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  • income not counted in calculations

    The spouse withdrew money from retirement savings and CCRA counted it as income.


    A lawyer said this should not be counted as income. Is that true?


    The same lawyer said that income under $6000 is not counted in the calculations for Child Support and Spousal support.


    Is this true?

  • #2
    If its a one time withdrawal that is not expected to continue then yes it can be argued it is not income.

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    • #3
      Originally posted by summersimmer View Post
      The spouse withdrew money from retirement savings and CCRA counted it as income. A lawyer said this should not be counted as income. Is that true?

      It seems to be very case dependent. Generally it is counted as income.


      If there is a regular pattern of withdrawals, then it is more likely to be counted as income.


      If it was a one-time withdrawal, it is possible that it will not be counted as income.

      The same lawyer said that income under $6000 is not counted in the calculations for Child Support and Spousal support.

      If the payer's income is below $12,000, then the amount of CS due is $0. If you earn $5000 in 10 separate jobs, then you have earned $50,000 and pay CS appropriately.


      I have no idea where this $6000 figure came from, but since it is under $12,000, the amount of CS due would be zero if that represented a yearly income.


      Of course, at minimum wage one should be making roughly $28,000, so it is unclear how anybody anywhere claims that they are making less than 28k, but it happens, and judges accept it.

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      • #4
        It is the person receiving support that makes less than 6K and their lawyer said that that money should not count.

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        • #5
          I guess my question is why would it be counted?

          If the RRSPs were there during the divorce settlement, it was probably part of the division of property.

          If they were saved after divorce, income was calculated and child support was paid against those earnings.

          I would equate RRSP withdrawal to equal to selling of assets. Why would there be an entitlement?




          Sent from my iPhone using Tapatalk

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          • #6
            If the support being paid is table then the recipients income is only needed for section 7 calculations. If the person is purposely unemployed then thats a different argument.

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            • #7
              Originally posted by Mom2414 View Post
              I would equate RRSP withdrawal to equal to selling of assets. Why would there be an entitlement?
              The assets (RRSP's in this case) could have been held prior to marriage, which means that they would not have been equalized nor ever used to pay support.

              I agree with you as it turns out, I do not believe that withdrawals should count as income, but they often do. As a result, think of it as a mandatory savings program for divorced people. Pulling money out of your RRSP's when you are a support payer will likely have such a high marginal rate of loss (with taxes and support) that it is almost certainly better to leave them untouched.

              Probably better to just borrow the money, and then pay it back when support is no longer payable. As a bonus, having increasing debt looks good if you ever want to lower your support payments.

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