31 August 2000 Administrative Letter 2000-0037072 - CHILD TAX BENEFIT - SUMMER

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Can a parent who has the children for a summer month (visitation rights) claim the child tax benefit?

Position TAKEN:

No

Reasons FOR POSITION TAKEN:

Vacationing rather than residing
No legal custody

		August 31, 2000

	Appeals Directorate	HEADQUARTERS
	Headquarters	C. Tremblay
		957-2139
	Attention:  Lata Agarwal
		2000-003707

Child Tax Benefit ("CTB") for the Summer Vacation

This is in reply to your memorandum of July 10, 2000, requesting our views on whether a parent who resides with his or her vacationing children is eligible for the CTB payments during those months. In your opinion the words "at that time" found in the definition of "eligible individual" in section 122.6 of the Income Tax Act (the "Act") could be interpreted to apply to the vacation period during which the taxpayer took full care of the children. You ask us for our views.

In your letter you summarize the following facts:

XXXXXXXXXX, the taxpayer, is the natural mother of the XXXXXXXXXX children, XXXXXXXXXX. The children have lived with their father, XXXXXXXXXX and stepmother XXXXXXXXXX since XXXXXXXXXX. The children lived with the taxpayer from XXXXXXXXXX. The natural mother applied for and received the CTB for the above-mentioned period of time during which she took full care of the children. The stepmother subsequently contacted the Canada Customs and Revenue Agency (the "Agency") and upon further examination of her claim, the taxpayer was denied the child tax benefit. The taxpayer has objected to the Agency's denial of the benefits during the vacation period. The taxpayer is a disabled person and the major source of her income is from a CPP disability pension.

TAXPAYER'S POSITION:

Pursuant to a court order dated XXXXXXXXXX, she received custody of the children for one month. During the month she took full care of them and was not compensated for amounts spent on them. She believes that she is entitled to the CTB for that month. She has also mentioned that the same situation is going to happen for one month every summer in subsequent years.

APPEAL BRANCH'S OPINION:

In your opinion, the words "at that time" contained in section 122.6 of the Act, could be interpreted to apply to the vacation period, during which the taxpayer took full care of the children. Alternatively, it could be applied from the beginning of XXXXXXXXXX to the end of XXXXXXXXXX, if the legislation/policy is not in favour of prorating a month's benefit.

Our Comments

The preamble of the definition of "eligible individual" in section 122.6 of the Act states that -"eligible individual in respect of a qualified dependant at any time means a person who at that time...". Accordingly, the determination of "eligible individual" can be made at any time. In order to be eligible for the CTB, a taxpayer must reside with the qualified dependant and be the individual who primarily fulfills the responsibility for the care and upbringing of the dependant at that time. When the dependant resides with the female parent, that parent is presumed to be the person who primarily assumes the responsibility. However, this presumption will not apply where any of the circumstances listed in subsection 6301(1) of the Income Tax Regulations (the "Regulations"), such as in the situation at hand, where there is a disagreement among the parents as to who is the "eligible individual". Thus, it is necessary to determine who primarily fulfills the responsibility for the care and upbringing of the children "at that time".

Section 6302 of the Regulations lists factors to be considered in determining what constitutes care and upbringing of a qualified dependant. In our view, responsibility for care and upbringing can only be provided by custody rights and not visitation rights.

Where a parent, among other things, fulfills the criteria set out in section 6302 of the Regulations, that parent is the "eligible individual" at that time. In our view, for the purposes of the CTB, the determination of who is the "eligible individual" in respect of a qualified individual is made at the beginning of the month as is contemplated by subsection 122.62(1) of the Act. There is no provision that would allow a month to be prorated.

In our view, where qualified dependants vacation with their other parent for a summer, that parent is not an eligible individual. The content and nature of the court order must be considered and the parent should show that he or she has custodial rights rather than simply visitation rights for that period. In the case at hand, the XXXXXXXXXX court order only grants the mother a summer access visit, which would not appear to be custody. Accordingly, she would not be an eligible individual for the purposes of the CTB.

You refer us to two 1999 informal procedure court decisions that support the view that the CTB can be split during the year. The judgments awarded the CTB to the female parents who were considered to be primarily fulfilling the responsibilities of the care and upbringing of the children during the two summer months. In both those cases, the female parents were able to establish that they had custody of the children during the period. Accordingly, in our view, the position from the Benefits Program Directorate, stating that a parent will not normally be considered eligible for the CTB when a child resides with them for a period of time which is temporary, i.e. a vacation, should be maintained, unless the parent has legal custody rather than simply visitation rights during the one or two month period.

Roberta Albert, CA
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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