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Alimony: A calculated formula

11 August 2010 by National Bank
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While support payments for the children of a divorce are a certainty, spousal alimony is a grey area which requires more detailed calculations.

By law, the required parental contribution to a child’s needs is calculated in proportion to each spouse’s respective income. Whether legally married or not, parents who are separating or divorcing must contribute to the needs of their children.

Since 1997, the federal government and the government of Quebec have changed the rules in regard to support payments:
• child support paid by one parent to another is no longer taxable to the receiving parent, nor is it tax deductible for the parent who pays;
• prior support payment agreements can be revisited and modified.
In order to calculate amounts to be paid, you must first:
• determine the annual gross income of each parent and their corresponding disposable incomes;
• take the disposable income of each parent and divide it by the combined disposable income of both parents, establishing a percentage allocation to be paid by the non-custodial parent.

For example:

 

Father

Mother

Total

Disposable income of each parent

$33,000

$25,000

 

Combined disposable income of both parents

 

 

$58,000

Distribution percentage

56,9%

43,1%

 

Basic support payment according to disposable income of both parents (for two kids)

 

 

$10,840

Basic contribution of each parent

$6,167.96

$4,672.04

 

In the case of ex-spouses, only legally married spouses have an obligation to pay each other support.
Common law spouses are not entitled to support payments, which may also disadvantage children born outside of marriage. The Quebec courts are currently inundated with such cases and are expected to revisit the issue in 2010.

In all other cases, alimony between ex-spouses is determined according to the needs of the spouse requesting support, as well as the means of the spouse from whom the payments are being requested.

That, however, is no easy task. For example, a mother who has stayed at home to raise her children for twenty years is clearly entitled to alimony, while a mother who has worked outside of the home for five years and has a measure of financial independence could be denied the right to alimony.

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