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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1  
Old 08-22-2014, 10:48 AM
Helpless Helpless is offline
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Default Daycare Costs and Seperation Agreement

Good morning folks,

I have a question about child care costs.

A bit about how it unraveled to today's situation. We separated in 2010, prior to that our S1 was in daycare full-time. After separating, we chose to keep our son in daycare and I applied for a subvention, to help with the costs since I was then a full time student, I was covered 100% and back then had sole custody and primary caregiver. Ex never brought S1 to daycare on Mondays since he was off work and always had him on Mondays. I still needed to declare to social services that S1 wasn't at daycare on Mondays (their policy is that they only pay for the days the child attends.) But daycare demands that they be paid for the full week so we made the decision to pay each our month or on a month about basis. So about 4-5 Mondays of full day child care fees.

At some point ex decided to serve me for shared custody and that was fine. In court they appointed an OCL and she in turn gave her recommendations. In our agreement it states that ex is to pay 135$ per month on a month about basis of child care fees so every second month. (This is what ex told OCL he was paying) Since we agreed upon shared custody, I in turn needed to advise social services since I'm the one who needs the support, Doing so, the worker advised me that he was now responsible for paying his months of child care, and that I was covered for my months. I signed the agreement not thinking about the policies and actual costs of childcare.

Last year he refused to pay his full month of child care fees totaling up to 690$. The owners called me demanding that I pay the outstanding amount of 345$ and threatning that our son would not have his place reserved for September if I didn't come through with payment. Still a full-time student, I knew that I needed the services and paid the sum. I brought my court agreement to them and they agreed that the 135$ amount did not make any sense, no child care provider charges that amount for a full month of services. I also advised him that he should apply for a child care subvention but he stated that he had tried and since he was a business owner was not eligible for any help on costs.

Lastly the same story has happened this year, I was responsible for the month of June and August and he was responsible for the month of July. The owners billed him in the middle of July for the sum of 690$ and he gave them 200$ instead.

In May I spoke to him about the fees for summer and even offered him 200$ to help with costs for his month, he refused the help. Owners had a lengthy discussion with him and asked multiple times if he was ok with paying his month and if he needed the services, he replied to all of us that he did.

My questions are, am I on the hook for the remaining balance? Is he breaching our agreement? Has anyone else dealt with bogus things such as this in their agreement due to OCL recommendations?

Sorry for the lengthy post and thanks in advance for your feedback!
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Old 08-22-2014, 10:57 AM
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Childcare is an S7 expense and should be proportionately paid according to incomes

Daycare $690
Your Income $25,000 (Made up numbers)
His Income $50,000

$50,000 + $25,000 = $75,000

$50,000 / $75,000 = 66.6%
$25,000 / $75,000 = 33.3%

66.6% of $690 = $459.54
33.3% of $690 = $229.76

So his cost for daycare is $459.54
Your cost is $229.76

I'm not sure how subsidies work in a shared custody situation.
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Old 08-22-2014, 11:07 AM
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Rioe Rioe is offline
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What you have there is called a non-standard agreement, which can lead to huge messes with payments, as you are finding out. Your agreement was also based on a different child access schedule, from the sounds of it. And not to mention that your child is now school-age and presumably has different child care requirements.

I'd suggest figuring out a way to change it to a standard agreement, which is that the parents share the child care fees proportional to their incomes. Find out what the total cost for child care is, minus your subsidy and tax break, and then exchange income information and figure out what each of you should pay. You pay the child care facility, and then get him to repay you his proportion on a monthly basis. That way, you know the care provider gets paid so you don't lose your spot, and if he refuses to reimburse you, you can have it enforced by FRO or take him to court.

Right now, your agreement says he pays $135 every other month. If that is no longer his fair share of the current cost, you need the agreement updated.
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Old 08-22-2014, 11:07 AM
Helpless Helpless is offline
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It clearly states in our agreement that he is to pay 135$ on a month about basis, and that's his argument. He's a tattoo shop owner and has not declared his income in any way. A salary was implemented on him.
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Old 08-22-2014, 11:28 AM
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Quote:
Originally Posted by Helpless View Post
It clearly states in our agreement that he is to pay 135$ on a month about basis, and that's his argument. He's a tattoo shop owner and has not declared his income in any way. A salary was implemented on him.
You can then use his imputed income to determine his percentage.

Doesn't sound like he's to willing to pay more so it might take a trip to court unfortunately.
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Old 08-25-2014, 01:37 PM
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Tayken Tayken is offline
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Quote:
Originally Posted by FB_ View Post
Childcare is an S7 expense and should be proportionately paid according to incomes

Daycare $690
Your Income $25,000 (Made up numbers)
His Income $50,000

$50,000 + $25,000 = $75,000

$50,000 / $75,000 = 66.6%
$25,000 / $75,000 = 33.3%

66.6% of $690 = $459.54
33.3% of $690 = $229.76

So his cost for daycare is $459.54
Your cost is $229.76

I'm not sure how subsidies work in a shared custody situation.
Excellent stuff.
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Old 08-25-2014, 04:24 PM
dad2bandm dad2bandm is offline
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FB_ summed it up nicely for you.
That is how you both should be paying. It would be very "easy" to have this ordered, if you were to go to court about this.

I don't understand the "alternating" payment scheme you guys setup (even if suggested by OCL). You both need child care each month, every month, so why not just split per month, instead of alternating?
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Old 08-25-2014, 04:28 PM
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Quote:
Originally Posted by Rioe View Post
What you have there is called a non-standard agreement, which can lead to huge messes with payments, as you are finding out. Your agreement was also based on a different child access schedule, from the sounds of it. And not to mention that your child is now school-age and presumably has different child care requirements.

I'd suggest figuring out a way to change it to a standard agreement, which is that the parents share the child care fees proportional to their incomes. Find out what the total cost for child care is, minus your subsidy and tax break, and then exchange income information and figure out what each of you should pay. You pay the child care facility, and then get him to repay you his proportion on a monthly basis. That way, you know the care provider gets paid so you don't lose your spot, and if he refuses to reimburse you, you can have it enforced by FRO or take him to court.

Right now, your agreement says he pays $135 every other month. If that is no longer his fair share of the current cost, you need the agreement updated.
^^ Yes. If he is paying at least $135 each month, he is upholding his end of the agreement. It is the agreement that's the problem right now.

Send him a letter saying that you would like to update your agreement. Propose that you each pay a share of the child care costs based on the ratio of your incomes, as FB_ described in his post above. This is the normal way of doing things. (When you are calculating how much each of you should pay, don't forget to deduct any subsidy that you receive from the total cost of the child care. For instance, if child care costs $800 per month and you get $150 per month in subsidy, then you and your ex should be splitting $650 per month between the two of you). You should use line 150 (total taxable income) of your tax return and your ex's tax return to calculate the ratio.

Once you figure out how much each of you should be paying, it's easiest if you each pay the provider separately. That way, you can each get a separate tax receipt and claim the amount you paid on your taxes. However, if he's not reliable about paying the provider, you may have to pay it all yourself, then have him reimburse you you share.

If he's not agreeable to updating the agreement, you may need to go to court to change it. Others can advise you as to how to do this.
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Old 08-29-2014, 01:21 PM
OrleansLawyer OrleansLawyer is offline
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Quote:
I'm not sure how subsidies work in a shared custody situation.
Subsidy is taken off the total cost; the expense to be shared is the net cost (gross cost minus subsidy equals net).

Some months, if the subsidy covers everything, that means there is no expense. Others, if there is no subsidy, then the whole lot is shared.
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