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How to make agreement on CS adjustment automatic

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  • How to make agreement on CS adjustment automatic

    I have read a lot about 'material change circumstance' with respect to being a reason to asjust CS.

    My ex's lawyer had said that 'it is appropriate to fix an amount, based on current incomes. IF there is a material change in cirmcustances (such as [ex ] earning more money over time), then the amounts get changed. But only if and when that happens' - Note that my ex was not working at the time!

    A friend of mine sets an amount for CS based on each of their incomes from previous year tax returns, and they do this every year. At the end of the year when they do their taxes, they see how far they were off and lump sum the difference that should have been paid. The payor can vary the payments during the year as they track what they are actually making to minimize the lump sum difference.

    The point is that their agreement (not sure if it in writing) is to pay CS based on what they actually make, not on a fixed guess amount. This seems fair to me and I would like to do this in my written separation agreement. So far I have adjusted CS 3 times in 6 months as my ex changed jobs - we both agreed to this.

    To have CS fixed and then argue if there was a "material change in circumstance" to me sounds like the lawyers just want us to fight for the next 12 years. To me it is crazy. CS is based on income, so just make that part of the agrement - CS will be paid based on actual income.

    Everyone's income varies to some extent, so it seems to me this must be how CS is handled - its is variable. I make a different amount each year (my own business, and my ex has gone from no work, to full time, to part time in the last 6 months)

    I get the feeling that most agreements do not make CS adjustable with a formula, but have a set amount.

    My questions are
    1. Does anyone have experience or advice on implementing variable CS based on income - when and how to adjust etc.?
    2. What about just adjusting forward - pay based on previous year tax return - which would work if there is not a big difference each year (a burden may be created if the past year was great financially and this year not)
    3. Does anyone have this in their separation agreement - to automatically adjust CS based on income?
    4. My only concern with this is that she does not work for whatever reason - remarries etc. I have resolved not to stress about her working part time, because I know that she currently has incentive to work more (our SS is not based on her income or mine and is time limted). I do though want to put wording into our agreement for CS purposes, we must work at leat 3/4 full time for example, otherwise income is imputed to that level for CS calculating - any advice on that idea?

    Thanks

  • #2
    What we did, before the case was sent to FRO, was we would pay based on the previous year. At the end of the year we would review the actual income and compare it to the amount of CS paid.

    In some years we had a credit, and in other we had a balance due to the ex.
    We either provided the additional amount or subtracted the credit for the next months CS.
    We would provide T4's and notice of assessment to show the reason for the adjustment. We'd send it out as soon as we got the assessment in the mail.

    This changed when it went through the FRO, now it doesn't change unless the ex feels that dad’s income has changed, and then submits a request to change motion. Usually without bothering to ask us for his documentation.
    We would gladly provide them if she asked, but over recent years she has been very bitter and vindictive and takes all issues to court first. The first year that she took the court route to vary CS she was awarded court costs because we had earned more then we were paying on and hadn’t taken the initiative to change CS right away when we got dad’s T4.
    Hard lesson learned!
    In subsequent years, we would provide her with a registered letter containing all documents without being asked, plus an offer to vary CS, and if she still chose to take the issue to court we provided the letter and documentation and were awarded costs since she chose the court route rather then settling via negotiations which we demonstrated we were willing to do.

    If you prefer to pay according to the previous year’s income, with a review at years end, and if both parties are in agreement to this practice, the it can be added to the agreement.
    We had an informal agreement. We submitted our desire to do things this way via email to which she basically replied, "I don't care how it's paid so long as I am paid what is due."

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