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How to measure income for Section 7 Expenses?

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  • How to measure income for Section 7 Expenses?

    Hi guys,

    Quick question- how do you determine incomes for the section 7 special expenses split?

    Do you use

    1) the previous years tax return income amount?

    2) the parents current salaries/incomes?


    Thanks in advance.

  • #2
    Simple overview

    Parent A line 150 is 40k

    Parent B line 150 is 35K

    Add both together= 75K

    Parent A 40k devided by 75k times 100= 53%

    Parent B 35k devided by 75K time 100= 74%

    Comment


    • #3
      Originally posted by good_mom View Post
      Simple overview

      Parent A line 150 is 40k

      Parent B line 150 is 35K

      Add both together= 75K

      Parent A 40k devided by 75k times 100= 53%

      Parent B 35k devided by 75K time 100= 74%
      Thanks. That's what I thought- though my 2017 income is skewed because I was on mat leave for 1/2 the year. I make more than him regularly.

      Comment


      • #4
        Well that can be something to make it not so simple. I'm sure others will chime in.

        Comment


        • #5
          Its kind of a crapshoot and people who lose their jobs part way through the year get punished with line 150. The legal advice given to my partner was that its current income if it has changed. For instance his income doubled halfway through the year so he used the increased income to determine his portion of s7 for an expense that came up a few months later.

          If you make more than your income tax you should use that amount to show good faith but if you want to stick with the line 150 you could do that too.

          Comment


          • #6
            In theory: It should be based upon current income.

            In practice: The income of most people is relatively stable year to year, so using the previous year's income is a relatively good approximation, and has the advantage of being quite objective.

            In your case: Obviously I would push for "previous year" methodology, but in theory it should be current income.

            Comment


            • #7
              Thank you for the answers guys.

              I have sent a 'With Prejudice' email stating basically everything you have said.

              Dad sent an email to the owner of the Montessori saying charge him 37% (yes he was that exact).

              Based on our 2017 incomes- breakdown would actually be

              Dad- 55%
              Mom- 45%

              But in the email I said- "I'm pretty sure that we are to use our incomes from our 2017 tax returns. But I acknowledge mine would be skewed because of my maternity leave. I suggest we use our current incomes". I sent a redacted screen shot of my latest paystub (just edited to take out my employee ID). And calculated it based on that and his current salary + what he has earned to date by his marking for the CPA (as an independent contractor).

              Breakdown is

              Dad - 42%
              Mom- 58%

              I copied both of our lawyers.

              I'm gearing up for a motion for CS and section 7 expenses.

              Comment


              • #8
                I think there are cases for Mat leave....it could go either way. Suggest you check that out.

                Dad should not have to pay more because you extended your family...we are jsut a bunch of people on the net too.

                Comment


                • #9
                  Correct me if I am wrong but if 1 parent receives substantial amount of Gov Child Benefits.. are those not counted as income (and have to be calculated gross) to determine Special expenses?

                  Comment


                  • #10
                    Nope. You can argue she can use those funds to pay for stuff but they make no difference and are not considered income.

                    Comment


                    • #11
                      but that should be considered: To determine a specific amount for each special or extraordinary expense, you will need to consider any subsidies, benefits or income tax deductions or credits relating to each expense and your eligibility to claim these amounts.


                      This was taken from the justice website


                      This talks about UCCB... which is no longer.. but that used to count for section 7:
                      You may have deducted the UCCB when you used Worksheet 1 to calculate your annual income. You can do that because the UCCB is not considered as income when you determine a child support amount. But when you calculate special or extraordinary expenses, you need to put back into your income the amount of UCCB received for the child whose expenses you are calculating. Write the amount on this line.
                      If someone else in your household claimed the UCCB for that child for tax purposes, you should determine that amount and include it on this line.
                      If you are considering special or extraordinary expenses for more than one child living with you most of the time and for whom you receive the UCCB, add back in all UCCB amounts and enter the total on this line.


                      Originally posted by rockscan View Post
                      Nope. You can argue she can use those funds to pay for stuff but they make no difference and are not considered income.

                      Comment


                      • #12
                        Also found this: https://laws-lois.justice.gc.ca/eng/...5/page-20.html


                        Special or extraordinary expenses
                        3.1 To calculate income for the purpose of determining an amount under section 7 of these Guidelines, deduct the spousal support paid to the other spouse and, as applicable, make the following adjustment in respect of universal child care benefits:
                        • (a) deduct benefits that are included to determine the spouse’s total income in the T1 General form issued by the Canada Revenue Agency and that are for a child for whom special or extraordinary expenses are not being requested; or
                        • (b) include benefits that are not included to determine the spouse’s total income in the T1 General form issued by the Canada Revenue Agency and that are received by the spouse for a child for whom special or extraordinary expenses are being requested.
                        But I have to say that so many info out there that is not 100% clear...


                        Maybe I am not reading this correctly

                        Comment


                        • #13
                          Originally posted by Lolita123 View Post
                          Also found this: https://laws-lois.justice.gc.ca/eng/...5/page-20.html


                          Special or extraordinary expenses
                          3.1 To calculate income for the purpose of determining an amount under section 7 of these Guidelines, deduct the spousal support paid to the other spouse and, as applicable, make the following adjustment in respect of universal child care benefits:
                          • (a) deduct benefits that are included to determine the spouse’s total income in the T1 General form issued by the Canada Revenue Agency and that are for a child for whom special or extraordinary expenses are not being requested; or
                          • (b) include benefits that are not included to determine the spouse’s total income in the T1 General form issued by the Canada Revenue Agency and that are received by the spouse for a child for whom special or extraordinary expenses are being requested.
                          But I have to say that so many info out there that is not 100% clear...


                          Maybe I am not reading this correctly


                          The benefits and subsidies relate to tax deductions. Daycare and some sports activities are subject to tax deductions and some people are eligible for subsidies for day care.

                          For instance, a few years ago there was a tax deduction for sports activities. So that $100 (i think it was between 50-100) would come off the price of the activity before calculating the percentage.

                          Daycare would be the total price less any subsidy provided less the tax benefit then shared proportionate to income.

                          Baby bonus is not considered because it is different now and for some not even offered.

                          Comment


                          • #14
                            If you’ve hit the point where you’re arguing over a $100 tax benefit counting or not, it’s time to stop and give your head a shake. $100 of income in either direction is only going to have a negligible effect on section seven expenses.

                            To the OP - my ex and I averaged out incomes over the last three years (including the mat leave year), and then based section seven on a percentage of that average. It was my lawyers suggestion, so I’m not sure if there’s case law on it or not. It seemed fair to both of us.


                            Sent from my iPhone using Tapatalk

                            Comment


                            • #15
                              Child benefits are slightly more than $100. Think potentially thousands of dollars a year. Depending on your income level, they could represent a substantial total of your yearly income.

                              Comment

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