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

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Old 03-28-2013, 12:41 AM
Desperate_Dad Desperate_Dad is offline
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Default Divorcemate Fraud - Disability Payments

Disclaimer - The Divorcemate explanations presented in this post are over a year old and they might have changed some of them. However I have no reason to believe they have gained a significant amount of intelligence in one year.

This is what Divorcemate does not want you to see. These are actual explanations to lawyers of how to input information on Divorcemate in the help screen of the program itself.

CPP Retirement benefit

Input the party's total annual Canada Pension Plan (CPP) Retirement benefit (T4A(P) slip, Box 14).
According to the CSG, annual income is determined using Line 150 ("Total income") of the T1 General form, adjusted in accordance with Schedule III and ss. 17, 18 and 19 of the CSG. This is commonly referred to as "Guidelines Income".
Note that the SSAG use the same definition of annual income as under the CSG, with some exceptions.
See the help under "Employment Income" regarding Guidelines Income caps under the CSG and ceilings, floors, and floor exceptions under the SSAG.
TIP: There is a built-in conversion feature. See the help under "Employment Income".
 
CPP Disability benefit

Input the party's total annual Canada Pension Plan (CPP) disability benefit (T1, Line 152; T4A(P) slip, Box 16).
According to the CSG, annual income is determined using Line 150 ("Total income") of the T1 General form, adjusted in accordance with Schedule III and ss. 17, 18 and 19 of the CSG. This is commonly referred to as "Guidelines Income".
Note that the SSAG use the same definition of annual income as under the CSG, with some exceptions.
See the help under "Employment Income" regarding Guidelines Income caps under the CSG and ceilings, floors, and floor exceptions under the SSAG.
TIP: There is a built-in conversion feature. See the help under "Employment Income".

Disability benefits (non-taxable)

Input annual amounts of non-taxable disability benefits that the party receives.
Note that the software will automatically gross up this income in the determination of the party's Guidelines Income and child and/or spousal support. In other words, the software will determine how much gross employment income the party would have to earn at his/her current marginal income tax rate (including CPP and EI premiums if specified by you), in order to have this non-taxable disability benefits income. If you do not want this income grossed up, input it instead under "Other non-taxable income (no gross up)".
Certain non-taxable income on your tax return is added to income with the effect of increasing net income for the claiming of refundable and non-refundable credits or for assessing eligibility/entitlement for other benefits/credits. The software is unable to ascertain the effect of any non-taxable disability benefits input in this field on a person's eligibility/entitlement to benefits/credits. It is up to you to discern the effect of any non-taxable income on the party's eligibility/entitlement to all benefits/credits. You may wish to contact your family law accounting professional if "disability benefits (non-taxable)" is an issue.
According to the CSG, annual income is determined using Line 150 ("Total income") of the T1 General form, adjusted in accordance with Schedule III and ss. 17, 18 and 19 of the CSG. This is commonly referred to as "Guidelines Income".
Note that the SSAG use the same definition of annual income as under the CSG, with some exceptions.
See the help under "Employment Income" regarding Guidelines Income caps under the CSG and ceilings, floors, and floor exceptions under the SSAG.
TIP: There is a built-in conversion feature. See the help under "Employment Income".

Disability amount (transfer from dependant)

Input the annual disability amount transferred to the party from a dependant (T1, Sch.1, Line 318).

The party may claim all or part of a dependant's disability amount (T1, Sch.1, Line 316) if the dependant was resident in Canada at any time during the taxation year and was dependant on the party for all or some of the basic necessities of life. In addition, one of the following situations must apply:
    • the party claimed an amount on Line 305 for that dependant (or could have if the party did not have a spouse and the dependant had no income);
    • the dependant is the party or spouse's parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, or nephew, and the party claimed an amount on Line 306 or 315 for that dependant, or could have if the dependant had no income and had been 18 years or older in the taxation year.
Note that this credit cannot be claimed if the dependant's spouse is already claiming the disability amount. More than one person can claim this credit, provided that the total claimed for the dependant does not exceed the maximum allowable amount for the dependant.


My comments:

Before I comment on the explanations above, I want to mention that there is a field beside the Applicant's, Respondent's and children's names called "Disabled?" and gives a lawyer two options in a dropdown box which are "Yes" or "No". This is a very dangerous option because it is misleading. If you click "Yes" to this option, it gives that person the Disability Tax Credit which makes 8,000 of their income exempt from tax. Most people who are disabled don't get the Disability Tax Credit and if yes is entered when they don't get it, then it can result in the program thinking that their income after tax is higher than it really is.

My blog post from May 23, 2010 on Divorcemate's CPP Retirement Benefit can be found here

http://financeguy1.blogspot.ca/2010/05/income-section-cpp-retirement-benefit.html

My blog post from May 23, 2010 on Divorcemate's CPP Disability Benefit can be found here

http://financeguy1.blogspot.ca/2010/05/income-section-cpp-disability-benefit.html

Notice how Divorcemate's explanation of CPP Retirement Benefit has changed since I posted that blog. It used to say T4A(P) slip Box 20 and now it says T4A(P) slip Box 14. This changed a few months after I posted my blog. When it said Box 20, it had the effect of duplicating a disabled person's CPP Disability Benefit. Why? Because Box 20 includes all retirement benefits including CPP Disability. So if you did what Divorcemate said prior to them correcting it, Disability Payments would be counted once under CPP Retirement Benefit and once under CPP Disability Benefit. Would have been nice of them to thank me for helping them correct their program after they told me it was correct but criminals don't do that.

Lets move on to Disability Payments Non Taxable. Just about everything they say here is stupid and wrong. The most common benefit appearing here would be a person who is receiving CPP disability payments who has children. The amount is approximately 230/month per child. Until the child turns 18, the benefit is paid to the parent. Once the child turns 18, it is paid to the child up to age 25 as long as the child is in school. You don't need to gross this income up for tax, CPP, EI as this income is not subject to tax, CPP or EI and won't appear on a tax return. As for it affecting government benefits, you can check the government benefits to determine if non taxable disability payments income affects government benefits. To my knowledge, non taxable disability benefits do not affect receipt of government benefits but I confess I am not certain if that is true for all government benefits.

Family Law Accounting Professional???? Does such a beast exist?

I am aware that the disability tax credit of a child etc can be transferred to a parent. This would have the effect of reducing the parents tax liability. If this is an issue for you, make sure the amount transferred is entered in this field.

I hope this post helps people.


Please feel free to comment to Divorcemate directly about any issue that I write about. Here is the link to their contact list

http://www.divorcemate.com/contact.aspx

If enough people email them, maybe they will get the message. By the way they know me and can't stand me because I am exposing them as the incompetents that they are.

In a response to one of my posts, someone suggested contacting your local media. I say go for it - contact Divorcemate, the local media, your MP and your MPP. The more people complain about this Family Court disaster, the quicker we can get it fixed. Maybe they won't respond to one person but if thousands complain, it will get their attention.
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