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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1  
Old 06-24-2022, 11:45 AM
Leszek Leszek is offline
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Default Ontario child support tables. Which tax year's income?

Hello,

I have a lot of questions but I need some basic understanding before I ask them. Ontario tables are simple to use and line 15000 on Income Tax is clear. What is not clear to me is how updates to child support are effected, given that income fluctuates somewhat each year.

Item 15000 is really only known when Notice of Assessment arrives. So we're already in late May. Given that FRO will not effect any changes without a Court order, we need to add some time for Court processing, so I think we arrive in late June. So what happens now?

I assume we change child support payments as of July using 15000 of the previous year. Between January and July, a lot can change. Salary can decrease or increase but the Total Income is not going to be known until the next year. So if we're using line 15000 it must be previous tax year.

If above is correct (child support payments are updated July 1st), then what happens to period January through June? Is there a lump sum catch-up amount paid in case Total Income is higher from previous update?

I understand that a lot depends on what Parties agree to but in order for me to understand the process, let's assume that Parties are not in agreement and decision is made for them.
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  #2  
Old 06-24-2022, 01:02 PM
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blinkandimgone blinkandimgone is offline
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A July update is fairly standard. If you update annually in July, it works out in the wash for the rest.
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Old 06-24-2022, 03:04 PM
rockscan rockscan is offline
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Blink is right but to expand on that advice...you can do this easily because we are going to tell you how!

Because you are with FRO you will need an updated order. You can get that quickly via a motion to change on consent. It's a 15C. So you tell your ex how much your line 150 is for 2021 and that you will draw up the paperwork to get it changed for her signature. You would then give her all the paperwork to sign, go to the courthouse and get a rubber stamp. As part of that filing you will say the amount will change as of July 1. You can start paying FRO on July 1 the updated amount and then they will calculate what you owe when they do the paperwork. They will take that money from the account you pay into.

If your ex doesn't agree with that, you will still need to file a motion to change, it will just take longer to get through the courts. If she's smart, she will simply agree and move on.

As for the other stuff, it doesn't really matter what your changes are unless it's a major change that needs to be done immediately. For instance, you were earning 100 grand a year and lost your job and went to 25 grand a year. Then you would want an immediate change but if your ex doesn't agree, it will take court. Or if you go from 50 grand to 100 grand, you could agree and do a motion immediately. For people who make more money in January versus July, it all evens out in the end so it's the whole year of income they consider.

Because you are with FRO, it's difficult to change on a dime so you should go with the average which is your NOA line 150 each year.
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Old 06-24-2022, 04:25 PM
Leszek Leszek is offline
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Hm...

Let's consider this example with made up figures for easy consideration. The assumption is that child support is to be updated on July 1st. Please focus on numbers to explain the proper calculation. This is a totally made up example to understand how item 15000 should be used.

Year Income
2019 50K
2020 100K
2021 75K

What child support should I have paid in 2020?
a) 6 months of 50K base + 6 months of 100K base?
b) 12 months of 100K base?
c) Otherwise?
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Old 06-24-2022, 04:30 PM
rockscan rockscan is offline
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Default Ontario child support tables. Which tax year's income?

No it catches up each year. It works out in the end. You are overthinking it. The amount that should have been paid in 2020 would have been the 2019 income.
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Old 06-24-2022, 06:20 PM
Leszek Leszek is offline
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I am not overthinking. I need to know the answer to this, regardless of the fact that it catches up eventually. I was rushing to meet an FA and I realize I made a mistake in my post @4:25PM. I can't edit it, so I'll repost my question here.

Year Income
2019 50K
2020 100K
2021 75K

What child support should I have paid in 2021?
a) 6 months of 50K base + 6 months of 100K base?
b) 12 months of 100K base?
c) Otherwise?
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Old 06-24-2022, 07:25 PM
rockscan rockscan is offline
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B twelve months of 100k which is what you earned in 2020.
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Old 06-25-2022, 01:13 AM
Leszek Leszek is offline
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Why is that the case?

For January to June of 2021, I would have still been paying child support set for July of 2020 which would have been based on 2019 NoA and 15000 equal to 50K. Then from July to December of 2021, I would have been paying child support set for July of 2021 which would have been based on 2020 NoA and 15000 equal to 100K.

Are you saying that FRO would have called me in July of 2020 to tell me I need to make aa equalization payment for the period of January though June?
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Old 06-25-2022, 09:36 AM
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No because you are paying based on the previous years income. It equals out by December. Thats how the tables work. Regardless of whether you earned the most money in the end of the year or not, you still earned that money the previous year so you pay based on that income.
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  #10  
Old 06-25-2022, 08:22 PM
Leszek Leszek is offline
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Rock, how can January 2021 child support payment be based on income in 2020 when item 15000 of 2020 income is only known in May 2021 when NoA arrives..?
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