Why are spousal support payments higher with shared custody?

[BrevityAVirtue]

The short version:

Support calculators show that I should pay more spousal support if my ex and I share custody of our daughter than if she lives primarily with my ex. Why is that the case?

The long version:

My ex is a student with zero income, and was while we were together as well. We were common law for roughly four years and had a daughter in 2015. I've been providing informal child and spousal support since our separation in 2018, but we don't yet have a formal separation agreement. We're currently working on that.

At the moment, our daughter lives with my ex roughly 60% of the time and with me 40%. I want to move towards 50/50, but when I change the "lives with" field from "spouse" to "shared" on mysupportcalculator.ca (and this result seems to be the same for other software, including the software my lawyer uses), my spousal support payments increase by about 15%. Why is this the case? And why do child support payments not change at all? I would have assumed that a more equal custody arrangement would mean that my payments would decrease. I can sort of understand why they wouldn't decrease, but I have no idea why they would increase.

[Janus]

With shared custody, you will get half of the child related benefits. This results in less money available for mother. As a rough estimate, I get about $4-5k a year in benefits (including the eligible dependent tax deduction), which isn't exactly chump change.

That said, I would not accept her income being at zero. It would be nice to be a student, especially if somebody else is footing the bill. However, she has to earn a living like most adults, (unless she has some disabilities).

[LovingDad1234]

With shared custody, you will get half of the child related benefits.

If you do not currently have shared custody but eventually will, do you need to do anything to start receiving your portion of the child-related benefits, such as advise CRA of when shared custody is achieved? When is it considered shared custody in accordance with CRA, is it at 40% or 50%?

[BrevityAVirtue]

Okay, that makes sense. Thanks for the clarification. Are the child benefits a flat amount per child, or do they vary depending on your financial situation? She's always collected them, so I actually have no idea how much they total.

We put together an MOU with a mediator that imputed gradually more income to her over the next few years in recognition of the fact that she's an able-bodied adult who's entirely capable of earning income (and who should probably stop being a student some day). She's currently refusing to honor those terms of the MOU and asking her lawyer to draft a separation agreement that has me paying more support for a longer period of time with no imputing of income, arguing that the pandemic is making it impossible for her to find work. I have no intention of agreeing to those terms, and I'm starting to get worried that court is inevitable.

I don't think a midrange number like 40% automatically counts as shared or sole custody; I think it can fit into either, depending on the terms of your parenting agreement. We haven't finalized that arrangement yet, and while I've been asking/arguing for a 50/50 arrangement, she's so far flatly refused.

[LovingDad1234]

I don't think a midrange number like 40% automatically counts as shared or sole custody; I think it can fit into either, depending on the terms of your parenting agreement.

40% is when the courts will consider offsetting child support payments as you are deemed to have a sufficient amount of parenting time possibly warranting an offset. Most separation agreements will spell out when if/when offset will occur so there is no ambiguity.

Back to my question, Janus suggested that when you have shared custody, the CCB benefits will automatically be split. For clarity sake, if you reach 50% parenting time, will CRA automatically start sending you 50% of the CCB? Do you have to notify them that you now have 50/50 parenting? Is there a form to fill out or is it by virtue of the Court Order or Separation Agreement being filed with CRA?

We haven't finalized that arrangement yet, and while I've been asking/arguing for a 50/50 arrangement, she's so far flatly refused.

There are many threads on this post that strongly suggest you pursue 50/50, and not to accept less, unless you yourself actually want less than 50/50.

[Janus]

If you do not currently have shared custody but eventually will, do you need to do anything to start receiving your portion of the child-related benefits, such as advise CRA of when shared custody is achieved? When is it considered shared custody in accordance with CRA, is it at 40% or 50%?

The answer is so much worse than you might imagine.

The calculators assume that you will be getting half of the child benefits. However, when you try to claim shared custody with the CRA, they have a tendency to deny those benefits to the person who is paying the net offset support (since a parent who pays support is not eligible for benefits), even if the agreement says that the residential custody is at 50%.

Remember, separation agreements are in no way binding on the CRA, just like CRA tax deduction rules are in no way relevant to family law proceedings.

Some parents have gone to tax court and.... lost. Yup, they lost.

There used to be a workaround, where the separation agreement said "Parent A pays full support of $1000, parent B pays full support of $800, but for convenience parent A will just pay $200", but we had reports on this forum of CRA rejecting that wording. That was mostly last year, so I'm not sure if CRA is still doing that nonsense, but clearly it is a risk.

So yes, you need to advise CRA, but be aware that they might reject it. Might be worthwhile to have some language in your agreement to adjust support in that eventually, but don't expect your ex to be agreeable or your lawyer to even know about this quirk (read: massive sexist bullshit) in tax law.

[Janus]

40% is when the courts will consider offsetting child support payments...

Remember that "will consider offsetting" has a completely different meaning than "will offset". Generally, if you have less than 40% and move up to 40%, expect child support to not change at all.

There are many threads on this post that strongly suggest you pursue 50/50, and not to accept less, unless you yourself actually want less than 50/50.

If you accept less than 50%...

1) Expect to probably pay table child support
2) Expect your child to probably see the other parent as a "real parent"
3) Expect to probably lose any future mobility case
4) Expect to probably lose any educational dispute case

Giving up 50% is by far the biggest mistake fathers make. And they do it repeatedly. A mother might be able to pull off less than 50%, since the courts will still think of her as a parent, but there is no way a father can ever allow that to happen.

[LovingDad1234]

So yes, you need to advise CRA, but be aware that they might reject it.[/QUOTE]

So write a random handwritten to letter to CRA? No forms to fill out? No specific department or direct email? Just write a letter and wait to see if cheque’s start coming in? If they reject it, is there appeal mechanism? Seems kind of primitive that the process involves writing a letter and crossing your fingers, whereby the decision is based on what side of bed the CRA employee woke up on. There has got to be a better and equitable process involved. If both parents equally parent their children, the CCB benefits should be equitably distributed.

[LovingDad1234]

There appears to be mixed messages on the CCB topic. In one post (Janus on June 11) states that "with shared custody you will get half the child benefits." However in subsequent posts, it is suggested it is a crapshoot. Which is it? I merely ask because I am on the road to 50/50 and want to know what steps need to be taken. Do cheques automatically start arriving, or do you need to advise CRA? And if you need to advise CRA, how would you do so? Is there a form to fill out online or a simple phone call? Thanks for the insight on this topic.

[rockscan]

There are a few posts on the forum about these benefits. Do a search through the financial issues section.

[LovingDad1234]

Or conversely someone can respond to the questions posted directly in this thread. Janus seemed to contradict himself so perhaps he can clarify?

[rockscan]

It’s off topic and against the rules and its also already been answered.

[LovingDad1234]

Makes sense, thank you. I will do searches of the forum to see if I can clear up the contradicting information provided in this thread regarding equally splitting CCB when its equal parenting.

[Janus]

There appears to be mixed messages on the CCB topic. In one post (Janus on June 11) states that "with shared custody you will get half the child benefits." However in subsequent posts, it is suggested it is a crapshoot. Which is it?

Both.

The child support calculators assume that you will be getting half of the child support benefits. In reality, depending on the wording of the agreement, you might not actually get half of the child support benefits. As a result, your child support has gone up because you are supposed to be receiving money that you are in fact not getting.

It isn't fair, but that's not a driving force in family law. The concept of more child support being a good thing is considered to be tautologically true.

As a workaround, perhaps an agreement could have language that says that if the paying parent does not qualify for such benefits, that child support gets reduced by that amount (well, by 1/12th of that amount) every month. I haven't seen any case law about that, so I have no idea if my proposed workaround would be accepted by the courts.