Child Tax Benefit, does it offset Section 7?

My husband and I are dealing with this exact issue and heading to CC on Friday. His ex has never asked him for s.7 or daycare expenses. When we got her financials, she has received over $25,000 in tax benefits and CCTB over the past 4 years and is now wanting half of of the $16,000 in daycare and s.7 expenses from him. I too, searched exhaustively for case law but to no avail. She had been in a long term relationship with someone as soon as my husband and her separated and she never requested payment. Now that she is single she needs money. So I completely understand now the lawyers deception and cheating methods to get a settlement.
 
working it out

working it out

I just got off the phone with CRA and have the paper work in front of me.

COMPLICATED and sorry for the length.

I live in Manitoba, single parent and no new partner, my ex in Quebec with stay home wife and new child.
We are "joint" w me primary care/control etc.
We have been scratching out an order now for 10yrs. (Yes, 10 yrs!). My ex has avoided a final order which means his garnishiment would be updated to the correct amount. (His income 173,000)

So now with the end in sight my ex has now brought up my arrears for my tax benefits on my son.

My income (with 2 jobs) is about 45,000. My ex is at 173,000.
My ex is obligated for daycare/camps etc at 80% (total 1800.00/yr) as well as activities. W Activities he pays 100.00 per month (max 1200.00)

I do 2 tax returns one with child and one without. This year as with previous yrs the difference in claiming my son is $5.00. Along with cultural and physical activity benfit and daycare claimed with child.
I am getting 4705.00 and if I didnt claim my son 4700.00 (basically)
(I have provided this info in previous yrs)

Prior to this yr my ex found the return too little to bother with.

This yr, he has changed his mind and brought it up as outstanding owed to him.
Now how do i go about figuring out what he wants from this?
My net income is low DUE to tuition for myself, rrsps, and legal costs, plus I pay extra taxes etc. (I go to school as well when I can, and have been hoarding credits and rrsps to keep me at a lower tax bracket).


With CRA: they say he is not eligible. its based on my net income. its based on primary care for the child (me) and Quebec has diff programs/laws. he in fact would not be eligible to claim it even if i gave it to him.
If there is a squable over it...CRA will refuse to pay it out. They also made a mention of the male/female ratio on the call and in the infromation. I would need to authorize him to try to claim it or have it paid out to him as its not for his specific benefit but the childs. So CRA has made it very clear its not a perk BUT something that goes for the child.

I dont want to be stingy. I pay into my sons resps, insurances, and private school on my own, plus food, clothing, shelter, bdays, everyday LIFE.
But I dont feel he has a right to it BUT extra income for my son's benefit and his expenses.
Lawyer says to shut up about it. for me to document and provide what info i have and let him stew in it. (i have family wizard which keeps the uploads and posts) My ex doesnt bother reading it.

Am I wrong? and what would be fair in this situation?
Im worried that this will be brought up again one day when I claim arrears. (its inevitable). So im trying to be proactive.

Sorry for the length.
 
COURTISMYLIFE said:
My husband and I are dealing with this exact issue and heading to CC on Friday. His ex has never asked him for s.7 or daycare expenses. When we got her financials, she has received over $25,000 in tax benefits and CCTB over the past 4 years and is now wanting half of of the $16,000 in daycare and s.7 expenses from him. I too, searched exhaustively for case law but to no avail. She had been in a long term relationship with someone as soon as my husband and her separated and she never requested payment. Now that she is single she needs money. So I completely understand now the lawyers deception and cheating methods to get a settlement.
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I would think a settlement would be for the outstanding owed. parents ahve a financial repsonsbilty. its fine to move on...but the first child has to be taken care of.

Not sure if this pertains or not but what was the reason your partner wasnt paying these expenses in the first place?
Regardless of the governement money she received. I would think that the expenses for the child would be paid by both parents first.
Why would the parent with the child be footing the bill waiting for the govt money to arrive? Government doesnt replace the parents responsbilty. I would think that the government money is a perk to helping the childs betterment and circumstance, providing opportunity. Why would he get a discount off of what he needs to pay?
What would that have to do with the lawyer or his cheating methods in trying to get a settlement?
Im not sure I agree with this view.
 
Most agreements state one parent can claim the cctb uctb or whatever the equivalent to spouse is. I dont think thats what hes talking about. What he is probably talking about is his share of the benefits for s7 expenses like daycare etc. hes supposed to pay the NET COST of the expense which is the total cost minus the taxable benefit split proportionate to income. So if daycare is $1000 and the tax benefit is $200 that means you split the $800 proportionate to income. If hes been paying the split on $1000, you have to pay him back his share of the $200 you get back in taxes.

At least thats how Im reading this. Others who get the child tax credit can answer that one.
 
COURTISMYLIFE said:
My husband and I are dealing with this exact issue and heading to CC on Friday. His ex has never asked him for s.7 or daycare expenses. When we got her financials, she has received over $25,000 in tax benefits and CCTB over the past 4 years and is now wanting half of of the $16,000 in daycare and s.7 expenses from him. I too, searched exhaustively for case law but to no avail. She had been in a long term relationship with someone as soon as my husband and her separated and she never requested payment. Now that she is single she needs money. So I completely understand now the lawyers deception and cheating methods to get a settlement.
Click to expand...

I believe that your husband is responsible for daycare if it is or was necessary for the parent to be able to work. The fact that she didn't ask for it at the time or that she was in another relationship doesn't let him off the hook - he is still responsible for his child's expenses. His lawyer should have informed him of this at the time of divorce.

Other S7 expenses (e.g. extracurriculars) are different - if his consent was not obtained prior to the expenditure being incurred, he doesn't have to pay. (Medical expenses are also different - if the S7 involves necessary medical expenses, he's responsible for his share, even if the expenses were incurred a while ago). Bear in mind that he is responsible for the post-tax cost of daycare - if his ex claimed or could have claimed them on her taxes, the benefit she received by claiming them should be subtracted from the amount she splits with your husband.

I don't believe the CCTB offsets S7 expenses. It has the word "Child Care" in the name, but it's actually a universal benefit which everyone with children of the eligible age receives, whether or not they are paying for child care. The only things that offset daycare expenses are tax benefits or subsidies which are directly tied to them, such as the tax credit for child care expenses (not the CCTB) or subsidies for daycare.

Your husband's divorce agreement should contain direction as to who receives the CCTB. Some people split it, some people direct it to the person who has primary residence with the kids.

I don't envy you trying to sort out four years of unpaid child care and S7. I strongly suggest you hire an accountant, or make a lump-sum offer to his ex to settle the matter rather than spend lots and lots and lots of money on lawyers digging up the last four years.
 
Similar... And in middle of resolving university s7. Three years with lawyers, 20 grand in fees. Nowhere closer.

Shared custody, 50/50 for 2 youngest, oldest at uni. I pay full table as she doesn't break the floor for offset.

Ex has own business. Claims 6000 annual income. Every year. CRA does nothing. Remarried to a guy making 120 annual. My divorce order is so bad I have to go back to court to get the spousal dropped. Let's not get into why. Self represented, etc. etc. My question however is in relation to the section 7 and spousal support. When it comes to apportioning should not the spousal support be deducted from my income and added to hers? Have had various lawyers give me different answers on this and reading through the law it's not that clear to me
 
CCTB is separate from "net cost". The ex sounds like they got tax benefits for daycare which will come off the price (ie. Full cost of daycare = $20000, tax benefits total $10,000 therefore his portion is % of 10,000. Unless she also got subsidies, then you remove that amount from total). You should demand a full disclosure of all schedules of her tax returns. That will show what she claimed and what she was entitled to.

Not sure about the spousal income amounts. You normally take what her line 150 is to calculate incomes for determination of % share. I thought you had to claim SS on your taxes? Either way, the % for uni is calculated via line 150 income. Doesnt matter what her new partner makes. Plus you consider a portion of the expense to you kid which is "normally" 1/3 but partners lawyer said its still a grey area.
 
Well if you lol at references above it says to deduct spousal (not CS) in determined s7. Doesn't say to add it to receiving party for same purpose but yes on taxes this is what happens. I deduct she adds it to her income for taxation purposes.

Well aware new partner income matters not. Just that spousal normally ends when receiving party is self sufficient. I'd say 45 grand in support and settlement income and 120 grand from a new spouse applies. But I have to get the court to agree. I digress...

Yes the law is intentionally grey so that it perpetuates itself. As lawyers always say...'well if the parties can't agree you'll have to get in front of a judge for a ruling". Of course, at $500 an hour for the lawyer quoting this.
 
In that case depending on what your ex does, you might want to also look at imputing an income to her. Might make s7 expense calculation much easier.
 
Already done. Judge imputed 10k annual. Hilarious as doesn't break CS floor and likely less than she'd make on welfare. ECE teacher and likely make 25 or so but not worth a 20k court battle in terms of what I'd hope to recoup in CS. Anyway my my point.

Just a bit grey on where spousal factors in for percentage of s7 obligation.
 
Child Tax Benefit, does it offset Section 7?

Then your kid should be eligible for some government grants with moms income.

Get your SS issues figured out then deal with university. Youve got two battles going on.
 
Shared custody and my income high enough I think not. Thanks though.

Anyone know how SS gets factored into s7 percentage paid? I'm thinking like CRA fr income. Comes off my side and gets added to hers? So if SS 10k my income for s7 shows 10 lower and hers 10 higher?
 
dave9911 said:
Shared custody and my income high enough I think not. Thanks though.

Anyone know how SS gets factored into s7 percentage paid? I'm thinking like CRA fr income. Comes off my side and gets added to hers? So if SS 10k my income for s7 shows 10 lower and hers 10 higher?
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I've always thought it should be like that too, but as I understand it, kid stuff is always done before adult stuff. So CS and s7 proportion are determined based on your incomes, and THEN SS is determined. Something about how the kids' needs come first, and because CS is automatic and starts immediately, while entitlement to SS must be determined, sometimes at length.
 
Think you've confused what I'm asking. Been paying SS for 4 years now. Simply asking how that SS paid (and received) for her factors into s7 apportioning.

Example: Bob earns 80k and pays 10k in SS
Sue Earns 20k and received 10k in SS

Is the split of s7 then 80/20 or 70/30 or maybe 80/30? The law has crazier interpretations...

Thanks
 
Ss is taxable income to the recipient and a tax credit to the payor, so it is most likely it would be the 70/30 scenario above.

Eta: mysupportcalculator.ca does a reasonably good job of determining s.7 amounts for both in a variety of scenarios.
 
Actually, my support calculator specifically addresses this:

Special Expenses are shared between the parties "proportionately" which means that each pays his or her share of the net cost of the expense according to his or her income in relation to the combined incomes of the parties. For instance, if Self earns $80,000/year, and Spouse earns $20,000/year, Self is responsible for 80% of the net cost of the Special Expenses and Spouse is responsible for 20% of the net cost of the Special Expenses.

Any monthly spousal support paid/received by the parties must be deducted/included in each one’s income (as appropriate) and so will affect each party’s proportionate share of Special Expenses. For instance, if Self is paying Spouse spousal support of $1,154 per month (ie. $13,848 per year), Self’s annual income will be reduced to $66,152 and Spouse’s annual income will be increased to $33,848, meaning that Self will now be responsible for 66% of the net cost of the Special Expenses and Spouse for 34% of the net cost of the Special Expenses.
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blinkandimgone said:
Actually, my support calculator specifically addresses this:
Click to expand...

Hi Blink,

Thanks. I've been off here for a couple years so not sure what calc you're referring to. I'm interested in what stands up in court. Your example is what seems fair and reasonable for sure but my 6 plus years in the Family Law grinder have taught me that's often not relevant..
 
child tax benefit,ucb, determining section 7 expenses share

child tax benefit,ucb, determining section 7 expenses share

hi I have the same problem, wondering how the system determines the proportional share of section 7 expenses after tax credits. here are the numbers

ex has sole custody, I have access on alternating weekends

me: $49 664
ex: $44 256

Daycare: $12 800

ex: $7000 cctb, $ 1200 ucb

my question is how do they take the $7000, $ $1200 tax benefits into account for the yearly cost of $12 800 for day care in determining my proportional share of section 7 costs.

$12 800
-7000
-1200
= $4600 IS THIS NUMBER OF DAYCARE COSTS I SHOULD BE SHARING,? AS OF RIGHT NOW HER LAWYER IS SAYING I HAVE TO pay $500/MONTH FOR DAYCARE WHICH SEEMS REALLY HIGH

- SIDE NOTE THE EX HAS HER MOTHER BABYSITTING AND IS APPARENTLY CHARGING THE EX $250.00/WEEK FOR BABYSITTING, AND IS STILL CHARGING HER ON PAPER THIS RATE EVEN THOUGH OUR CHILD IS GOING TO SCHOOL FULL TIME KINDERGARTEN MON-FRI? QUITE THE SCAM THEY HAVE GOING, SEEMS LIKE TAX FRAUD, THEFT, STEALING TO ME.
 
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