Ex runs home daycare (net income calc for support?)

UPDATE: Nothing has been finalized, no financial statements from ex yet, Ex still believes because of the home business she runs that child support is all based on her net income.

With that said, I did receive the first bi-weekly cheque for child support which she is paying in the interim until this is all settled either through mediation or court. If I reverse input the numbers in the calculator the EX is basing it off a salary of under $13,000 a year!

FYI:
In the EX's area Daycare costs are:
$40.00 a day, times 5 kids allowable, times 5 days a week gives her a potential gross salary of $52,000.

I am hesitant to use a mediator because I would be paying half of the mediation bills and I have a hard time believing that a mediator will be able to convince her that she is going against the Fed Child Support Guidelines and that her interpretation of everything is false. You would think that a simple quick internet search on her part should be enough to make her realize that she is wrong. So In your opinion, if this went to court, how likely would my chances be if I request my court costs to be covered?
 
You have to be careful that your figures are correct. You are calculating on a weekly basis. Many people take a few weeks off during Christmas as well as a vacation. You should therefore alter the gross amount to reflect that. She will be allowed some consideration for use-of-home expenses, but not necessarily what CRA would allow. The more accurate you can be with your own figures the better your argument in court. Think "business operating expenses" - which she would have to pay whether or not she operated her business from home or not.

If you do the math correctly then I do not see why you would not be successful. Matters such as these rarely end up in court and are settled. You could look at decisions from your local jurisdiction and see what sort of costs are awarded. I know I was quite surprised in my area to learn that costs, when awarded, are typically very small and did not come close to covering legal costs. In Alberta, at the back end of the Rules of Court, there is a schedule which shows amount judge awards in costs. I don't know if you have the same information where you live.
 
I believe to Arabian's point there is some tax guide information about how the government tracks home daycare business. Just like how servers can't get away with claiming 0$ in tips on their taxes... I think there is an expectation of income for a daycare that they use for tax guidance.
 
arabian said:
Many people take a few weeks off during Christmas as well as a vacation. You should therefore alter the gross amount to reflect that. She will be allowed some consideration for use-of-home expenses, but not necessarily what CRA would allow. The more accurate you can be with your own figures the better your argument in court. Think "business operating expenses" - which she would have to pay whether or not she operated her business from home or not.
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Hold on here now.....In the Ottawa area, at least, 99% of daycare locations charge on a school year basis and then on a summer (per week used basis). The school year is normally charged in full including weeks the client takes for vacation and xmas holidays. Even if the provider takes a week off the client is charged.

As far as wright-offs......The % of space used in the house against interest on mortgage and utilities. Cost of food for lunches, minor repairs around house. Insurance, advertising.....and maybe car costs.

Based on write offs, summer time vs school time and number of clients fluctuating throughout the year....I through a dart of approx $35,000/year net estimate. $40,000 if she really does well...and pushes the business.
 
I would meet with other daycares in town pretending to be interested in their services and see what their rates and policies are. Meet with 2 or 3, and note down what they told you and compare to what your ex is saying claiming.
 
Very good points. I know she does make the parents sign a daycare contract. Might be worth getting a copy of it. I also know 1 week of her 2 weeks are paid holidays, as is all time off at Xmas. Newfie is right, the daycare's in the area have pretty solid contracts to ensure the parents secure the child's spot.

Here is my plan and please let me know if I am making a mistake.

Once I get her 3 years of financial info, I will use the Fed Gov't work sheets and do my own assessment of each year of what her gross should be. This would be removing all tax deductions strictly attributed to the daycare such as (food for children, advertising, business insurance, arts supplies) based on receipts or Provincial averages for these types of deductions.

All tax deductions that I will be adding back into her salary (mortgage interest, insurance, car payment interest, gas, utilities, home and auto repairs) will be added back in with the top of rule. Meaning for every dollar that gets added back into her salary gets topped up with what ever percentage of tax bracket she is in.

Once done I will then provide her with a copy of everything I have calculated to show her how I got to these gross incomes for the past 3 years.

So here is where it gets a little confusing for me. I know how to calculate the off sets as we each have 1 child full time. At the moment I am still paying full table support for both children and she is paying me support based on her net income of about $13,000. The support I have received from her is less that $150.00 a month

So, do I go ahead and adjust the child support I am paying her by subtracting the amount she should be paying me based on the gross salary the Fed Gov't work sheet provided me and let her deal with it if she has an issue? Or do I have to continue paying full table support for both children until this is all settled.

My concern is that this wont be settled for some time if this goes to mediation or court and paying $1,800 a month in full table child support while receiving less than $150.00 a month in return makes it difficult to properly support the child I have, not to mention she is still receiving the child tax benefit for both children.

Trying to keep this away from lawyers or the courts so I am open to all advice on if this is how I should proceed.
 
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You need financial disclosure, particularly to show that she is charging 40.00/day (she may be charging 30.00/day).

I guess what your asking is if you proceed with self-help measure (rather than waiting for direction/Order of the court)? If you do proceed with self-help I'd make sure you squirrel the difference away in the event that you are unsuccessful. On the other hand, it may be unlikely that she be ordered to reimburse you the over-payment and even if she was it may be difficult to collect (there are threads on this forum about whether or not it is permissible to simply deduct what one party owes the other party from current payment).

Make sure that your figures are realistic - how much money does it cost to feed 5 children 5x week? Don't forget to add in "sundries" such as diapers and other supplies... cleaning products.

When she balks at it, offer a carrot ... allow utilities?
 
might be interesting to find out if she applied for and received any government business grants to open the daycare (they are available). If so, she would have likely had to provide a business plan. This business plan would be invaluable to you.
 
arabian said:
You need financial disclosure, particularly to show that she is charging 40.00/day (she may be charging 30.00/day).

I guess what your asking is if you proceed with self-help measure (rather than waiting for direction/Order of the court)? If you do proceed with self-help I'd make sure you squirrel the difference away in the event that you are unsuccessful. On the other hand, it may be unlikely that she be ordered to reimburse you the over-payment and even if she was it may be difficult to collect (there are threads on this forum about whether or not it is permissible to simply deduct what one party owes the other party from current payment).

Make sure that your figures are realistic - how much money does it cost to feed 5 children 5x week? Don't forget to add in "sundries" such as diapers and other supplies... cleaning products.

When she balks at it, offer a carrot ... allow utilities?
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I am not following. If she is supposed to be paying (say $550.00 a month) and is only arbitrarily paying about $140 a month and say this drags on for another 6 months.
That $2460 that has been shorted on child support over 6 months could potentially not be owed on her part?
Collecting it would be easy as far as I am concerned. I would just reduce the amount of off set child support I would pay her until its paid up.

I am currently waiting on the financial disclosure and will use those figures unless some of the deductions are not inline with provincial norm's. For example, during our first mediation when we separated she tried claiming $15 a day per child for food.

As far as the other stuff, $40 a day is actually on the low end here in Ottawa. No sundries are provided by the daycare. The parents are responsible for most of everything. A snack, lunch and snack are provided which if I am not mistaken would cost about $6 per child per day. I do understand that usage of toilet paper, tissues and such increases with a daycare.
 
arabian said:
might be interesting to find out if she applied for and received any government business grants to open the daycare (they are available). If so, she would have likely had to provide a business plan. This business plan would be invaluable to you.
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Sadly no...we were together when she started the daycare. I will try to get a copy of the daycare contract though.
 
The day care contract will be important. Most day cares still require payment for sick days and vacation. They can get away with it because there is a shortage of in home day cares.

I would think that you could reasonably subtract food and utility costs as well as proven supplies costs. These will depend on the contract though too. My siblings are required to provide milk, two snacks, kleenex, cleaning supplies and all diapers and related changing stuff to their daycares. What she subtracts for revenue canada is not necessarily allowed for these businesses. Keep in mind too the government changes to in home daycares. Ontario only allows five children limited to only two under two.

As far as shorting the cs while this is going on, she could file with an enforcement agency if you have an amount in your original agreement. That may backfire on you.
 
rockscan said:
The day care contract will be important. Most day cares still require payment for sick days and vacation. They can get away with it because there is a shortage of in home day cares.

I would think that you could reasonably subtract food and utility costs as well as proven supplies costs. These will depend on the contract though too. My siblings are required to provide milk, two snacks, kleenex, cleaning supplies and all diapers and related changing stuff to their daycares. What she subtracts for revenue canada is not necessarily allowed for these businesses. Keep in mind too the government changes to in home daycares. Ontario only allows five children limited to only two under two.

As far as shorting the cs while this is going on, she could file with an enforcement agency if you have an amount in your original agreement. That may backfire on you.
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Thanks Rockscan

There is no set amount in our separation agreement other than it says I am to pay table support for both children as I was an every other weekend father. This has changed now that one child lives with me and one with her.

By not adjusting the full table support I am paying her once financial disclosure is received and those numbers are known, Would I not be knowing and willingly jeopardizing the well being of a child in order to maintain a temporary status quo? Couldn't this also be a case of a parent disrupting another parents parenting time as well and attempting to alienate the other parent by simply holding out on amending support till the child has had enough and decides to move back in with the other parent because life is more financially supportive there? Its a stretch I know!

This is purely frustration at the system and not you fine folks!
 
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