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  • FRO and annual income fluctuations?

    My income varies as I am on commission.
    We have a S/A that has been in effect for 3 years. Divorced for 2 years.
    S/A states the support ammount as of 3 years ago and states it is based on guideline table ammounts and may be adjusted annually based on current guidelines and income. It also states proof of income shall be provided by request (not automatically).

    SItuation: I adjusted support 2 years ago as my income dropped significantly due to the recession, T4 provided as per agreement. She cried foul and claimed I was not 'allowed' to unilaterally change the agreement but payments continued until this year at that rate.

    She did not ask for my proof of income until this year, I provided it. Income had gone up 50% of what it had dropped the next year and to 75% of the original support calc. last year but I did not alter support since there were no requests for income.

    I suppose I 'should' have adjusted it but the agreement reads 'may' not must.

    Now my X is asking that the S/A be made into an order and intends to use FRO claiming arrears and late payments etc. We have a casual arrangement and I always give her the check in the children's bag on return near month end weekend. Sometimes that mean it's a few days past month end and it's never been a big deal but now she claims it is (I guess to make me look bad).

    My questions revolves around the unknown of "FRO" and how our agreement would be enforced by them.

    Since the agreement states 2 things, the original '07 amount AND that it can be adjusted annually by income will they adjust it automatically, will they take the original number in that paragraph and use that or will they want an amendment to the variable clause specifying a fixed amount??

    The way I understand it is if my income goes up and my x wants more support accordingly, I am supposed to voluntarily increase it with FRO, otherwise she goes to a judge to order it (and I likely pay her expenses as I was being intentionally resistant).

    Does FRO require proof of income every year or does that go to the X. Will FRO INCREASE amounts automatically due to change in income or only if the tables change? Seems only fair (not that ever enters into fam. law) that if FRO will automatically adjust up for income change they would also adjust down, especially if it's written into an agreement.

    Are there any downfalls for the payor using FRO rather than a private arrangement?
    Are there downfalls for the payee?

    TIA

  • #2
    Support is supposed to be automatically adjusted each year depending on your line 150 amounts if so written. No "maybe" about it. Common sense would dictate that if you make more, you are supposed to automatically adjust up, and if you made less, you adjust down.

    FRO is hard assed. Typical government organization. Mismanaged, poorly run, horror stories abound. They'll typically enforce the court ordered amount. If you want to change it, then you either have to go back to court to get a new motion, which can take FRO MONTHS to adjust. (and no, you won't receive any over payments back) OR you and your ex can sign a form and file it with them to have it adjusted.

    This of course, assumes your ex is willing to sign the form. (however if she refuses, your only recourse is to drag her to court, and ask for costs + reimbursement of the overpayment amounts which you may or may not receive)

    They have the ability to garnish your wages, have your license suspended and otherwise be a royal pain in the butt.

    IF FRO is involved, the second you receive word, STOP PAYING HER DIRECTLY. FRO will eventually kick into gear and will NOT take those payments into consideration. (You will essentially wind up paying her twice).

    The downfalls to the Payor is dealing with an underfunded, poor managed organization. They have a history of losing documentation, taking months to get new motions in effect, while not taking any overpayments into consideration, etc. They have a good deal of power and not a lot of checks or balances to that power.

    The biggest issue for the Payee is that the checks come in about a week to 10 days later than they are used to, and they can't complain about the amounts or the timing. Also FRO won't touch section 7 expenses unless there is a preset amount that is written in each month. (ie. the won't deal with proportional shares each month)

    The single biggest headache is that if your ex will not sign the forms to adjust automatically, you have little recourse except to return to court to have the new amount ordered. Expect to have to do this at least once/year.
    Last edited by NBDad; 08-11-2010, 11:28 AM.

    Comment


    • #3
      SO if the S/A and order stated that amount is adjusted based on income from what you tell me they will NOT adjust down but will they adjust it UP if my income rises (assuming there are not forms duly signed and submitted by both parties)?

      My situation is that there is dollar figure stated for support as of the start date of the agreement, then the clause immediately after states it be adjusted annually.
      From what I gather FRO will look only at that initial dollar amount and be blind to the adjustment clause is that correct?

      Does the same apply to increases in income? In other words must she apply and I agree voluntarily to submit the forms (or she has to take me to court and ask for increase plus court costs) to increase the amount otherwise FRO simply keep on taking the same amount?

      If so, since my income dropped I have paid less. In their eyes I can see that this would look like arrears as they will ignore the adjustment clause.
      DO arrears have to be court ordered as well for FRO to collect or will she be able to apply to add the arrears based on the dollar figure from day one?

      Am I correct in assuming if this is true that I would have to go to court to ask for relief from the arrears?

      Since I have not voluntarily adjusted the payment up for income is it likely I will lose that bid? Amount of arrears if you follow income adjustment would be around $4k, she is claiming around $5500 using day 1 support figure.

      Comment


      • #4
        Arrears begins upon the date a motion is filed in court to claim support or arrears. Not from some previous date, unilaterally determined by the recipient.

        Edit - she would have a hard time arguing arrears when she was receiving payments and the agreement provides that the amount is to be adjusted annually.

        She would probably lose her bid for arrears for the previously lowered amount, as it was in accordance with the agreement and your income. The increase she may be entitled to, as you have an obligation to advise your ex of any changes to income.

        IMO, you should each year provide your ex a copy of your T4, and state that you will be paying the guideline amount for said income, in accordance with your agreement.

        FRO is a PITA. They have I think the 2nd most complaints against them with the BBB in Canada. They will increase your income very easily, but any reduction will be a battle to push through. Although, your agreement does say "updated annually", which you should beat them over the head with.

        Comment


        • #5
          So to be clear,

          Do I provide proof of income to FRO, my X or both?

          FRO will automatically increase the table amount based on income reported to them by me but not decrease or does my X have to ask for the increase?

          Beat them over the head with the "annual update" clause... does this mean I can petition them directly and have them change the amount due to the S/A or will I still have to go through court any year income drops due to declining sales?

          Will FRO determine what they consider (or she claims) are arrears for the past 3 years (assuming filing date of today) or are arrears something that must be in a court order for them to enforce?

          Tks again.

          Comment


          • #6
            If you had an increase, give the statement to the ex and let her deal with FRO to get support increased. She is the client.

            If I had a decrease, I would provide it to both along with a consent for the ex to sign (or it could be a notice to be signed by the ex) to the reduction , which will be required. They won't just reduce it upon receipt of the statement. They will cause you to jump through hoops and possibly get a court order for the reduced amount.

            Comment


            • #7
              Originally posted by Paytable2 View Post
              Will FRO determine what they consider (or she claims) are arrears for the past 3 years (assuming filing date of today) or are arrears something that must be in a court order for them to enforce?
              FRO cannot create arrears, they can only enforce a court order. Your ex has no court order for arrears, so FRO cannot do a thing. She will have a hard time getting an order for arrears for money outside of your last increase (that she may have a chance).

              Comment


              • #8
                You will need to provide documentation to the ex when your income increases or decreases. If it increases, you are supposed to pay more automatically, so you should sign the FRO form IF she requests you to. (This means if your income subsequently drops and she refuses to sign, you can ask for costs when you file the motion to vary in court)

                FRO only enforces court orders. If she pushes the issue, she will likely win the arrears from the date of increase to present. (as you should have automatically adjusted UP when your salary increased). Were I you, I would start preparing to cover those, as you will likely have to. If you cannot, FRO CAN make arrangements with you. (Taking X amount extra than you are supposed to pay until the arrears are caught up.)

                Comment


                • #9
                  Thanks all.

                  NBDad... one of my questions was 'Do I provide proof of income to FRO, my X or both?'
                  From your last post I do NOT have to provide it to FRO, only to my X and SHE would go to FRO correct?

                  Comment


                  • #10
                    FYI - FRO will not make any changes to the support amount unless they receive a court order. This can be an order made by the judge, or a consent order signed by the parties, signed and sealed by the court, and filed with FRO.

                    My husband works on commission too... however with a base salary. What our lawyer suggested to us is to set child support at the table amount based on his base salary, and when he gets his tax return on which his actual income for the year (line 150) will be depicted, calculate how much is owed in accordance to the table amount and provide that payment in a lump sum to the support recipient (with, of course, proper documentation filed with FRO and the court that you have done so). This way, there will not be any constant arrear payments, but your child support will be paid as is obligated by law based on your actual income. So, if my husband makes $10K in commissions on top of his base salary, he will provide his son's mother approx $1,000 in "arrears" to even out the year's obligated support.

                    Comment


                    • #11
                      Hi,

                      Another way to have things changed if you are in FRO already is to go see your MMP and have them noterize your intentions. If your income went up or down and you have copies of your returns and your S/A states that every year the amount will be adjusted accordingly then you might be able to do that without having your ex sign papers. Just a thought but then again im just using common sense. FRO doesnt work with common sense, or judge signed orders either.

                      Comment


                      • #12
                        Ouch, I feel for you. We are going thru this right now. My husband was married before and has a 23 yr old son. His ex claimed he owed support (untrue, he has never been late and has paid his dues) reported him to FRO and it is ongoing (3 years now). My husband has a black mark on his credit bureau and his wages are garnished. His son is "23"!!!! He's ,NOT in school, nothing, and my husband still pays. My advice to you, if you can, reason with your ex and find out if you can come to an outside agreement. Going to court yields zero results. His ex has to agree to have it removed, until then, he pays. GL

                        Comment

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