26 May 1997 External T.I. 9703225 - new child support guidelines, apply to common-law?

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:

application of new child support laws to common-law couples. Queries appear to relate primarily to non tax issues (such as amendments to Divorce Act mean that payment schedules do not apply to common-law situations etc.)

Position:

Referred to Department of Justice and provides general commentary only

Reasons:

		970322
XXXXXXXXXX	Sandra Short

May 26, 1997

Dear XXXXXXXXXX:

Re: Application of New Child Support Guidelines to Common-law Relationships

This is in reply to your letter of February 4, 1997, concerning the application of the new child support provisions to common-law relationships. We apologize for the delay in replying to you.

You have asked whether former common-law couples can apply for an increase or decrease to the amount of child support payable after May 1, 1997, to reflect the amounts in the new Child Support Guidelines. You have also queried whether a provincial judge can award support payments which exceed the amounts outlined in provincial or federal legislation.

Our Comments:

Bill C-41, legislation to amend Canada's child support system, received Royal Assent on February 19, 1997, and came into force on May 1. The legislation provided for amendments to the Divorce Act, the Family Orders and Agreements Enforcement Assistance Act, the Garnishment, Attachment and Pension Diversion Act, and other statutes. A number of new income tax rules relating to child support payments were introduced as a result of the Child Support Initiative as well. The income tax amendments were passed into law on April 25, 1997.

Revenue Canada is able to provide you with information on the income tax changes component of the child support initiative only. We would suggest that you contact the Department of Justice at 1-888-373-2222 to obtain information which is not tax-related, such as the authority of provincial court judges to award amounts which exceed amounts in the Child Support Payment Schedules, and whether the Payment Schedules are applicable to common-law situations. Jennifer Lang is a contact in the Justice Minister's office, who may be reached at (613) 992-4621.

Income Tax Amendments relating to Child Support Payments:

The basic thrust of the new child support provisions in the federal Income Tax Act (the Act) is to eliminate both the requirement to include child support in the custodial or recipient parent's income and the deduction available to payers of child support. The new rules apply to agreements or court orders made on or after May 1, 1997. The new rules do not apply to child support awards made before May 1, 1997 unless:

(1)the parties increase or decrease the amount of child support to be paid by amending the written agreement or court order after April 30, 1997,

(2)the order or agreement specifically provides that the new tax rules will apply after a specific date (no earlier than May 1, 1997,) or

(3)the parties both sign and file an election with Revenue Canada agreeing that the new tax rules will apply to the existing order or agreement after a specified date (no earlier than May 1, 1997).

The Act defines the term "spouse" to include both legally married individuals and common-law spouses. Generally, "spouse" includes a person of the opposite sex who has cohabited in a conjugal relationship with a taxpayer for at least twelve months or who is a parent of a child of whom the taxpayer is also a parent.

The definition of "child support amount" means any support amount that is not identified in the agreement or order under which it is receivable as being solely for the support of a recipient, who is a spouse or former spouse of the payer, or who is a parent of a child of whom the payer is a natural parent.

The definition of "support amount" means an amount payable or receivable as an allowance on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and children of the recipient, if the recipient has discretion as to the use of the amount and the conditions of either (a) or (b) (below) are met.

Condition (a) requires that the recipient be the spouse or former spouse of the payer, that the recipient and payer live separate and apart because of the breakdown of their marriage (includes common-law marriages, see defintion of spouse above) and that the amount be receivable under an order of a competent tribunal or under a written agreement. Alternatively, condition (b) requires that the payer be the natural parent of a child of the recipient and the amount be receivable under an order made by a competent tribunal in accordance with the laws of a province.

We trust our comments will be of assistance to you.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch