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

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  #1  
Old 12-13-2018, 12:38 AM
tunnelight tunnelight is offline
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Default Child tax benefits

If there is no child support payable by either parent, what is required in the order for both parents to be entitled to benefits? This is regarding a shared custody arrangement.

How does CRA handle both parents being elligible ?
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Old 12-13-2018, 06:41 AM
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Child support is always due. The quantum might be zero though. Just follow the normal procedure:

"Mom pays dad $521, and dad pays mom $521. For convenience the parties agree that these amounts offset for this year and therefore each party will instead transfer a sum of $0 to each other."

I find it unlikely that the amount is actually zero unless both parents have the same salaried position with the same years of experience.
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Old 12-13-2018, 08:43 AM
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Quote:
Originally Posted by Janus View Post
Child support is always due. The quantum might be zero though. Just follow the normal procedure:

"Mom pays dad $521, and dad pays mom $521. For convenience the parties agree that these amounts offset for this year and therefore each party will instead transfer a sum of $0 to each other."

I find it unlikely that the amount is actually zero unless both parents have the same salaried position with the same years of experience.
This used to be an acceptable standard however CRA has taken to rejecting this wording over the past few years. The updated info is not a flat out mom pays dad X amount and dad pays mom X amount. They have also taken to demanding proof that the payments changed hands and the money did not only flow one way, even if it makes sense for an offset anount.
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Old 12-13-2018, 08:46 AM
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Quote:
Originally Posted by blinkandimgone View Post
This used to be an acceptable standard however CRA has taken to rejecting this wording over the past few years. The updated info is not a flat out mom pays dad X amount and dad pays mom X amount. They have also taken to demanding proof that the payments changed hands and the money did not only flow one way, even if it makes sense for an offset anount.
So what is the required wording?
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Old 12-13-2018, 01:09 PM
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Quote:
Originally Posted by blinkandimgone View Post
This used to be an acceptable standard however CRA has taken to rejecting this wording over the past few years. The updated info is not a flat out mom pays dad X amount and dad pays mom X amount. They have also taken to demanding proof that the payments changed hands and the money did not only flow one way, even if it makes sense for an offset anount.

Oh, that's right! I had not heard anyone else complaining about recently so I had figured that CRA had quietly dropped that ridiculous stance. I assumed we would have a much higher number of irate people on this forum if CRA was still pulling that crap.


For tunnellight, maybe agree that you each pay $1 per month, and then pay each other $12 per year? If CRA is still doing this, it is a bit of a wild west situation and we don't really know what would work...
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Old 12-13-2018, 03:15 PM
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I have 50/50 and no child support paid.

We each receive 50% of what we would have based on household income. They audited and we had to prove we had 50/50- each parent had to provide proof they were on the school registration, receipts from extracurriculars showing our address, letters from daycare etc.


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Old 12-13-2018, 04:04 PM
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https://globalnews.ca/news/4184196/e...d-benefit-cra/

Quote:
However, “a recent case from the Tax Court of Canada, Harder v. The Queen, made clear that if one parent is paying the other child support on the basis of a ‘set-off’ amount, that parent cannot claim the eligible dependent credit,” Johnston added.

Separated couples with shared custody of the children often arrange child support payments on the basis of a “set-off” between each parent’s obligations, Johnston explained. For example, if Dad has an income of $80,000 per year, he would be required to pay $1,211 in child support for two children, she added. But if the children split their time equally with Mom, who earns, say, $50,000 per year, she would also be required to pay $755 a month in support to Dad. Typically, it’s just easier for Dad to pay the difference.

That is the arrangement Haines says he currently has with his former wife.
The Harder court case has “caused family law lawyers to have to draft agreements where, to use the examples above, instead of Dad just paying the $456 set-off to Mom, Dad actually has to pay the $1,211 and Mom actually has to pay the $755. In that case, CRA will allow each parent to claim the eligible dependant credit for one child.”
Someone with Haines’ more practical child support setup, however, cannot claim the credit.

https://www.canlii.org/en/ca/tcc/doc...?resultIndex=1
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Old 12-13-2018, 11:40 PM
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Ok. So that all makes sense and should be no issues if both parents comply.

What happens one parent doesn't pay their child support? Can opposite parent stop paying or only pay the difference because the other stopped paying ? Would CRA monitor all this to ensure correct amounts are actually being paid by both parties?
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Old 12-14-2018, 08:15 AM
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Quote:
Originally Posted by tunnelight View Post
What happens one parent doesn't pay their child support? Can opposite parent stop paying or only pay the difference because the other stopped paying? Would CRA monitor all this to ensure correct amounts are actually being paid by both parties?

From what blink is saying, CRA will monitor to the extent that you need to show proof that the funds have been transferred, failing which they will deny your tax credit.


As you pointed out, the major issue here is the potential for one parent to stop paying. The closer the incomes, the bigger the issue. Probably the only enforcement would be through the courts, or maybe FRO?


It is just a terrible ruling by the CRA, I have no idea why they are actually doing this, beyond possibly an urge to screw over fathers.
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