Divorce Mate: Critically Important Factors
The SSAG was developed by two family law professors in a bid to help make spousal support more predictable and consistent.
While the SSAGs are not law, they are essentially a compendium of the law on spousal support.
There are several other problems that may be encountered in using DivorceMate
Using DivorceMate without proper knowledge of the SSAG can lead to problems.
Section 7 expenses must be taken into account.
For separating couples negotiating Child Support and or Spousal Support, reliable information and detailed financial analysis are critically important. Amongst the most crucial points of information, these couples will need, is a DivorceMate support calculation report. These SSAG/CSG reports detail the amount of spousal support and/or child support required to meet obligations.
However, due to the fact that this is often one of the most complex areas of separation and divorce settlement negotiations, it can be very easy to make errors. Despite the introduction of software such as DivorceMate to help with these projections, the task for professionals and do it yourself divorcing couples is not any easier.
Although the calculations from the Guidelines and software are meant to assist spouses to resolve their separation and divorce through negotiations, unsophisticated use will see them heading to court sooner than later.
To be assured of the best results, divorcing spouses should invest time and effort in learning the Guidelines and engage the services of an experienced professional to prepare the DivorceMate support calculations. This article discusses some of the issues you should watch out for when preparing a DivorceMate support calculation.
Unsophisticated Use Will Have You Headed to Court
Why the SSAG
The Spousal Support Advisory Guidelines (SSAG) and Federal Child Support Guidelines (CSG) were created to help people determine the amount of support in their post-separation lives.
The SSAG was developed by two family law professors in a bid to help make spousal support more predictable and consistent. It suggests the appropriate ranges of spousal support based on a variety of situations, although it does not answer the question whether a spouse is entitled to support.
Guidelines Or Law?
The CSG also sets out appropriate amount of child support based on a set of circumstances. It assists couples with determining what amounts of child support are appropriate, where child support should be paid.
Federal Child Support Guidelines are in essence law. The Spousal Support Advisory Guidelines are not as law, however they have been very useful to courts and legal practitioners.
When parents can not agree on the amount of Child Support, and seek a decision by a Court. Family Court Judges will always base their Child Support decisions on the Federal Child Support Guidelines. In Spousal Support cases Family Court Judges will often follow the guidance found in Spousal Support Advisory Guidelines, but not always. Mediators, Family lawyers and other professionals also use the guidelines when advising spouses on out-of-court child and spousal support arrangements.
SSAG rules are quite bulky
However, the guidelines are really complex. While the SSAGs are not law, they are essentially a compendium of the law on spousal support. The laws on which they are based developed in a complex pattern and while the SSAGs have tried to simplify these, the SSAG rules are quite bulky.
DivorceMate provides ready assistance
Due to the fact that the vast majority of couples must determine issues relating to child or spousal support or both, almost everyone has to use these guidelines. However, since calculating the applicable payments by hand is often tedious and essentially impossible for most people, DivorceMate provides ready assistance.
DivorceMate without proper knowledge
Despite this, using DivorceMate without proper knowledge of the guidelines can lead to problems. Eventually, it may force couples into litigation and take the decision of how to structure their post-separation lives out of their hands.
How to avoid problems when using DivorceMate
Perhaps the biggest mistake that people make when using DivorceMate and even the guidelines is the assumption that whatever amounts are produced must be correct. Of course, nothing could be further from the truth.
Users who are not properly familiar with the guidelines could end up leaving important income items out. This ends up skewing the outcomes and may lead to incorrect support projections.
There are several other problems that may be encountered in using DivorceMate or the guidelines. Here are some of these problems and tips to avoid them.
Adjustment of “Custodial Payor” formula: There is an assumption in the SSAG that child support is being paid according to the CSG. But if child support is not being paid according to the CSG, a manual adjustment must be made in the software. One instance when this might be the case is where the “Custodial Payor” formula is used. In this case, rather than have both parties pay support to each other, the higher paying spouse may have custody of the children and choose to forego child support. To make the adjustment, click on “Options” in the CSG section and use the relevant dropdown list to override the “Child Support (Table)” or “Child Support (s.7 Payment)”.
Eligible Dependant Credit: Keep in mind that the “Eligible Dependant Credit” (EDC) is not the same as CCB. You can find EDC under the “Children” blue link in the software. Where necessary, you may need to change the default setting of “automatic”. This setting allocates the credit to the net recipient of child support – usually the lower income earner. But if this allocation is incorrect, the setting must be changed.
Section 7 expenses: When using the “with child support” formula under the SSAG, section 7 expenses must be taken into account. Failing to do this means the payor will pay much more spousal support than they should, especially where special expenses are significant. If there is no certainty about the precise amount of special expenses, then an estimate should be included, at least
Special expenses and associated tax items: Under the FCSG, the court is required to take into account any subsidies, benefits or income tax deductions relating to an expense. As such, if there are any subsidies, benefits or income tax deduction applicable to an expense, they should be included. The software provides some help here. If there is any associated credit or benefit attached to a special expense, a green link will appear under the item. Click it and it will take you where you can input the tax item.
Automatic calculation of CCB & GST/HST: Users do not need to input Canada Child Benefits (CCB) or GST/HST in DivorceMate. They are already automatically calculated under the software based on income of the parties and custodial arrangements. This will also be the case in a “shared eligibility situation”.
The trouble with support calculations
While correct, claiming that Guideline income isn’t “Line 150” (now Line 15000, which doesn’t have the same ring to it) because it isn’t specified that way in the Child Support Guidelines isn’t a helpful response to dispelling the pervasive fallacy hurting family law practise. Between “Line 150” and the Guideline definition of income, there are two major distinctions to consider:
One of the stated goals of the Child Support Guidelines is to guarantee that children “continue to benefit from both spouses’ financial means following divorce.” According to Section 2(3) of the Federal Child Support Guidelines,
“Where any amount is established for the purposes of these Guidelines on the basis of specified information, the most current information must be used.”
“Line 150” represents the income tax definition of “total income” for income tax purposes, not child support purposes. After the fact, tax returns are prepared and filed. They reflect, at best, the previous year’s or even older year’s reported income for tax reasons. They do not reflect the person’s actual income position or ability to provide child support unless nothing has changed. Furthermore, for establishing a party’s personal tax liability, “Line 150” is the starting point.
This obligation is distinct from the party’s responsibility to support their children.
Section 16 of the Federal Child Support Guidelines states, “Subject to sections 17 through 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and adjusted in accordance with Schedule III.” (Italics added) In order to apply the proper adjustments stated in Schedule III, you must first determine the various sources.
The sum at “Line 150,” for example, may be $110,000. If “Line 150” is made up entirely of employment income with no further modifications, such as union dues, “Line 150” and Guideline income are equal. However, if “Line 150” is made up of $30,000 in employment income and $80,000 in taxable eligible Canadian dividends, the total income is still $110,000, but Guideline income is $87,971 (after any other considerations or adjustments).
It’s easy to summarise detail while working with numbers and formulas, but it’s much more difficult to construct the correct detail from a summary. Details matter when it comes to calculating fair and equitable child and spousal support. The improper amounts submitted into the wrong data input areas will not provide the correct results, even when utilising powerful support calculating software like DivorceMate.
Conclusion
When navigating the complexities of separation, having a trusted professional with the right expertise can make all the difference. I can provide comprehensive support throughout your divorce journey with my dual qualifications as a Mediator and a Certified Divorce Financial Analyst (CDFA). My advanced training and experience with DivorceMate software ensure your separation is settled efficiently and equitably.
As a specialist in the Soft Landing Settlement Method, my approach emphasizes a fair and amicable resolution that minimizes conflict and helps you confidently transition into your new life. By combining my unique skill set with DivorceMate’s powerful support calculator for Ontario, I can provide tailored guidance that addresses your situation’s emotional and financial aspects.
Take the first step towards a more secure and peaceful future by scheduling a Get Acquainted Call with me today. During our call, we can discuss your circumstances and explore how my services can support you during this critical time.
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