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  • Child Support clause in final MOS

    I (self-represented) am finalizing my final Minutes of Settlement (with wife who has lawyer), and want to ensure the child support clause is worded appropriately so that I can claim the dependent credit on my personal tax return for one of my three children (without any CRA hassle). This issue (i.e. the wording of this paragraph) is the final item to be agreed – the child support amounts are not in question. [background note – FRO has never been involved, and I am the higher income earner, so if you net the two child support payments, I would be the payor].

    Based on the legal advice I’ve obtained, I am suggesting the following high-level wording:

    1. Wife and I share custody of the children
    2. Children spend approximately 50% of their time with each parent
    3. Wife will pay the sum of $xxx per month of child support to me based on her annual income of $xxx
    4. I will pay the sum of $xxx per month of child support to wife based on my annual income of $xxx
    5. Ensure no mention of “Child Support Guidelines” in the paragraph
    6. Ensure no mention of “set off” in the paragraph

    This appears to be ok, and consistent with the ruling found in Verones v. The Queen

    Wife’s lawyer is being very confrontational. He objected vehemently to this wording for the following reasons:

    a) Wife doesn’t have a child support obligation – only I do (as the higher income earner)
    b) The suggested wording introduces collectability and enforcement issues for wife
    c) I am simply not entitled to such credit based on CRA rules and case law (he suggested I look at Lawson v. The Queen)
    d) Omitting the reference to the Guidelines and set-off wording amounts to “fraudulent representation”

    To address his concerns in (b) above, I came back and suggested we change the payment dates (mine at beginning of month and wife’s at end), and a clause saying if FRO is ever involved, a net payment can be made for convenience (so there’s an incentive for me to never be a late payor).

    He once again rejected, and scheduled a court date. He wants me to explain my behavior to the court.

    Oh, and he wants me to pay wife’s legal fees!

    Suggestions?

  • #2
    Go to court. If you are doing a strict setoff and you clearly have 50% time, you will almost certainly win. Make sure your offers to settle are in writing.

    As a not-insignificant bonus, it will make your ex think twice before dragging you to court in the future.

    You might want to consider hiring a lawyer to increase the level of financial punishment you get to inflict upon your ex when she loses. That is because as a self-represented person, you won't be able to claim much in costs, but if you have a lawyer you can ding her for a good chunk of money.

    Make sure to only fight about that narrow issue. Don't ask for anything you aren't guaranteed to get.

    Comment


    • #3
      Originally posted by clusterone View Post
      c) I am simply not entitled to such credit based on CRA rules and case law (he suggested I look at Lawson v. The Queen)
      Maybe I'm missing something, but having just read through that case, I don't get that lawyers suggestion that based on it, your ineligible. It in fact shows how the CRA tries to disqualify people for the credit, who haven't worded their agreement like you are attempting to get yours worded.

      https://www.canlii.org/en/ca/tcc/doc...?resultIndex=1

      I agree with Janus, if he wants to argue in court over that one thing, go for it, it's ridiculous..

      Comment


      • #4
        For the CS...take it to court.

        Keep in mind that family court can rule whatever they want as far as CRA and tax credits, your agreement can say that CRA is to direct all tax monies to the family dog for all they care. FLA does not override tax law, just ensure your agreement is worded the way you described and it will be up to CRA, not the ex or her lawyer or any FLA judge, to decide and apply tax law as intended.

        Comment


        • #5
          Originally posted by clusterone View Post
          Based on the legal advice I’ve obtained, I am suggesting the following high-level wording:

          1. Wife and I share custody of the children
          2. Children spend approximately 50% of their time with each parent
          3. Wife will pay the sum of $xxx per month of child support to me based on her annual income of $xxx
          4. I will pay the sum of $xxx per month of child support to wife based on my annual income of $xxx
          5. Ensure no mention of “Child Support Guidelines” in the paragraph
          6. Ensure no mention of “set off” in the paragraph
          I'm not sure why you'd want to avoid reference to child support guidelines. That's where you're getting each of your CS sum from for line 3 and 4, right?

          Originally posted by clusterone View Post
          Wife’s lawyer is being very confrontational. He objected vehemently to this wording for the following reasons:

          a) Wife doesn’t have a child support obligation – only I do (as the higher income earner)
          b) The suggested wording introduces collectability and enforcement issues for wife
          c) I am simply not entitled to such credit based on CRA rules and case law (he suggested I look at Lawson v. The Queen)
          d) Omitting the reference to the Guidelines and set-off wording amounts to “fraudulent representation”
          Oh yes, with a 50-50 arrangement, your ex-wife does indeed have a CS obligation, and you want that entrenched in your agreement. You do plan to adjust annually based on income changes, right? Well, some day, she may have a higher income than you do, and you may be the net recipient.

          Originally posted by clusterone View Post
          To address his concerns in (b) above, I came back and suggested we change the payment dates (mine at beginning of month and wife’s at end), and a clause saying if FRO is ever involved, a net payment can be made for convenience (so there’s an incentive for me to never be a late payor).

          He once again rejected, and scheduled a court date. He wants me to explain my behavior to the court.

          Oh, and he wants me to pay wife’s legal fees!
          That last bit is a standard threat to get you to back down out of financial fear. You would only have to pay if you lose in court. He knows that if you win, the tax credit is shared instead of going all to your ex-wife, so this threat is just part of his strategy to make you give up.

          Frankly, this lawyer sounds like a bit of a weasel, wasting your ex-wife's money on his legal fees to argue against every teeny tiny little thing he knows he has a good chance of losing.

          I'm not sure if your idea of the payment dates not matching up is a good solution though. Stick to your first idea above and it should work out. Search this forum for wording ideas, because we have seen several posters who pay offset fight CRA in the past and win about this issue.

          I can't remember offhand, but I think it worked okay with CRA if you had a line that said

          5) for ease of accounting, one payment of $xxx will change hands, where that is (your CS minus her CS).

          Just go to court, tell the judge that you understand that in a 50-50 access with offset CS situation, that CRA is very particular about the wording before they will divide the child tax credits between the parents instead of just giving it to the parent with the lesser income. You would like to have that wording correct in your agreement from the beginning, instead of having the hassle of CRA rejections and appeals and clawbacks of overpayments from your ex-wife once it is settled.

          Find out from CRA what wording they like to see, or find out from posters here what worked for them, and present that research to the judge. Count all the hours it took you to do that research as part of the court costs you get back from your ex-wife for having to go to court.

          Comment


          • #6
            Originally posted by Janus View Post
            Go to court. If you are doing a strict setoff and you clearly have 50% time, you will almost certainly win. Make sure your offers to settle are in writing.
            I'm simply trying to work out the appropriate wording. I find it very hard to believe (waste of time and resources) that court is required because we can't seem to agree on the way the clause is to be worded. Do courts or judges get involved in wording!?

            Wife is in no different a position, no matter what the wording says. She will still end up with the same amount of money at the end of each month. It's simply the way that money is paid, and the way the agreement is worded.

            Comment


            • #7
              Originally posted by Janus View Post
              You might want to consider hiring a lawyer to increase the level of financial punishment you get to inflict upon your ex when she loses. That is because as a self-represented person, you won't be able to claim much in costs, but if you have a lawyer you can ding her for a good chunk of money.

              Make sure to only fight about that narrow issue. Don't ask for anything you aren't guaranteed to get.
              I want to get the separation completed, not try to unleash more financial punishment on her (who knows what could happen in the future). I may hire a lawyer, but simply to make sure my arguments are properly made and procedures are followed.

              Comment


              • #8
                Originally posted by Soiled View Post
                Maybe I'm missing something, but having just read through that case, I don't get that lawyers suggestion that based on it, your ineligible. It in fact shows how the CRA tries to disqualify people for the credit, who haven't worded their agreement like you are attempting to get yours worded.

                https://www.canlii.org/en/ca/tcc/doc...?resultIndex=1
                I think he's taking the view that the case illustrates, based on our agreement as he wants it worded, that I am not eligible for the credit.

                I, like you, am of the opinion we need to look to these cases to ensure the wording is NOT like the one in the case.

                Comment


                • #9
                  Originally posted by clusterone View Post
                  Do courts or judges get involved in wording!?
                  Courts get involved when people can't come to an agreement. If you can't agree on wording, then court would definitely be involved.

                  Wife is in no different a position, no matter what the wording says. She will still end up with the same amount of money at the end of each month. It's simply the way that money is paid, and the way the agreement is worded.
                  We know, which is why we recommend that you go to court. In fact, I would argue that this is one of the best reasons to go to court. Somebody is refusing to do the right thing, you need to compel them to do the right thing.

                  Comment


                  • #10
                    Originally posted by clusterone View Post
                    I want to get the separation completed, not try to unleash more financial punishment on her (who knows what could happen in the future). I may hire a lawyer, but simply to make sure my arguments are properly made and procedures are followed.
                    The future is the reason for the financial punishment. If she loses and only pays a few hundred in costs, then she can bring you to court again in the future, because losing isn't that bad. If she loses and has to pay $10,000 in costs, you can be damn sure she will never bring you to court ever again unless you do something really stupid.

                    Comment


                    • #11
                      I would be interested in getting complete paragraphs (i.e. actual complete examples) from other members who have had CRA review and subsequently accept their wording. Especially those that contain a clause referencing a net payment for convenience.

                      I am still unsure if CRA accepts a net payment - and hesitant to even include it in my agreement. The link below summarizes CRA accepting both - but it appears there are very certain nuances.

                      https://www.corkumfinancial.ca/wp-co...2017-07-20.pdf

                      My overall interpretation:

                      (a) *If* a net amount is referenced in an agreement, and is calculated by only referring/using the Guidelines, then the credit won't be allowed. However, if the net amount is calculated by referring/using the Guidelines, and then adjusted further for some other item(s), the credit would be allowed.

                      (b) *If* a net amount is NOT referenced in an agreement, then making the separate child support payments is enough to demonstrate there is an obligation by both parties, and the credit would be accepted.

                      Interested in anyone else's interpretation.

                      Comment


                      • #12
                        Below, as you requested, is the complete paragraph from my divorce judgement for child support. CRA has twice (maybe three times, I'm unsure and would have to review my records sometime) attempted to deny me getting tax credits. I've disputed it each time, and won. Entire process takes a significant period of time, though no more than a year. I could probably dig out my letters from them about all this sometime if its really of interest.

                        The Plaintiff shall pay to the Defendant the sum of $1,028.00 per month for the support of the children of the marriage payable on the first day of each month, commencing August 1, 2013. The Defendant shall pay to the Plaintiff the sum of $1,029.00 per month for the support of the children of the marriage payable on the first day of each month, commencing August 1, 2013 for a net support payment from the Defendant to the Plaintiff of $1.00 per month.

                        Comment


                        • #13
                          Originally posted by clusterone View Post
                          He once again rejected, and scheduled a court date. He wants me to explain my behavior to the court.

                          Oh, and he wants me to pay wife’s legal fees!

                          Suggestions?

                          Is he perhaps trying to allege that you are only doing 50% access to cut child support in half?

                          I would send a letter as follows:


                          Dear counsel,

                          The access arrengements would put us in a shared custody arrangement, as per section 9 of the child support guidelines. A court date is not necessary. I need you to confirm in writing that you are in agreement of this proposal. If you are not in agreement, then the judge will decide for us and I will be seeking costs on full idementiy basis for your clients clearly unreasonable position in the face of a shared custody arrangement.

                          I look forward to your reply, no later than X date.

                          Thank you for your prompt attention to this matter.

                          Your name

                          ...

                          ...

                          Speak to a good lawyer in your area and let your lawyer hand their ass back to them.

                          Comment


                          • #14
                            If CRA and the other parent are giving you issues trying to make this claim, what are the steps needed in order to get CRA to comply?

                            I am in a situation where we have 50/50 joint custody and the other parent pays myself an offset based on our yearly incomes and it is clearly referred to as child support from the child support tables.

                            I have found and quoted the relevant law in the Income Tax Act, but CRA is stating that the other parent has to agree to you being given the credit, despite the fact that in the court order, money is only being transferred from one parent (not both).

                            Comment

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