Principal Issues:
In general terms, subsection 60.1(3) of the Act (paragraph 56.1(3) of the Act is the converse of this provision) may result in the deduction of payments made before the date of an order or agreement where the date of the order or agreement is post-April 1997. However, where an agreement or order, made after April 1997, varies a child support amount payable from the last payment made before May, 1997, the day on which the first payment of the varied amount is required to be made is considered to be the "commencement day". (If there is a commencement day, child support payments payable on or after that day would be tax neutral - no deduction and no income inclusion)
The issue is whether there is a commencement day in respect of two examples.
In the first example, H paid C $300 a month is child support from September, 1996 to May, 1997 inclusive. In June, 1997, H increased the monthly payment to $400. H and C signed a separation agreement on October 15, 1997, which recognized the previous payments and increased the monthly child support to $500 starting on November 1, 1997.
In the second example, R and M separated in 1996. One of the two children lived with R and the other child lived with M. Before their court order was made on October 8, 1997, R paid M monthly support of $500. The court order grants custody of the two children to M. It also recognizes R's previous payments for the one child and requires continuing monthly support for both children of $500 (effective as of the date of the court order).
Position:
In the first example, the commencement day is June of 1997. In the case of the second example, the commencement day is October 8, 1997.
Reasons:
