Federal Government Announces New Tax Changes for Families with Children

In October 2014, the federal government announced some budget changes that will affect families with children.  Here is a summary of some of the changes:

The Family Tax Cut (2014 and subsequent tax years)

Couples with a dependent child under 18 years of age may transfer up to $50,000 of taxable income from the higher income earning spouse to the lower income earning spouse. The maximum tax savings is capped at $2,000.

This would not apply to separated or divorced couples unless they have repartnered. If both parties have repartnered, a child in shared custody could potentially mean both new families could take advantage of this tax savings.

Child Care Expense Deduction (2015 and subsequent tax years)

The child care tax deduction is being increased by $1,000. Therefore, the tax deduction increases to:

  1. $8,000 per child for children under 7 years of age;
  2. $5,000 per child for children 7 to 15 years of age, inclusive; and
  3. $11,000 per child for disabled children.

Children’s Fitness Tax Credit (2014 and subsequent years)

The amount of program fees eligible for a federal non-refundable fitness tax credit for children engaged in qualifying activities doubles from $500 to $1,000 per child. In 2015, this tax credit becomes refundable.

 Universal Child Care Benefits (UCCB) (2015 and subsequent benefit years)

The UCCB increases from $100 to $160 per month for children under 6 years of age. A new benefit of $60 per month begins for children 6 to 17 years of age, inclusive.

 Child Tax Credit (2015 and subsequent taxation years)

This non-refundable tax credit for children under 18 years of age has been repealed, and replaced by the enhanced UCCB.

To determine if you will be affected by the changes, you should consult a tax specialist.

Family Law Issues Which Could Trigger a Tax Audit

Alison Griffiths of the Toronto Star points out a couple of family law issues which could inadvertently lead to an audit by the Canada Revenue Agency (CRA).

Only one parent can claim tax deductions like the children’s fitness credit (line 365), tuition transfer (line 324) or  amount for an eligible dependent (line 305). During separation or divorce, parents need to communicate during tax season in order to ensure that both are not inadvertently claiming the same thing.

Some people try to claim legal fees under the Line 232 “Other deductions.”

All of these areas, if improperly addressed, could flag the attention of the CRA and lead to an audit.

 

Law Times Focus on Family Law Television Show

Yamri Taddese of the Law Times has a focus on Family Matters with Harvey Brownstone:

Ontario Court Justice Harvey Brownstone says he’s tearing down the thick shroud over Canada’s judiciary by moving readily between the bench and the TV spotlight.

The family court judge has grown tired of looking on from the bench as litigants struggle to navigate the justice system. That’s why, Brownstone says, he didn’t hesitate when a producer approached him about hosting a TV show called Family Matters.

My Support Calculator is a proud sponsor of Family Matters.

Mouat Comments on the New B.C. Family Law Act

Mary E. Mouat of the Quadra Legal Centre in Victoria, British Columbia, has some commentary in The Times Colonist on the new Family Law Act in British Columbia:

Until Monday, common-law spouses had no property rights under B.C. family law. Now, like married people, they have a choice.

Mouat explains how the new legislation creates a different regime of excluded property to reflect changing family structures, and focuses on value flowing from pre-acquired property, gifts and inheritances and instead of the assets themselves.

She also describes how the focus of family law litigation will increasingly be mediation and out of court settlements:

 

…one of the underlying fundamental purposes of the new Family Law Act is to give families options beyond the courtroom.

The changes in family law in the 1970s saw family cases exploding into the courtroom. As more and more cases were litigated, the limits of that process for families became glaringly obvious. The adversarial system for determining truth between strangers was never designed to deal with the intricacies of a shared-parenting plan.

The unique demands of family law led to the development and expansion of mediation and more recently, collaborative law, which are designed to provide the participants control and support.

Litigation should now be seen as the alternative process, as it is not necessarily the first or best option for families.

 

One of the other important changes of the Act is that does not assume a separation agreement is in the best interests of the children, and will consider the physical, psychological and emotional safety, security and well-being of the children.

Marriage After 50 – Financial Considerations

If you’re older than 50 and getting married, possibly not for the first time, there are 6 things that Catey Hill of The Wall Street Journal’s Market Watch says you should keep an eye out for:

  1. Social security and pensions
  2. College financial aid
  3. Health care
  4. Estate planning
  5. Spousal support
  6. Beneficiaries

When accountant Richard Grebinger connected with teacher Cindy Lambert on the dating website eHarmony in February 2011, they “knew instantly that we wanted to be together,” he says—and indeed, they were married last July. But while love may have felt simple for the two 54-year-olds, the financial part of their relationship was less cut and dried.

Both Lambert, who lives in Ontario, Canada, and Grebinger, who lives on Long Island, N.Y., have children from previous marriages who are now in college. Each came into the marriage owning a home, and each had their own retirement savings, insurance policies and bank accounts. They faced—and still face—a variety of issues over how to combine their financial lives. “It’s complicated,” Grebinger says.

Going to Court Alone may Cost you More

Russell Alexander, a family lawyer practicing in multiple locations in Ontario, has a summary of the 2010 case in Davidson v. Davidsonwhich he uses to demonstrate how going to court without a lawyer make actually cost you more.

The parties made a number of serious mistakes in their proceedings, including not appearing to hearings, not filing materials, failing to make payments as ordered, and not preparing the evidence properly.

In the end they had to hire lawyers on a motion to vary and on an appeal, spending more money than they would have if they had seen a lawyer in the first place.

What Happens to an Engagement Ring?

Anna Wong of Landy Marr Kats LLP explains what happens when an engagement is called off in The Lawyers Weekly,

Unfortunately, an engagement does not always end with a trip down the aisle.

When an engagement is called off, etiquette maven Emily Post categorically instructs that “the engagement ring and all other gifts of value must be returned.”

The law, however, is not so clear cut.

Courts have taken three different ap­proaches to the question of whether an engagement ring has to be returned when the marriage does not take place…

Wong indicates that some courts have considered an engagement ring a conditional gift, and whether it must be returned depends on who broke off the engagement.

Other courts have treated engagement rings as an unconditional gift that cannot be returned even if a marriage does not occur, because a gift is a gift.

Wong also notes that Ontario’s Marriage Act states,

Recovery of gifts made in contemplation of marriage

33.  Where one person makes a gift to another in contemplation of or conditional upon their marriage to each other and the marriage fails to take place or is abandoned, the question of whether or not the failure or abandonment was caused by or was the fault of the donor shall not be considered in determining the right of the donor to recover the gift.

 The complete article is available here.

 

Criminal Charges in Family Law Cases


A divorce can already be emotionally challenging enough, without the issue of criminal complications. But many family law cases often involve criminal charges that emerge from domestic relationships.

Marg Bruinman of The Law Times recently investigated this issue, including concern over abuse of criminal charges to advance a family law claim,

In family litigation, a criminal charge is like a red flag even when the case is still before the court. Additionally, the introduction of the criminal process can throw a wrench into any friendly resolution of the matter.

Immediately, the accused leaves the home and can’t communicate with the spouse and the children or come within a certain distance of the house. That makes the issues of custody and access more difficult.

As a result, according to lawyers, the spouse making the allegation has an edge in the case. With exclusive access, the children themselves could become pawns in the case.

Delays in the criminal system complicate the situation as the charge can easily loom for a year.

Bruinman interviewed several lawyers who acknowledge the gravity of legitimate cases, but  also raise concerns over fabricated allegations, because police must lay charges when a complaint is made.

The new Integrated Domestic Violence (IDV) court was opened in Courtroom 10 at 311 Jarvis St. in Toronto on June 10, 2011 to address some of the overlapping issues in family and criminal law to allow hearings on both matters to be heard on the same day by the same judge.

Justice Geraldine Waldman has explained the goals of the new pilot project:

  1. Better informed judicial decision making:  The judge will have more comprehensive and current information concerning all of the issues involving the family.  This will support the judge in more fully understanding the family, its ongoing needs and the progress each member has made. The judge, for example, will be able to more fully evaluate safety concerns, compliance with orders, and progress in parenting concerns relating to access.
  2. Elimination of conflicting orders:  Conflicting court orders create confusion which can impact on compliance by litigants and enforcement by authorities. The existence of conflicting orders undermines litigant’s confidence in the system.  Elimination of conflicting orders promotes safety by eliminating confusion, makes the expectations of the court clear to all participants and consequently supports compliance.
  3. Consistent handling of multiple matters relating to a single family by judges who are knowledgeable in the area of domestic violence:  Single judge case management has proven to be an effective tool in resolving family litigation.  The judge develops an understanding of the case and the litigants and can support them in moving through the litigation with appropriate orders and expectations.  Judges with expertise in both family and criminal law and in the specific issues relating to domestic violence have the ability to better understand the needs of the litigants and to direct the litigation in a manner that is appropriate for the specific concerns of the community.
  4. Connection to social services and other community resources:  The addition of a community resource coordinator will allow the court to develop and maintain a connection to community resources and to connect the families to resources appropriate to its needs.  This will allow for a more comprehensive and expeditious response to the issues facing various family members, will allow for monitoring of progress which will support the court in appropriate decision making and will potentially expedite resolution.
  5. Promote efficiencies for both the system and the family by reducing the number of appearances in court and trips to court:  Litigants will only have to attend one court location.  The coordination of appearances will reduce the number of attendances.  Consolidation of resources and monitoring will also add to efficiencies that will benefit both the family and the justice system.
  6. Develop expertise within the court and create services and resources designed specifically for the unique needs of the client base:  Because this court will be focused on the issues which are a consequence of domestic violence, it can focus its resources and develop specific expertise.

Litigants in the IDV Court are required to read a fact sheet and speak to a lawyer before signing a mandatory consent form. More information about the IDV Court can found on the Ontario Court Services website.

Photo Credit: FreeDigitalPhotos.net

 

Cohabitation Agreements for Common Law Spouses

When common law spouses split up, they do not necessarily have the same legal rights as married couples when dealing with the division of net family property. Sarah Millar of the Toronto Star recently explained how a cohabitation agreement can protect spouses by clarifying which property can be split and how. Cohabitation agreements can also potentially stipulate spousal support payments and dealing with debts.

One way a cohabitation agreement can protect spouses is by spelling out what property can be split and how it will be split. It can also spell out how spousal support will be handled, and how joint debts will be paid.

Millar details how common law spouses can get a cohabitation agreement by each partner getting their own lawyer, a process called obtaining independent legal advice. The couple then provides full financial disclosure and decides which assets and debts will be included.

However, if a cohabitation agreement is considered unfair by a court at a later date they can still set it aside.

Single Mom Launches Class-Action Against Province over Child Support

A single mother in Gimli, Manitoba has launched a class-action lawsuit against the province because the Family Services Department considers child support payments received as income, and deducts the amount from income-assistance cheques received by people on social assistance.

In an interview with the Free Press, Chantel Miyahi explained the reasons why she wants other mothers to join the lawsuit,

“Some people will be afraid because they’re so intimidated by social assistance,” Miyai said, adding the government staff are disrespectful and often resort to using bully tactics. “Many people will be afraid that they’ll be cut off but this money belongs to their children.”

“The monthly budget is difficult to live on as it is but when they withheld my support payments, it made it really tough,” Miyai said. “I’m behind on all my bills. I’m spending the money my parents set aside for university.”

Miyahi claims that since child-support payments belong to children, the province is unfairly enriching itself. She is seeking a ruling that the deductions are a violation of the children’s Charter rights, and is looking for future payments to be directed to the Public Trustee until the children turns 18, and for a refund of the deductions payable to her children.

Most jurisdictions in Canada make similar deductions as Manitoba against social assistance payments.

Update

The representative plaintiff in this action, Chantel Miyahi, has pulled out of the lawsuit, citing privacy concerns,

A young Gimli woman at the heart of a class-action case against the province is pulling out of the lawsuit, saying that the outpouring of negative online comments is too much to bear.

Chantel Miyai said she fears for the safety of her three young children and herself after she went public with details about a lawsuit that aimed to stop the Manitoba government from deducting child custody payments from income assistance payments of single parents.

The lawyer in the action,  Norman Rosenbaum of Merchant Law Group LLP, has indicated the action will continue without her.