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respondent · #1 07-23-2022, 04:04 PM

I am looking into my experience for Child/Spousal support, and find that system is extremely inefficient.

Let's consider hypothetical example:
1. It is July 1st, year 2019, you just exchanged NOA for 2018. Two people working on T4, there is single source of income. Your entire income is reported on line 15000. In order to establish or adjust CS/SS payments, if you are on non speaking terms with your ex you'd have to hire a lawyer, calculate Divorce Mate, make a motion, get a court date somewhere 8 months away, attend hearing etc. The judge would look at the attached DM, and will point to midrange SS scenario.
You then submit to CRA your spousal support payments receipt for tax deductions.
This process would cost around 15k for each side in legal fees, and countless amount of time wasted.
2. It is July 1st year 2020. Repeat steps in #1
3. It is July 1st year 2021. Repeat steps in #1
...
4. It is July 1st year 2040. Repeat steps in #1

It costs you tons of money every year even if you would be filing new 14B on consent.

There are few factors affecting the support calculations:
1. Your/ex age.
2. Children age and residency.
3. Your/ex income on line 15000.

However, exactly same facts are used for Child Tax Benefits, and therefore CRA does have this info and could automatically adjust the support payments either via monthly payments or once a year tax return process.

I would suspect both payor and receiver would prefer system doing it for them automatically (and for free), and would go to court only in hard cases i.e. when ex hides income, runs a corporation etc. where you can't establish true line 15000.

Am I missing something?

iona6656 · #2 07-27-2022, 01:39 PM

Yes. you are missing something.

If you have an order from the court- it typically provides for adjustment of CS.

Why would the CRA be involved in adjusting the payment.

If the other party doesn't follow the order- then yes, there's no way around going back to court to get CS adjusted. But I was forced to do that- I would be asking the court for full indemnification of any legal fees.

respondent · #3 07-27-2022, 03:09 PM

Quote:

Originally Posted by iona6656

Yes. you are missing something.

If you have an order from the court- it typically provides for adjustment of CS.

Why would the CRA be involved in adjusting the payment.

If the other party doesn't follow the order- then yes, there's no way around going back to court to get CS adjusted. But I was forced to do that- I would be asking the court for full indemnification of any legal fees.

In my real case (not the hypothetical above) court order had an adjustment statement - the opposing party just ignores it. So yes, it will end up with motion, but from what I hear good luck on recovering even 50% of the legal costs.

At the same moment CRA does know your full income. Does know who kids live with. I don't see a need for legal system here.

rockscan · #4 07-27-2022, 03:31 PM

So they ignored the timeline, file a motion and get it moving and ask for a repayment of the overpayment if funds. That happens too. Judges do order someone to repay money they received incorrectly.

Do it without a lawyer and save your fees. You may get some money back because they didn�t adhere to the order or you may not but in the end you stop paying funds to her.

respondent · #5 07-27-2022, 03:50 PM

Quote:

Originally Posted by rockscan

So they ignored the timeline, file a motion and get it moving and ask for a repayment of the overpayment if funds. That happens too. Judges do order someone to repay money they received incorrectly.

Do it without a lawyer and save your fees. You may get some money back because they didn�t adhere to the order or you may not but in the end you stop paying funds to her.

I am doing it. I just wish I didn't have to. If CRA is capable calculating the UCCB and they have online calculator for the CS, they know who kids lived with and your line 150 in NOA - it wouldn't be a rocket science to calculate the CS as well without spending court time. And note it would benefit both payor and receiver, since they wouldn't have to pay their lawyers at least for this.

rockscan · #6 07-27-2022, 04:08 PM

Quote:

Originally Posted by respondent

I am doing it. I just wish I didn't have to. If CRA is capable calculating the UCCB and they have online calculator for the CS, they know who kids lived with and your line 150 in NOA - it wouldn't be a rocket science to calculate the CS as well without spending court time. And note it would benefit both payor and receiver, since they wouldn't have to pay their lawyers at least for this.

CRA is not the family court and your ex doesn�t have to do what they say.

Also, CS is not listed for taxes and your order may outline who is eligible for the UCCB.

respondent · #7 07-27-2022, 05:17 PM

Quote:

Originally Posted by rockscan

CRA is not the family court and your ex doesn�t have to do what they say.

Also, CS is not listed for taxes and your order may outline who is eligible for the UCCB.

The CS still has to be listed for taxes. It won't be tax deductible, but you still show it on your tax return.
You don't go to court over child tax benefits - the CS is a fixed table amount, could've easily be done there in same place, at least for those where income imputation isn't required, they CRA would send you instead of child tax benefit payment the CS as well. Everything done on time, no lawyers involved, no courts.

respondent · #8 07-27-2022, 05:25 PM

Quote:

Originally Posted by rockscan

CRA is not the family court and your ex doesn�t have to do what they say.

Also, CS is not listed for taxes and your order may outline who is eligible for the UCCB.

The CS still has to be listed for taxes. It won't be tax deductible, but you still show it on your tax return.
You don't go to court over child tax benefits - the CS is a fixed table amount, could've easily be done there in same place, at least for those where income imputation isn't required, they CRA would send you instead of child tax benefit payment the CS as well. Everything done on time, no lawyers involved, no courts, no costs. All adjustments even minor automatically considered.

rockscan · #9 07-27-2022, 06:02 PM

Quote:

Originally Posted by respondent

The CS still has to be listed for taxes. It won't be tax deductible, but you still show it on your tax return.
You don't go to court over child tax benefits - the CS is a fixed table amount, could've easily be done there in same place, at least for those where income imputation isn't required, they CRA would send you instead of child tax benefit payment the CS as well. Everything done on time, no lawyers involved, no courts, no costs. All adjustments even minor automatically considered.

No you don�t have to report child support. It�s not considered income and it�s not tax deductible.

respondent · #10 07-27-2022, 09:54 PM

Quote:

Originally Posted by rockscan

No you don�t have to report child support. It�s not considered income and it�s not tax deductible.

has nothing to do with being tax deductible. CRA now checks that you pay your child support and allows your spousal support tax deduction only if you prove them that you paid in full your child support, in other words they already to extent duplicate FRO function:

Enter on line 22000 of your tax return the child support payments you made between January 1 of the year and the date the election was accepted, and the support payments you made (during the year) for a spouse or common-law partner if all of the child support for 2021 and previous years is fully paid.

https://www.canada.ca/en/revenue-age...ipient-12.html

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