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Benefit entitlements in cases of shared custody

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  • Benefit entitlements in cases of shared custody

    My spouse and I came across some interesting changes to tax law which starts next year.

    Benefit entitlements in cases of shared custody

    The CRA is moving to share eligibility for parents that have joint custody with 50/50 shared access. Eligibility will rotate between the parents on a 6 months rotation and includes CTB, GST/HST etc.

  • #2
    Whew one less thing to nitpick about in the separation agreement.

    "Over the course of the year, you will receive the same amount as you would under the six-month rotational schedule."

    The way I read the page though it seems that you get the credits all year, on a divided basis - it says people who are now on a six-month rotation can be eligible for the new system. I am still not clear though on whose income it is based on. The higher earner's I presume and then split?
    Last edited by gumby; 08-27-2010, 05:11 PM. Reason: addition


    • #3
      I had predicted this months ago due to some "insider" information.

      My understanding is that they use the current instead of X/6 months you get 1/2 X / 12 months.

      The total amount you receive does not change, it's just spread out over the whole year. It makes things a bit more stable and predictable.


      • #4
        3. How will my benefits be calculated as a shared-custody parent?
        Your benefits will be calculated as if the child was your eligible dependant and you will be paid 50% of the benefits associated with the child.
        It is the same situation as now, you will be calculated as though you were the only parent/income, then that amount is split in half. Instead of receiving it over 6 months you will receive cheques half the size for 12 months.


        • #5
          Sorry I still don't understand. They base it on a different income amount for each six month period?


          • #6
            The CRA will look at your CTB and related benefits entitlement as if each parent were the primary caregiver based on that parent's income and pay half that amount to each parent each month of the year.

            This differs from the current system in that in shared parenting arrangements the CRA currently pays the full amount per month to each parent but only for six months of the year e.g. dad gets it Jan-Jun, mom gets it Jul-Dec.

            The total benefit entitlement to each parent will remain the same, it just smooths the payment so that each parent receives a cheque each month, rather than six months on and six months off.

            Presumably this will make household budgeting and finances smoother vs the current method, which is a little "feast or famine" oriented.

            Thanks for bringing this change to my attention Pharah. I'm an income tax accountant and this was news to me.


            • #7
              That's great - we were going to do that anyways. For some reason his lawyer felt the need to put it in a letter that we would alternate years - no need to do that now.


              • #8
                Gumby you should double check that, it was probably the equivalent to spouse credit, that should alternate years.


                • #9
                  Originally posted by Mess View Post
                  equivalent to spouse credit...
         called "amount for eligible dependant" by the CRA.


                  • #10

                    I was wondering if this would affect the 'amount for eligible dependent'. This would mean that both parents will receive a tax credit for their child, that is good news.

                    On the other hand, how does this affect what you claim on your TD1 (tax form submitted to HR)? For what I gather, this means that neither parent should be claim a dependent on the TD1, otherwise they will be paying a lot more in tax next year.


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