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  • Refusing daycare subsidy to penalize ex?

    Asking on behalf of a friend...

    Mom fought long and hard to get subsidized daycare spots for two kids. Both her and ex husband make low income, and thus the subsidy will help cover the daycare expenses so that they can go to work and live.

    They have 50/50 shared custody. The subsidy office thus has 2 files, one for each of them. Each parent and the amount of their subsidy is tracked separately. On her weeks, she gets the bill for her share, and same on his weeks.

    Sounds pretty awesome and fair. So far.

    Now, we received notice of two things.

    1. He has refused to cooperate with the subsidy office, accept the subsidy or sign the paperwork to receive the discounted/free daycare.

    2. He has given notice that he wants to move in with his new girlfriend. Based on what we've heard this may disqualify him from subsidy anyways.

    So here's my question.

    The mom lives on low income and qualifies for full subsidy on her weeks so she can go to work to pay her rent and bills. If the Dad does not qualify or cooperate with subsidy office, and he must pay the full daycare cost on his weeks, can he turn around submit those costs to the Mom as a section 7 childcare expense and force her to pay anyways?

  • #2
    I'm not sure but my understanding is that she can get a letter from subsidy saying he isn't covered because he isn't cooperating. As long as everything is documented then that's all that matters. She can show her daycare letter to lawyer etc saying this is how much she pays for 50% of the daycare. That she qualified and that his lack of cooperation is not her problem. He had his chance, he didn't go for it!

    Comment


    • #3
      Yep, what he said. Status quo is that Mom is responsible for childcare on her weeks, Dad on his. I am assuming if Dad no longer wished to use the childcare provider, that Mom would not be affected at all?

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      • #4
        You can keep your dayccare spot and he would be "forced" to stay at that daycare, it not likely you can use that daycare for 50% of the time... Just keep your paper trail!! :O)

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        • #5
          Originally posted by cmacdonald77 View Post
          You can keep your dayccare spot and he would be "forced" to stay at that daycare, it not likely you can use that daycare for 50% of the time... Just keep your paper trail!! :O)
          Rare that a daycare will take a child 50% of the time unless you pay 100% of the costs. The daycare probably won't care that the child isn't there so long as the full time enrollment cost is paid. Then the real question is... Why pay for something you don't use?

          Good Luck!
          Tayken

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          • #6
            Depending on the financial circumstances, the subsidy may cover over 80% of the cost. Paying for the extra half at a subsidized rate is far cheaper than paying for half the time at a full rate.

            Daycares have to pay staff, insurance, rent and utilities whether the child is there or not. The cost is not by-the-week, it is by-the-month. I don't know of any parents who have an alternating monthly access schedule, so I can't see how one would pay half the daycare rate in any case. The only alternative is casual unlicensed babysitting which wouldn't be qualified for a subsidy.

            A proper daycare with educated staff is Early Childhood Education; pre-school, not babysitting. This is the most expensive care, it's the most beneficial for the kids, and it's the care most likely to be subsidized.

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            • #7
              I totally agree with the "why pay when it's not being used" but how do you fight that? We don't need daycare but have to pay for it because she needs it, even though she only uses it for 5-10 minutes on any given day and she only has to pay 35% of the daycare cost... Is there a way to fight this, and has anyone ever "won" the battle???

              Comment


              • #8
                Originally posted by cmacdonald77 View Post
                I totally agree with the "why pay when it's not being used" but how do you fight that? We don't need daycare but have to pay for it because she needs it, even though she only uses it for 5-10 minutes on any given day and she only has to pay 35% of the daycare cost... Is there a way to fight this, and has anyone ever "won" the battle???
                Family Law is not a "win or lose" battle and shouldn't be viewed that way. Problem resolution should be the goal and not "war". Always keep that in mind.

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                • #9
                  So did anyone answer my question?

                  Can the Dad turn around and claim section 7 child care expenses to the Mom for the daycare because her 50% of the daycare time is covered by subsidy, and his would not be?

                  Full example:

                  Daycare cost $1000 per month.
                  The municipality has files for each parent (week on/week off).
                  Week 1: Mom's daycare cost $250. This is 100% covered by subsidy.
                  Week 2: Dad's daycare cost $250. Dad makes too much money, pays $250.
                  Week 3: Same as week 1.
                  Week 4: Same as week 2.

                  So, end of the month:

                  Mom was responsible for $500 and it has been covered by the subsidy.
                  Dad had to pay $500 out of pocket since his weeks aren't subsidized.
                  Can Dad submit this $500 to mom as section 7 to be paid in proportion of income?

                  In the end this would be making Mom (who has far less income) responsible for much more than 50% of the daycare expenses.

                  The other way to look at it as Mom has covered 100% of the daycare expenses for her custody.

                  What would the law say? What could be put into a separation agreement to protect Mom from essentially being penalized for being low income and having subsidy?

                  Comment


                  • #10
                    Childcare would be a section 7 expense and the father should seek the mother's share.

                    The share would be after tax relief. Daycare would be tax deductable for the father (you state he doesn't need it but CRA does not keep track of your days and hours worked.) Assuming he is at least at a 30% tax bracket, the daycare costs a net $350. Depending on their respective incomes, she would pay a proportionate share, I'm just going to throw numbers in the air, let's say their incomes are 70/30, she would pay $105. Dad thus pays $245 net.

                    Keep in mind that if the daycare were not subsidized, or if she was getting day-to-day babysitting for the 2 weeks per month, Dad's share would be 70% of $500, or $350.

                    Of course these are just my made up numbers but I would bet the real numbers are proportionate. Dad is better off paying the two weeks of daycare. If it is a licensed daycare with ECE teachers, the child is benefiting from pre-school. Nothing wrong with keep the child home as well, but it is a learning environment and the children get to learn to socialize in groups. Both of my children benefitted tremendously.

                    Comment


                    • #11
                      Originally posted by winterwolf7 View Post
                      So did anyone answer my question?

                      Can the Dad turn around and claim section 7 child care expenses to the Mom for the daycare because her 50% of the daycare time is covered by subsidy, and his would not be?

                      Full example:

                      Daycare cost $1000 per month.
                      The municipality has files for each parent (week on/week off).
                      Week 1: Mom's daycare cost $250. This is 100% covered by subsidy.
                      Week 2: Dad's daycare cost $250. Dad makes too much money, pays $250.
                      Week 3: Same as week 1.
                      Week 4: Same as week 2.

                      So, end of the month:

                      Mom was responsible for $500 and it has been covered by the subsidy.
                      Dad had to pay $500 out of pocket since his weeks aren't subsidized.
                      Can Dad submit this $500 to mom as section 7 to be paid in proportion of income?

                      In the end this would be making Mom (who has far less income) responsible for much more than 50% of the daycare expenses.

                      The other way to look at it as Mom has covered 100% of the daycare expenses for her custody.

                      What would the law say? What could be put into a separation agreement to protect Mom from essentially being penalized for being low income and having subsidy?
                      to me any daycare costs should be figured out after all subsidies are taken off the total amount. Mom has not covered her 100% of the daycare expenses, taxpayers have. She has not paid one red cent.

                      Comment


                      • #12
                        Still not making much logical sense to me.

                        Both parties were interviewed, provided full financial disclosure to the subsidy office, and based on the provincial/municipal regulations, it was determined what each party can afford to pay for daycare.

                        Turning around and screwing the other person beyond what the system says they should pay AFTER going through this process does not really make any sense.

                        The system already took their net family incomes, their pay stubs and tax returns and said:

                        Mom you can pay X for daycare.
                        Dad you can pay Y for daycare.

                        If X > Y or Y > X, you should not be allowed a remedy to force the other person to pay. If they could afford to pay for daycare, the subsidy office would have already made them pay for it, no?

                        I'm gonna go lurk on Canlii I guess, and see if I can learn anything.

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                        • #13
                          Mom hasn't paid any because she is deemed to qualify for Subsidy... That's why we have it, to help those who need it. I honestly think that Dad can't turn around and "charge" her section 7 when her portion is covered... When I had subsidy, I was repsoncible for my portion and he was responcible for his... He did not qualify for subsidy while I did. In your example DAd is lucky to be paying the amount he is, because he should be paying proportioned to income. If their combined income is 100K and he makes 75K and she makes 25K, then he is responcible for 75% of the daycare cost... It is not in his favour to charge her section 7 because he's currently getting a deal by paying 50% vs. his poriton based on income!

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                          • #14
                            I think this may need a legal opinion, but IMHO yes dad can seek her share of section 7 expenses. If dad has ANY expense that qualifies as section 7, then she pays a proportionate share, that is what a section 7 expense designation is for.

                            Childcare is automatically a section 7, along with medical expenses over $100.

                            If there is an expense incurred on dad's time and it is section 7, then she pays her share. Sorry, this is in black and white in the Family Law Act. The fact that some outside agency has decided to cover her daycare expense on alternate weeks doesn't override the Family Law Act regarding the dad's expenses. The subsidy has nothing to do with him. He SHOULD apply for subsidy himself, and is just being obstinate, but his expenses are still legitimate and she is obligated to pay her share.

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                            • #15
                              What I found on Canlii was basically what Mess has said but the cases were not shared custody and only one parent had subsidy. Parents were able to claim section 7 expenses, after subsidy and after reducing for income tax benefits.

                              I think the best approach is to consider appropriate clauses in the separation agreement that if either party loses the subsidy, they are responsible for the childcare on their weeks. As both parties are currently low income the subsidy is covering 100% of the expense for BOTH parents at present, although it is the mother who pursued and secured the subsidy. When the Dad was being obstinate, she herself contacted the subsidy office and finished setting up his subsidy for him. This would mean in the future that each party would pay AT WORST 50% of the daycare assuming subsidy still covers some in a sliding scale based on the family income.

                              Seeing a flat 50/50 split on daycare costs in shared custody is not unusual even if other expenses are split proportionally, and have been upheld on Canlii. I think we will probably seek those clauses for the separation agreement.

                              Comment

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