition of another daughter with my girl friend. My gf and I have a co-habitation agreement where we split the expenses 70 - 30. She is not financialy responsible for my 2 daughters whatsoever and we are seperate entities financialy speaking.

I went to apply for CCTB for our newest addition. To my surprise, my current CCTB aount would be reduced because they were including my gf in the calculations even when adding a third child. I feel this is incorrect as I'm the sole financial provider for my 2 oldest daughters plus I also have to provide for my youngest child.

Should I tell Revenue Canada that my gf has not adopted my 2 children and that she has no financial responsibility of them and that we also have a co-habitation agreement? Should we still file our income tax as single as we are financialy seperate?

Confused and frustrated....

[NBDad]

CRA is bound by the Income Tax act. You and your girlfriend are considered common law now that you have a child together and are a blended family unit. Therefore the fact that she isn't financially responsible for your other two children is irrelevant.

YOU claiming the CCTB for the new addition basically let them tie you and her together. Once done, now it cannot be undone. What you should have done, if you were looking to try to grey area the system, would be to have HER claim the new addition for CCTB, and you file as widowed, her as single.

You can try to appeal, but I will warn you now, you will most likely be unsuccessful.

[mgb]

Thanks for the reply NBDad. So what you are saying is that a pre-nuptial has no bearing whatsoever with the income tax act? I have researched preivous tax court rulings and found no similar case... I wonder what my chances would be if I go to court. The judges do want CRA to be flexible with their calculations.

I find it hard that CRA would make my gf financialy responsible for my 2 oldest daughters when she has not adopted them. If it is true, why go through the adoption process?

We have not filed yet for CCTB... I might just do what you suggested....

[mom2three]

I cannot comment regarding dealing with the CRA mgb, but one thing you made comment on astounded me and perhaps requires clarification on your part.

You state "I find it hard that the CRA would make my gf financially responsible for my 2 oldest daughters when she has not adopted them. If it is true, why go through the adoption process?"

People adopt children because they love the children and are altruistic. Quite frankly, if I knew of a person who did the financial calculations to determine whether or not to adopt a child, they certainly don't deserve to adopt regardless of the amount of children who need a home in this country.

I can understand the financial reasoning to a point. We are all trying to do the best for our children, and children in our care. But, there comes a point that this goes beyond simple humanity towards others.

If you can clarify your point, that would be most appreciated. And please don't think I am judging you. Far from it. I am merely fascinated by the circumstances.

[mgb]

Hello mom2three,

I'll gladly clirify my statement as I don't want to be misunderstood.

My statement was about financial consideration and had nothing to do about loving and caring for the children. My gf looks after my children as if they were her own. What I am asking is how can CRA make my children a financial responsibility to my gf when she has not adopted them and also because we have a co-habitation agreement which states that we are financialy independant from one another.

I'm not questioning why people adopt kids at all... that was not my reasoning when I posted that answer.

THanks

[Mess]

The CRA doesn't require your GF to buy the groceries or clothes or pay for piano lessons.

What the CRA does is administer benefits and collect taxes and refund according to credits.

The CRA doesn't care if you GF is supporting the kids or not. They don't care in the least bit, this is not part of their criteria. They don't watch who is doing the shopping, they don't even check to see if the kids are really sleeping at your house.

What the CRA does is administer credits and benefits according to family income. You live together, you have a child together, you and your GF are considered "family" for the purposes of any benefits and credits that are applied to your household.

If you become separated, legally, then you cease to have your income combined for the purpose of calculating these credits and benefits. As long as you stay living together, then your incomes are combined for the purpose of calculating the level benefits and the allowable credits, and which return they are allowed to go on.

This is the answer to your question. The CRA isn't making your GF do anything. It has regulations that apply to everyone equally. For simplicity sake, and because they aren't going to come to every home of parents who have children living with them and checking to see who does what, they have this simple way of looking at things that applies to everyone who lives together as a family unit.

Because you keep repeating yourself after several people have actually answered your question, I'm stating it multiple times in different ways. I'm not trying to be annoying.

[mgb]

Mess,

How much knowledge do you have when it comes to co-habitation agreements and CRA? You know it is possible to have to people living together but be financialy independant... Have you researched the tax courts judgements in regards to these? Did you know CRA do agree in some circumstances co-habitation agreements?

My question is why is CCTB's application is so rigid that it will not recognize co-habitation agreements?

If you think I'm repeating myself, I'm simply answering to those that have replied to my posts. Other than NBDad, no one has provided me with any insight on my situation.

[Mess]

I haven't researched tax court judgements, maybe you could do it for me?

I did spend a total of 2 hours on the phone with CRA (over several calls) asking questions about the CTB and the Equivalent to Spouse deduction after I separated so I could learn what I needed to do and what to expect.

The number is 1-800-387-1193, after you call maybe you can post here and tell us what you learned?

As far as living together and being financially independent, my ex and I both worked while we were married and both kept separate accounts. That had no effect on the CRA calulating our CTB according to our combined income, or deciding to force the child care receipts onto the lower income earner's return, even though it was the higher income earner that paid for the child care.

[NBDad]

Co-habitation agreements are irrelevant to CRA. Once you are living common law, they take the household income into account when doing the calculations.

Having a child together qualifies you as common law, period, end of story.

If they are assigning you as a family unit, you have the onus to prove that you and your girlfriend are no longer together to be able to have that decision repealed.

Otherwise, as long as you are living under the same roof, you are considered a "family" for the purpose of CRA determining payment of CCTB/UCCB.

[billiechic]

Your household benefits from having 2 incomes. Regardless of whether you are "separate" or not, the costs of running the household (utilities, heat, rent etc) are about half what you would each pay without the other income. If you can show that you each have your own utility bills, then maybe they would be considered separate households. I suspect that 2 adults sharing a home (and not in a sexual relationship) might also fall under this rule.

Regardless, you each benefit from having a second income contributing to the household, and thus have a lesser need for government money,.