4 over 5 year plan

[Berner_Faith]

Just a question here...what happens in the 5th year? If you are going after his true income now of $124,000, in year 5 when he actually doesn't have an income, but rather is living off income that he has already earned, are you going to agree for his CS payments to basically completely drop because his true income at that time would be far less? Or are you going to double dip? Make him pay off the $124,000 now AND in year 5 request he pay off his past income?

[Nadia]

Thank you OrleansLawyer. I think a contempt motion (only after I have exhausted every possibility of trying to settle outside of court). But I could be wrong.

The paragraph in question states:

(a) "Commencing in 2009, on or before June 1st of each year, the parties shall exchange the following information with each other in order to determine any change in the quantum of child support being paid:
(i) Their income tax returns and notices of assessment for the previous taxation year;
(ii) A current paystub evidencing his or her gross annual income received to date in that year;
(iii) Any other documentation and information to review child support

(b) In light of these provisions, the parties shall readjust the child support payable retroactive (to January 1st of that year) to attempt to avoid the cost of an unnecessary court application. The parties shall adjust the amount of child support, effective January 1st of that year, by July 1st, based upon the gross annual income earned by the applicant father from the prior year.

(c) Should the parties fail to disclose the said information to one another in a timely manner, the defaulting party shall be liable to the other for her/his costs if a court application is necessary.

[Nadia]

Those are very good points Berner-Faith. I'm going to try and respond:

Over 5 years he would be receiving a total of 500,000, only 80% of what he should be receiving in real income (600,000). Had he chosen not to register on the 4 over 5 year plan. He voluntarily chose to have 20% of his income put aside into what I consider is essentially a savings plan so that he could take a year off.

Should he be paying less child support because he "elected" to only receive 80% of his total income over 5 years?

So, there would be no double dipping so to speak. He will be paying child support based on what he would have received in income had he chosen not to register on this 4 over 5 year plan.

[FightingForFamily]

IMO he is entitled to use this plan. Often these plans are used for enrichment and further education/training during the year off.

You are entitled to CS in the amount of his take-home pay for the 5 year period. His income will be slightly reduced each of these 5 years but you will continue to have regular income.

He did include the 4/5 plan in his documentation though it was not labelled correctly. He certainly hasn't been hiding it.

I don't really understand that he finally finished paying spousal support of 1500 and suddenly you turn around and slap him in the face of 1000 per month in section 7. Where the heck did that come?

With FRO garnishing 50% of his salary his assessment of being unable to afford to live or buy tires for his car is quite likely accurate.

With my salary of of 63k per year, paying CS and spousal, after deductions I make around 22k per year, which is MINIMUM WAGE. Thus I had a higher income when I was 17 working at Tim Hortons then I do now.

[OrleansLawyer]

Should he be paying less child support because he "elected" to only receive 80% of his total income over 5 years?

It would depend on his reasons for doing so. The onus is on you to show that he should be earning a higher income.

If his actions will reflect well on his future career ambitions or are otherwise reasonable, there is no guarantee the courts will impute an income to him above his line 150.

[Berner_Faith]

Nadia I understand what you are saying... but you have to look at the double dipping aspect... will it average out in the long run for you?

If this is a plan that is non-taxable income in the 5th year, then in reality he has no income in the 5th year and he would be entitled to a drop in CS... do I think he should be focusing on less CS...not at all... but you have to factor in if taking him to court is really going to be in your best interest, because if you want to go off his real income for the first 4 years, you can't then decide in the 5th year to change the rules because they suit you.

All I am saying if you are going to sent a pattern once you go to court and right now that pattern (using his real income 100%) works in your favour, but in year 5 his real income could be 0% or be the 20% he put away.

[Nadia]

Bernerfaith:

The income is tax deductable in the fifth year. There is no drop in income in the fifth year. As I explained earlier his annual income of 100,000 that he will receive in year five will be declared as income and appear on his NOA as it has done in previous 4 years. He is only paying tax on what he is receiving as income for year one through to four.

I am either doing a terrible job of explaining all this OR have it all wrong. This is how I see it:

Year one: receives 80% of his salary but earned 100%
Year Two: receives 80% of his salary but is earned 100%
Year three: receives 80% of his slary but earned 100%
Year four: receives 80% of his salary but earned 100%
Year five: receives 80% of his salary but earned 100% but doesn't go into work

The question is should he be paying for what he is earning over 5 years (including year five) or what he has chosen to receive in respect to a reduced salary?

But you are right, is it worth pursuing in court? To be honest, I have not decided.

[Berner_Faith]

How is he receiving 100% in the 5th year? If for 4 years he is putting 20% away, the 5th year he is really only receiving 80%, just like every other year?

[OrleansLawyer]

Year one: receives 80% of his salary but earned 100%
Year Two: receives 80% of his salary but is earned 100%
Year three: receives 80% of his slary but earned 100%
Year four: receives 80% of his salary but earned 100%
Year five: receives 80% of his salary but earned 100% but doesn't go into work

So, he receives 80% in year five but earns 0% due to not working, correct?

Berner's point is that, based on his earnings, you either get child support on 80% of his income for 5 years or child support for 100% of his income for 4 years and then 0% in the fifth year.

This would be based on his income, with any child support above that to require income to be imputed to him (either every year or specifically the 5th year).

[sahibjee]

in addition to the $$$s there is another human side of things. this matter can be pursued in court and a favorable or unfavorable result can be earned. things may be sour now but should one really bring things to the level where the two cant even talk to each other on such trivial matters?

its a matter of careful calculations but since i have not been there my calculations may be wrong, yet with the amounts being received quoted above, i dont think raising 3-4 kids without any financial contribution from the CP should be a problem.

remember that slavery was once 100% legal in this country it was the LAW!. just because the law is unreasonable it does not mean you have to be too.

[sahibjee]

With my salary of of 63k per year, paying CS and spousal, after deductions I make around 22k per year, which is MINIMUM WAGE. Thus I had a higher income when I was 17 working at Tim Hortons then I do now.

I can see that happening with 100% validity as i am not far off myself, the only difference is my ex-lawyer successfully argued a spousal support which was at least 50% less than the minimum at SSAG.

here was his argument, may be others can use it too

"my client has to pay his criminal lawyer $XXXX.xx" per month, after paying the crim lawyer he is loaning $XXXX.xx/m for his own living. if he does not pay the criminal lawyer, the lawyer leaves him. then he cant defend against the criminal charges and goes to jail, in which case not only spousal but also the child support will terminate. therefore no spousal support should be ordered until the disposition of criminal charges"

in addition to above what also worked in my favor was that I started paying CS the day we broke up, well before the ex filed an application in court, as well as her rent for until two months after her filing the application, the judge really commended these actions.

yet after paying all those amounts i am in a sload of loans per month.

[Nadia]

Sorry Berner Faith,

I think this might be more accurate:

Year one he is receiving 80% (100,000) of his salary but IF he was not registered on the plan would be receiving 100% around $124,000

Year two he is receiving 80% of his salary but IF he was not registered on this savings plan he would be receiving 100% around 124, 000

Year three he is receiving 80% of his salary but IF he was not registered on this plan would be receiving around 124,000

Year four he would be receiving 80% of his salary but IF he was not registered on the plan he would be receiving 100% i.e. 124,000

Year five he would be receiving 80% of his salary but IF he was not registered on the plan he would be receiving 100% i.e.124,000

The question is - is it reasonable to expect him to pay child support in line with what he would have been receiving if he was not registered on this savings plan?

Registration on the plan is not mandatory and is voluntary. He decided by choice that he would take a reduced pay check but does that mean he pays less child support?

I am basing this on what "mess" said several posts ago.

The situation would be different, if for example he was forced to switch jobs and income dropped or he was laid off. Of course child support should be reduced to match what the income is. BUT he is choosing/electing to have a reduced salary.

Look at this way: The employer is giving him a choice. They are saying, (a) hey buddy you can get 124,000 (your full salary) every year or you can register on a 4 over 5 year plan where you get a paid/self funded sabbatical in your fifth but only get paid 80% of your salary for 5 years.

In respect to whether it is worth pursuing. I don't know. It all depends upon his financial situation. If as he is claiming, that he is already finding it difficult to make ends meet and is relying on his line of credit to pay off credit cards, I am not sure why he is on the plan in the first place. If he is already in arrears for child support, how is increasing the level of child support going to help any but just continue to accumulate more arrears.

[Mess]

sahibjee, please don't pull the thread off topic. Nadia has a legitimate question. You may start your own thread if you don't want to help her.

[Berner_Faith]

I understand what you are saying but lets put some other numbers to it...

An income of $124k for 3 kids (I thought I read somewhere you had 3 kids, sorry if this is not accurate) would warrant CS of $2222 per month or $26664 per year

An income of $120k for 3 kids would warrant CS of $1845 per month or $22140 per year...

Difference being $377 per month or $4524 per year... so it $4524 worth fighting over in court?

Now in the long run, over 5 years that works out to over $22k... however is an extra $4500 a year, as important to you as lets say a good working relationship with your ex?

You are getting a large amount of CS (if you have 3 children), which should be more than enough to cover what needs to be covered plus some.

People are entitled to take vacations, he just so happens to have a job that is allowing him a year off, but still basically getting paid... he could just as easily take his vacations throughout the 5 years and not get paid, which would reduce his income.

Fact being, he is not living off of $124k per year, he is living off of $120k, which is what his CS should be based on. He is not hiding income, in which point imputing would make sense, he is simply saving...

May I ask why if you are receiving over $2000 a month in CS, plus $1000 in Section 7, why you would even fathom taking this to court? You are basically getting $36K per year, which is more than I make in a full year, and I work full time at 50 plus hours a week.

[Nadia]

I do not have 3 kids. I have two. I have never stated I have 3.

I am not receiving 2000 in Child Support.

According to our court order which is based on his 2008 income I am supposed to be receiving 1400. I am receiving 1089 in Child Support.

The additional 1000 is for special section seven expenses for a child with special needs who requires a specialized program. I am paying 1500 towards the specialized program. And no I do not earn anything close to what he is receiving as a reduced salary.

The year off would be in addition to regular vacation time.