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.
Principal Issues: 1. Is non-payment of support payments considered an income loss to the recipient?
2. Can a government pension be effectively garnished for the arrears of support payments?
Position: 1. No
2. A question beyond the scope of ITRD
Reasons: 1. Legislation
2. Referred client to Service Canada and/or legal advice
XXXXXXXXXX
2012-044076
George A. Robertson, CMA
December 21, 2012
Dear XXXXXXXXXX
Re: Child Support Payments
This is in response to your March 13, 2012 letter requesting our views of child support payments. The details as presented by you are that the XXXXXXXXXX court order required your former spouse to pay you a monthly child support amount that is now in arrears for approximately XXXXXXXXXX years. You would like to know if non-payment of support payments can be considered as an income loss to you and can the arrears of child support be effectively garnished from your former spouse's government pension?
Written confirmation of the tax implications inherent in particular transactions may only be provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. This Information Circular and other Canada Revenue Agency (CRA) publications can be accessed at www.cra-arc.gc.ca. We offer our general comments.
Guide P102, Support Payments, indicates that support payments received or made for a child or spouse or common-law partner under a court order or written agreement made before May 1997, are taxable to the recipient and deductible by the payer [Emphasis added]. Where these taxable support payments are not received you do not have to report them as income on your tax return. There is no further mechanism under the Income Tax Act to allow for an apparent loss of income to the recipient from unpaid support. Lump sum payments that are for the periodic payments that have fallen in arrears would remain as support payments. Additional comments relating to the support payments can be found in Income Tax Interpretation Bulletins: IT-530R, Support Payments.
Your query on a garnishment type arrangement of your former husband's pension [presumably, the Canada Pension Plan] should be addressed to:
Service Canada
P.O. Box 1177, Station CSC
Victoria BC V8W 2V2
The Service Canada web site may also be of assistance. www.servicecanada.gc.ca/. You may wish to seek legal advice in your endeavour to seek the payment of the arrears of child support.
Yours truly,
Sharmini Ratnasingham
for Director
Business & Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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