30 September 1994 Internal T.I. 9421806 - SUPPORT PAY TO CHILDREN'S AID SOCIETY

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:

whether child being maintained by Children's Aid Society can be claimed as a dependent (in the years 1990-1992) by the father who was required to make monthly support payments to the CAS.

Position TAKEN:

It is a question of fact whether a child is dependent upon an individual for support. The Children's Services Act for N.S. appears to take the position that a child will be maintained by the appropriate agency with or without the financial support of a parent or other individual but that if a parent is financially able to contribute towards that child's care, that parent will be required to do so. Therefore, it is difficult to conclude that the child depends on the parent for that support when in fact the child will be cared for to the same extent without payment of that support. On the other hand, the parent may be otherwise providing support to the child and the child may be dependent upon the parent for the support given. Facts will determine whether parent is otherwise providing support and whether child is dependent upon that support.

Reasons FOR POSITION TAKEN:

meaning of "dependant" in 118(6)

			September 30, 1994

	Halifax District Office	Business and General
	Client Assistance	Division
			Sandra Short
	Attention:  Wenda Taylor	(613) 957-2136

			942180

Child Support Payments made to Children's Aid Society

This is in reply to your submission of August 24, 1994 which asks whether a dependant amount under paragraph 118(1)(d) of the Income Tax Act (the Act) may be permitted for the years 1990, 1991 and 1992 in the following situation:

1.Parents separated and children were placed in the custody of the mother. The older child ran away and was taken into the custody of the Children's Aid Society of Nova Scotia.

2.The Supreme Court of Nova Scotia ordered the father to pay child support to the Children's Aid Society. The amount of the support was

XXXXXXXXXX

The father made all required payments.

3.You have been advised that the father was not eligible for the Family Allowance payment as the child did not reside with him in 1990, 1991 or 1992. Your records indicate that neither parent received a family allowance for the child in question in any of the years in question.

"Family allowances" were paid under section 3 of the Family Allowances Act and were payable in respect of children who were cared for by their parents or persons in loco parentis. Payments referred to as "special allowances" were paid under section 9 and were paid in respect of children who had been taken into care by provincial authorities and generally living with foster parents. The Family Allowances Act treated "family allowances" quite separately from "special allowances" and section 12 of that Act exempted "special allowances" from income tax under any Act of Parliament.

We have assumed for the purposes of our reply that the Children's Aid Society of Nova Scotia received the "special allowance" in respect of the child in its care for 1990, 1991 and 1992 which assumption appears reasonable given the facts presented above. Paragraph 118(4)(d) of the Act provides that no tax credit under paragraph 118(1)(d) may be claimed by an individual for a dependant in respect of whom a family allowance described in subsection 56(5) has been paid in the year, except to the extent of the proportion of the family allowance paid in the year in respect of the person that has been included in the individual's income for the year. If our assumption about the payment of "special allowances" to the Children's Aid Society is correct, then it may be concluded that no family allowance as described in subsection 56(5) of the Act was paid in the relevant years in respect of the child in question. As a result, the father is not precluded from claiming a dependant child amount for the years 1990 to 1992 because of the provisions of paragraph 118(4)(d) of the Act. Further, it is our view that the father would not be required to include the special allowances into his income by virtue of subsection 56(5) of the Act in order to be allowed an amount under paragraph 118(1)(d) as it read in the years in question if he otherwise qualified for such amount.

As you are aware, subsection 118(6) of the Act defines a "dependant" for the purposes of paragraph 118(1)(d) as "a person who at any time in the year is dependent on the individual for support and is...the child...of the individual...". It is a question of fact whether a child is dependent on an individual, in this case the father, for support.

We have reviewed the Children and Family Services Act, S.N.S. 1990, c.5 and its regulations to determine whether the care or care and custody, as the case may be, provided by the Children's Aid Society is in any way conditional upon a parent's or other individual's payment of support to the Society. A review of sections 71 and 72 of this Act shows that a parent or other person liable under the law for maintenance of a child may be ordered to pay maintenance costs for maintaining a child pursuant to the Children and Family Services Act if that parent or other individual has sufficient means to provide that support. That same individual may, in the event of default of payment, be pursued through avenues available through the Children and Family Services Act or the Family Court Act. However, it does not appear that a child's care or care and custody provided by the Children's Aid Society would cease upon failure of the parent or other individual to provide maintenance to the Minister of Community Services or to the court for payment to the Minister. In other words, we do not believe that it can be said that a child, whose care and custody is being provided by the Children's Aid Society, can automatically be said to be dependent upon the parent making maintenance payments to the Minister of Community Services or to the court for that support.

Having said the above, we recognize that a child may be dependent upon more than one individual for support, that a child need not be in the custody of a parent in order to be dependant upon that parent for support and that support given and depended upon by the child may be non-financial. We do not have enough facts to determine whether the father could otherwise be considered to be providing support to the child in question (such as assuming the care and support of the child over holidays, extended visits and such) or whether the child could be considered to have been dependent upon him for this form of support but trust that the above comments provide sufficient assistance to enable you to make a determination once all the facts are made available.

P.D. Fuoco
Section Chief
Personal and General Section
Business and General Division
Rulings Directorate
Policy and Legislation Branch

c.c.Wayne Rowsome

Ministerial Correspondence
Client Assistance Directorate