Post-secondary, 1/3, 1/3, 1/3 calculations

[LovingDad1234]

Thanks for sharing this info

[rockscan]

This thread is really helpful. Is it well-known knowledge that any RESPs opened by extended family "belongs" to child(ren)? My ex is of the opinion that the RESP opened by her family members is "her" contribution for when the time comes. I anticipate significant pushback....so is there anywhere in law I can point to? Or case law?

There’s no caselaw. I searched, my husband’s lawyer searched and another poster who is in court searched. The problem is that most cases that involve an RESP get settled before trial.

Definitely open your own and get your deposits in immediately at the beginning of the year. If you both have an RESP, the first past the post gets the grant funds for the year. That money becomes the property of person who deposited it first.

Technically though, if your ex opened an RESP after separation and family put money in, she could argue it doesn’t come off the top as it is “her” account it just doesn’t matter who put it in. The caveat is that is she used the whole amount to fund the costs then there are no “out of pocket” expenses to be shared.


Sent from my iPhone using Tapatalk

[rockscan]

There are other factors too. Depending on the province, some offer additional grants to kids from low income families so if kid is using mom’s income, the amount could be higher which comes off the top. For instance, kid gets $5000 in grants which is subtracted from $12,000 in expenses.

There is nothing you can do to force her to work. You could try to have an income imputed driving the cost down but that would require a costly fight.

I suggest opening an RESP if possibly and putting as much money in it as you can. That way you get the government grant funds which add to your portion paid.

[Alpinist]

My partner is working through postsecondary wording as well right now. His ex has made $20,000 per year for 3 out of the past 4 years. She seems to bounce around job wise and avoid working. She just proposed a post secondary clause in their SA where the kids income/bursaries etc is deducted first and the remainder is split "according to income". I think that ordinarily that is a good idea... But what about the instance where you know one payor is making hardly any wage? I know there is no way to force her to work but she will be essentially contributing nothing toward their education then?

[Alpinist]

Great - that is very helpful, thank you!

[rockscan]

There is no residence fee but you still split the school costs (tuition, books, equipment and relevant transportation fees) 1/3 to each.

Technically it is proportionate to income if you have differing incomes that aren’t close to 50/50. For instance one parent makes 100 grand and one makes 20 grand. Then it’s 1/3 to the child and the remaining 1/2 split proportionate to income.

You also subtract any OSAP grants provided before splitting it and you share the net cost (less tax deductions).


Sent from my iPhone using Tapatalk

[Alpinist]

Question, if the child is living with the parent(s) while attending a postsecondary school for studies, is it still 1/3, 1/3, 1/3? Or does this change because there is now child support and less fees (residence, etc). Would it be just child support and treat the fees as Section 7? Sorry i am just confused on how this works.

[Star7ontario]

Heres the case: http://www.canlii.org/en/on/onca/doc...&resultIndex=6

If you also do a search of post secondary in your province you will get an idea of what is paid.

Thank you!


Sent from my iPhone using Tapatalk

[rockscan]

Heres the case: http://www.canlii.org/en/on/onca/doc...&resultIndex=6

If you also do a search of post secondary in your province you will get an idea of what is paid.

[Star7ontario]

Youre probably getting better grades the second time though! Thats what I found!

Residence is only applicable if its necessary. You wont find case law on that specifically. The only law I found was the Lewi v Lewi case where kid could have stayed home but didnt and he was on the hook for a higher share of costs. For you, if residence is much more expensive than usual then its pretty easy to say no. If kid really wants to do it he will need to find the money.

Im not a lawyer though but you have to ask yourself if its worth at least $5000 in legal fees to fight it. Judges use the Lewi case for kids share of costs....

I've looked for this case and I don't see it. If you can provide the date. I see three for this name combo but none say anyone was on the hook for more. When you have time! Thank you!


Sent from my iPhone using Tapatalk

[Star7ontario]

RESPs

RESPs are broken down as follows:

RESP opened by grandparent, aunts, uncles, friends, relatives of the student are eligible as the student’s portion of the expense.

RESP opened by parents DURING marriage are eligible for the parents’ portion of the expense or may be transferred to the student.

RESP opened by parents FOLLOWING DIVORCE are eligible for that parents’ portion of the expense. For instance, mom opens RESP six months after divorce is finalized. This money is used for her share of the child’s expenses.

Grant money within the RESP that is provided by the government is withdrawn according to the eligibility above. It is not automatically transferred to the student.

Net cost
The net cost of the expense is considered after all tax deductions have been applied. Tuition is an eligible expense under the Canada Revenue Agency.
Moving expenses are eligible expenses under the Canada Revenue Agency.

Tuition is calculated according to the tax reduction. For instance, if tuition costs are $7000 and the tax benefit awarded for it is $2000, the net cost of tuition calculated in the split is $5000.

How to calculate the costs
Calculate the sum of the following:
• Tuition—either via a lawyer calculation or by completing a “dummy” tax form for the recipient parent. (Full cost of tuition less provincial grant less tax benefit).
• Books
• Residence/living expense fees (for a child living away from home)
• Equipment
• Transportation
• Food
• Additional eligible expenses not listed but considered eligible

Total cost of education divided by 3

1/3 of the cost is attributed to the child and paid via employment income, bursaries, federal grants, gifts from others, RESP from family members other than parents.

2/3 of the cost split proportionate to parent’s income similar to S7.

Example:
Total cost of education expenses--$15,000
1/3 cost attributed to child--$5000
$10,000 to be split proportionate to income—father’s share = 65% $10,000 x .65 = $6500

I'm sure I read in a case ruling that bursaries and grants counted toward the net cost, then each parent and the child were responsible for 1/3 at which time then the child could use loans and their savings as needed for their portion. This says the bursaries and grants go towards the student's portion.


Sent from my iPhone using Tapatalk

[stripes]

Then (as I understand it), it's your money (not his or "ours") and you can use it all towards your share of university costs (75/25 or whatever). It doesn't have to be used up first, and then you and Dad split the remainder. (The exception is the amount of the annual federal grant paid into RESPs - that part isn't your money and so it would be used to reduce the costs of university that you and Dad split.

[roxyroller71]

Yes, and just my name.

[rockscan]

Is your name on it?

[roxyroller71]

I just have a question in regards to the RESP.
I (mom) opened one when my son was 3 months old, I paid into it , as my ex didn't want any part of assisting with it. We were together at this time.
We split just before my son's 1st birthday and I continued with the RESP.

My mom (my sons grandparent) actually automatically deposits money into my bank account of 200 bucks and it then gets moved into the RESP.
So now there is a nice chunk in there to help with school when my son needs it.

Ex fights on every issue. But there has been nothing addressed about RESP's or post secondary education. At one point there was mention that my ex wanted education addressed by RESP money first being spent then my ex and I split the remainder by 50/50 (or really 75/25, if that's the case). this was ignored and dropped at that time.

Am I going to be blind sided by this? We haven't even reached the point of future education.

Any thoughts?