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  • #61
    Originally posted by Janus View Post
    Now, sec 7 should probably be calculated on the after support income, but many poor saps that I have talked to end up getting it calculated on gross income. The above is the reality for most people I talk to. Earn less, get more. A marginal tax/support rate of over 100%.
    Use the after tax cost of daycare, otherwise your numbers are way off.

    However before you do that, there is something insane about your base calculations. 60k gross gives you an after tax of 32k? that is a 51% average tax rate. No, we don't pay that much tax in Canada.

    Your lower earning parent, 35k has 19k after tax? That is a 54% average tax rate, even crazier.

    Taking into account personal deductions, and eligable dependant (one child with each parent) I get this (rounded):

    60k gross; after tax 43.7k
    35k gross; after tax 26.7k

    Difference: 17k in parent A favour.

    section 7 ratio: 65%/35%
    Daycare payment:
    Parent A 12480 (gross) 8112 (after tax) (using average tax rate; marginal would be more accurate and more in parent A's favour but I have to leave for work in a minute.)
    Parent B 6720 (gross) 5846 (after tax.)

    Parent A after tax, after daycare, after support: 30,980
    Parent B after tax, after daycare, after support: 25,462

    Comment


    • #62
      Originally posted by Tayken View Post
      Could you provide the link to the Revenue Canada information you leveraged to calculate the after-tax income?
      Payroll Deductions Online Calculator – Disclaimer

      Obviously I made some assumptions.

      If, for example, either parent earned their income through something other than a salary (eg. dividend income) then that is not considered at all by the support tables. If you earn dividend income, then you really win at family law

      Comment


      • #63
        Originally posted by Mess View Post
        Use the after tax cost of daycare, otherwise your numbers are way off.
        How can you determine the after-tax cost of daycare?

        Comment


        • #64
          Originally posted by Janus View Post
          Payroll Deductions Online Calculator – Disclaimer

          Obviously I made some assumptions.

          If, for example, either parent earned their income through something other than a salary (eg. dividend income) then that is not considered at all by the support tables. If you earn dividend income, then you really win at family law
          I wouldn't put any faith into what you are stating regarding interest/dividend income. What generally happens in these matters is that the court will and impute an income on the party so child support calculations can be applied.

          Happens all the time in matrimonial disputes where by one party has a large asset base and claims that their income as reported on line 150 is what should be used.

          The justice can consider all sources of income to a party to determine CS. It isn't just left to line 150. If you search supporting case law for private business owners etc you can see this applied quite regularly as well.

          Rule 13 requires Full and Frank financial disclosure. A judge has a lot of tools, including imputing income, to insure that the best interests of the children are met financially.

          Presenting an argument that you only make $X as you live off disbursements from an investment of pure cash money is just a fast way to an order imputing income generally.

          Good Luck!
          Tayken

          Comment


          • #65
            Originally posted by Mess View Post
            However before you do that, there is something insane about your base calculations. 60k gross gives you an after tax of 32k? that is a 51% average tax rate. No, we don't pay that much tax in Canada.

            Your lower earning parent, 35k has 19k after tax? That is a 54% average tax rate, even crazier.
            I was seeing a similar pattern to the numbers as well Mess. The tax rates at those income levels are quite odd. Trying to find a more reliable way of producing an after tax number.

            51% on 60k gross is very high.
            54% on 35k gross is exceptionally high.

            Do we even have any income in Canada that hits the 54% rate? (Honest question, not sure have to do some research.)

            Good Luck!
            Tayken

            Comment


            • #66
              Originally posted by involveddad75 View Post
              Incomes are hypotheical

              Parent 'A' earned in 2011: $60000.00
              Parent 'B' earned in 2011: $35000.00
              Based on Table amounts and the following calculations:
              Parent 'A' table amount would be:
              $892 (basic amount for 60000)
              =$892
              Parent 'B' table Amount would be:
              $508 (basic amount for 35,000)
              =$508
              Table amounts are government amounts based on what the average family would spend for room, board, clothing, etc.
              Given our incomes and the amounts we should be spending on our children, the children Child A and Child B have a pool of money each month of $1400 spent on them.
              The guidelines state that if the access is between 40% and 60% then each parent pays the other as if each has sole access to the children.
              Given that the current calculation of the Parent 'A' paying the mother $384 dollars a month which is the difference of the two amounts 892 - 508 roughly equals $384 a month
              This means that Parent 'B' actually has $508 + $384 = $892 to spend on the children, or 63% of the pool, and Parent 'A' actually has $892 - $384 = $508 to spend on the children or 36% of the pool.
              Currently the children live equally with both parents; however their pool of money is not balanced between the homes they live in.
              That means that parent 'A' who must house, feed and clothe the children must do so with less money than what Parent 'B' has to spend.
              Now Parent 'A' is trying to maintain the same standard of living for the children as Parent 'B' has in their home. Parent 'A' has to spend $892 on the children to maintain the same standard of living. Using the calculation and the table amounts that is like paying $892 + $384 = $1276 into child support. That would be an imposed imputed income of $88,600 when Parent 'A's income is actually $60,000 that's an imputed income of $28,600 that Parent 'A' doesn't have.
              The Solution
              I propose the following calculation to balance the children's lives in both homes.
              We take the $1400 and divide by the 50% the children spend in each home.
              That would give each parent $700 to spend on the children's room, board, and clothing.
              Given that amount the payment from Parent 'A' to Parent 'B' would me $892 - $700 = $192 to Parent 'B' each month.
              This would give an equal amount of funds to both parents to help raise the children.
              While maintaining that Parent 'A' given his higher income still pays %63 of the children's costs which is still fair.
              This would allow the children to have the same style of cloths at one house, as they do at the other house. This would benifit the children becuase they wouldn't see a disparagy in standards of living between the homes.
              This is not reasonable.

              Straight offset method assumes parents will spend twice as much on their children in shared custody vs sole. This seems obviously not true.

              Your method 50% of straight offset assumes parents will spend the same on their children in shared custody vs sole. This seems obviously not true.

              A fair method (assuming the CS tables are fair to begin with) is to apply a value somewhere between 50 and 100% of the straight offset.

              This is what makes sense (again assuming that the CS tables are fair) and is the way things should be.

              Why is the straight offset method being used then? I do believe that it is because at first glance it 'feels right' and seems logical to simply subtract the difference between CS table amounts. However, after a very rudimentary review of it, it is clearly not right and is not reasonable. The other factor may be that we live in a society where those that have more, pay disproportionally more. I would love for someone to state a different reason why the straight offset method is being used.

              It may simply be that the straight offset method has a greater effect to balance household income, so that if you have shared custody, forget the CS tables, because the courts simply want to balance NDI in both households - which is a form of SS to be sure.

              This leads to another question. Is it right, or reasonable, for there to be a different NDI in the homes that the kids live equally in? I would say yes. I make more money than my ex, and I feel I should have a higher NDI. It should be her job to apply the CS table amount to the kids and not subsidize her lifestyle. However I feel that ultimately the courts do want to balance NDI, even in the case where there is no entitlement to SS (which is evidenced by SSAG tying SS duration to the children's age).

              Comment


              • #67
                Originally posted by Mess View Post
                Your lower earning parent, 35k has 19k after tax? That is a 54% average tax rate, even crazier.
                46% actually, but of course I did not include any deductions. It does seem high though, why is the calculator spitting that out?

                I took a look at my end-of-year paystub, and income tax taken off was indeed much lower.

                Random sidepoint: About 5% of my salary goes to LTD/EI/CPP, should we be deducting that? I pay for LTD to protect the income stream to my ex, and then I pay recipient support for the money used to buy the LTD to ensure the continuous income stream to my ex . My ex has LTD as well, but it is of course proportionally less. LTD and other income insurance should be paid in before-support dollars I would think.

                Comment


                • #68
                  Originally posted by billm View Post
                  This leads to another question. Is it right, or reasonable, for there to be a different NDI in the homes that the kids live equally in?
                  Nobody really knows why support is paid is a shared custody situation. The usual argument runs something along the lines of "it's the law" or "the judges say so", which is of course a lousy argument. Some say that support is because of "responsibility", but that doesn't address why a payor has to give money to another adult to spend on his own kids, and how that is more responsible than paying for the kids directly. Another argument is that it is designed to address an imbalance in the standard of living between the houses, but of course CS does not look at standard of living unless it is an extreme case.

                  So, to determine if equalizing NDI is reasonable, you have to figure out the point behind support in a shared custody situation first, and that is not as clear as it sounds.

                  Comment


                  • #69
                    Originally posted by Janus View Post
                    Nobody really knows why support is paid is a shared custody situation. The usual argument runs something along the lines of "it's the law" or "the judges say so", which is of course a lousy argument. Some say that support is because of "responsibility", but that doesn't address why a payor has to give money to another adult to spend on his own kids, and how that is more responsible than paying for the kids directly. Another argument is that it is designed to address an imbalance in the standard of living between the houses, but of course CS does not look at standard of living unless it is an extreme case.

                    So, to determine if equalizing NDI is reasonable, you have to figure out the point behind support in a shared custody situation first, and that is not as clear as it sounds.
                    I think this really cuts to the chase. The only justification for Child Support in shared custody situations is to equalize standards of living. I think we all agree that it *is* harmful to the kids to have a disparity in standard of living at the two homes, and I don't have any issue with paying my ex if it elevates her standard of living to match my own.

                    The problem is, the way it is done, the way the "law" makes us do it, so many assumptions are made that in many, many cases the support has the opposite effect -- the higher income earner ends up with a lower standard of living. That certainly is true for me. I think this is the spirit of section 9(c), to give the judge power to look at the *actual* costs each parent has and to equalize things so that there is parity in standard of living. But of course the *actual* standard of living calculations are never done (except in Undue Hardship cases, and from what I hear those are almost NEVER won), and judges tend not to consider section 9(c) anyway.

                    If we really wanted to do what's best for the kids, judges would have to look at standard of living in a case-by-case basis, and part of this would include an assessment of how money is managed in each home, so that a lower standard of living isn't just because of terrible money management! A daunting task.

                    However, if the CS guidelines put this issue at the forefront, and stated that the purpose of CS is to equalize the standard of living as experienced by the kids in both homes, then probably many couples would be able to negotiate something more fair without going through the courts. Instead, the current CS guidelines give the lower-income earner a heightened sense of entitlement that creates resentment and *real* disparity in standard of living.

                    Comment


                    • #70
                      Originally posted by rthombe View Post
                      I think this really cuts to the chase. The only justification for Child Support in shared custody situations is to equalize standards of living. I think we all agree that it *is* harmful to the kids to have a disparity in standard of living at the two homes, and I don't have any issue with paying my ex if it elevates her standard of living to match my own.
                      I should add, there is a legitimate case for SS, of course. But as pointed out by others here, we shouldn't force CS to *become* a form of SS -- they are separate things, with separate justifications. This becomes especially relevant when people get remarried and there really is no case for SS anymore.

                      Comment


                      • #71
                        I agree with rthombe. I don't think it's rocket science to see the unfairness. The main point here for me is that there is absolutely no incentive for either parent to strive for better wages or promotion. It's just the opposite incentive, in fact. If either parent so chose to live that way and with their conscience. It does seem like masked SS. I have recently been wondering why on average, my higher earning buddies have chosen to be the "weekend dad" over 50/50 shared, but now I think I'm beginning to see the trade-off. They seem to choose to pay the full table amount for the freedom to roam as the want, and the receiving spouse actually ends up working harder for that money. It seems more fair to do the weekend parent than to go with the "50/50" shared arrangement. In the end, as a caring parent, I think it comes down to soldering up and taking the "unfair hit" for your kids, providing you the opportunity to instil righteousness into their way of thinking as well as appreciation for still knowing how to enjoy life on less, despite the ridiculous unfairness forced upon us. One thing I know in my heart, is that karma has no restrictions, and the non-believers can laugh all they want, it still won't stop it from coming. Lucky for me, I was raised with very little beyond my basic needs. Because of this, I know of no such feeling of superficial materialistic lifestyle feelings. However, I do know how to appreciate and enjoy the simpler things in life and I have taught that to my children. You know, the ones that play hours with the box that the expensive toy came in? The only way I can bring myself to terms to deal with this type of unfairness, is to remind myself that I'm not living in a country where my basic human rights have been stripped from me, nor my family or friends slain senselessly. And I also remind myself that this is the length I must go to to be my children's soldier and take this grenade for them. Someday they may see it, or they may not. Hopefully, I will see them blossom into brilliant and upstanding citizen's of whom I will be proud to take ownership of. Most important of all, I hope to see individuals who truly grasp the greatness of the the simple things in life and effortlessly find peace and happiness in their hearts as a result.

                        Comment


                        • #72
                          Originally posted by Janus View Post
                          If, for example, either parent earned their income through something other than a salary (eg. dividend income) then that is not considered at all by the support tables. If you earn dividend income, then you really win at family law
                          Technically no, because CS Guidelines include a provision to gross-up the income for parents who are paying significantly lower than usual taxes for some reason.

                          http://www.justice.gc.ca/eng/rp-pr/f...ide/info1.html
                          Last edited by dinkyface; 08-12-2014, 09:58 PM.

                          Comment


                          • #73
                            Firstly, those dads underestimate losing a father will have on their kids. What if doubled the chance your kids becomes a high school drop out?

                            Secondly, you are forgetting about 2 very important things.
                            a) Family Tax Benefits, In Quebec poor single mothers with full custody and below 20k of income clear 1200$/month in family benefits.

                            b) Equivalent to spouse tax deduction is worth 3000$/year or more depending for a decent wage earner.

                            In shared custody, I think it is conceivable that the higher earner can actually end up not paying anything out of pocket.

                            Comment


                            • #74
                              Links17, it's funny how the "moral" issue isn't considered so much when the higher earning parent is legally penalized for trying to better their career or financial stability, in turn, effectively benefiting the other parent more of a percentage (according to calculations I've been seeing in this thread) for every additional dollar they make, yet when the higher earning exercises their legally correct arrangement of joint custody and access every other weekend, the moral issue comes significantly into play. I think the kids suffer from either situation, however I feel the later is "more" fair. In the first arrangement, the higher earner is effectively more stressed out over the inequality in consideration the 50/50 of care provided, and of course any type of stress can easily leech into family morale. I suspect the higher earners who have chosen the every-second-weekend are much less stressed because they don't feel so much like they are paying the other parent to hire themselves as the baby sitter every other week, effectively improving the quality of the lesser amount of time they get to spend with them. It shouldn't have to be so complicated. There should be valid incentive for both parent's to strive to have the best occupation they can without having the other gouging from their pockets of earnings they've strategically and righteously accomplished without any assistance from the other. The present set-off calculation encourages both parents to either keep the bar low or make it lower. This is not right. It's distasteful of a society. It's shameful. Two morally correct parents will likely agree to either split the set-off amount or not bother at all and simply accept that they'll each have a week to themselves and a week of caring for the kids, thus agreeing that the calculation by law is flawed and mutually by-pass it altogether.

                              Comment


                              • #75
                                karma_fan, I like the way you bring the morality and stress into the argument. It's an aspect I tend to overlook when I get lost in the numbers.

                                There is no doubt that when you feel -- as I do -- that my high support contributes to maintaining a higher standard of living for my ex and her family than I enjoy myself, that it creates all kinds of stress, and I bet you're right ... if I didn't have 50/50, I wouldn't be so concerned with it. And of course that stress and tension affects the kids, and the bottom line of any CS discussion should be what's in their best interest.

                                FWIW: since I originally posted this thread long, long ago, I got my ex talking. By focusing on the kids, we came up with a formula that looked at our *real* expenses, and tried to assign a portion of those expenses to the children.

                                For example, taking our real expenses for rent, transportation, food, clothing, medical etc. etc. we arrived at a figure that says it costs $X to raise the kids at her home, and $Y to raise the kids at my home. So we consider $(X+Y) to be what we, as their parents, need to ensure we contribute jointly -- anything less would be unfair to them.

                                We then take that $(X+Y) amount and divide it up proportionately with our relative incomes, so that I'm responsible for, say, 70% and she's responsible for 30%. As one would expect, 70% of $(X+Y) is greater than $X, and 30% of ($X+Y) is less than $Y; so I transfer my excess to her as CS, so that she can spend the whole $Y it takes to support the kids at her house, and I have no more than $X to spend to support the kids at my house.

                                Now, figuring out $X and $Y is difficult and no doubt imperfect, but we were able to agree on the formula. It takes into account any potential "standard of living" differences, so that support will only be calculated on realistic, agreed-upon standard payments for things like rent and entertainment etc.

                                Here's the interesting thing. When calculating this way, we end up with almost the *exact* CS payment as we would have had if we had just taken the half-offset I originally proposed!

                                Still, I like the way we do it now, as it focuses on actual expenses and not entitlements or anything like that.

                                Comment

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