8 February 1993 Income Tax Severed Letter 9234895 - Definition of Cohabiting Spouse for CTB—Jul 93 to Jun 94

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.

XXXXXXXXXX 923489
A. Humenuk
(613) 957-2134

Attention: XXXXXXXXXX

February 8, 1993

Dear Sirs:

Re: Definition of "Cohabiting Spouse"

We are replying to your letter of November 19, 1992 concerning the recent income tax amendments relating to the Child Tax Benefit and corresponding information provided in the 1992 T1 Guide for filing personal income tax returns.

Before addressing your questions, we wish to summarize the context under which your questions were posed.

Section 122.6 of the Income Tax Act (the Act) applies with respect to Child Tax Benefits (deemed overpayments of tax) that are payable after 1992. The amount of the benefit payable for a particular month is based in part on the income of the claimant and that of any other individual who can be considered a cohabiting spouse within the meaning of section 122.6 of the Act. For the first six months of a taxation year, the monthly benefit is based on the relevant net income or incomes for the second preceding taxation year and for the last six months of a taxation year, the monthly benefit is based on the relevant net income or incomes of the immediately preceding taxation year.

A cohabiting spouse is defined for the purpose of the child tax benefit as an individual who, on the relevant determination date, is the spouse of the claimant and who has not, by reason of a breakdown of the marriage or conjugal relationship, been living separate and apart from the claimant for a period of at least 90 days as of the determination date (the determination date is December 31st of the taxation year for which income amounts are being used in the calculation i.e for payments in the period July 1993 to December 1993, the determination date is December 31, 1992). This definition requires further explanation since Bill C-92 proposes to extend the meaning of the word "spouse" for income tax purposes, effective for 1993 and subsequent taxation years to include a "person of the opposite sex who cohabits at that time with the taxpayer in a conjugal relationship and

• (i) has so cohabited with the taxpayer throughout a 12 month period ending before that time, or
• (ii) is the parent of a child of whom the taxpayer is a parent

and, for the purpose of this paragraph (proposed paragraph 252(4)(a) of the Act), where at any time the taxpayer and the person cohabit in a conjugal relationship, they shall, at any particular time after that time, be deemed to be cohabiting in a conjugal relationship unless they were not cohabiting at the particular time for a period of at least 90 days because of a breakdown of their conjugal relationship;".

For the purposes of the child tax benefit payments to be made in 1993 and the early part of 1994, however, the above noted definition is further modified by the transitional measures which introduce section 122.6 of the Act.

Your first question concerns a couple who lived in a conjugal relationship throughout a 12 month period prior to a period of separation which lasted for more than 90 days. Subsequently, but before December 31, 1992, the couple reconciled. In your view, the parties to this relationship would be cohabiting spouses for 1992 for the purposes of the Child Tax Benefit payments to be made in 1993. You suggest that page 9 of the T1 Guide for 1992 conveys the opposite view.

The transitional rule which is the subject of your enquiry refers to the child benefits payable from July 1993 to June 1994 which are based on the relevant 1992 net incomes. As you have stated, individuals of the opposite sex who have cohabited in a conjugal relationship throughout a period of at least 12 months (whether or not immediately preceding the breakdown of the conjugal relationship), have subsequently lived separate and apart because of a breakdown of the relationship, and who have then reconciled before December 31, 1992 will still be considered to be cohabiting spouses for the purpose of the child tax benefit since in point of fact they are cohabiting on December 31, 1992. Note that for a couple who are legally married, there is no requirement that they live in a conjugal relationship for 12 months in order to be considered cohabiting spouses.

For child tax benefits payable from January 1993 to June 1993, an individual who is not a legal spouse of the claimant will only be considered as a cohabiting spouse if the individual is the parent of the claimant's child at the beginning of the month for which the payment is being made and the couple were not living separate and apart for a period of 90 days including December 31, 1991.

Your second question concerns the meaning of "parent" as used in the T1 Guide. The Guide states that a person must be the natural or adoptive parent of the child in order to be considered a parent for the purposes of the Act. However, the definition of parent in subsection 252(2) of the Act is the converse of the definition of child which is found in subsection 252(1) of the Act. In addition to a natural or legally adopted child, the definition of child also includes

• • a person who is wholly dependent upon the individual for support and of whom the individual has (or immediately before the child turned 19 years of age, had) in law or in fact custody and control
• • a child of the individual's spouse and
• • the spouse of child.

You have asked us to confirm that an individual will be considered as a parent of the child in a situation where one of the extended meanings of child apply in respect of the relationship between that individual and child. We agree that the definition of parent includes the extended definitions as noted above. In this regard, we suggest that the use of the word "adoptive" in the Guide was intended in the more general sense of the word and includes the extended meanings noted above.

Finally, you ask if these comments are equally applicable for the purpose of the GST tax credit. The proposed amendments in Bill C-92 to section 122.5 will amend the definition of "qualified relation" to include a cohabiting spouse within the meaning of section 122.6 for the purpose of the GST tax credits payable in 1993 and subsequent taxation years.

We have advised the Directorate responsible for publishing the annual Guides of your comments.

We trust our comments will be of assistance to you.

Yours truly,
J.A. Szeszycki
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch

• c. c. Norm O'Donnell, Acting Chief T1 Returns and Guides Client Assistance