Q: Deductibility of Legal Fees Incurred to Claim or Collect Support
Q: What are grounds for divorce in Quebec?
Q: What is alimony (spousal support)?
Q: Is alimony taxable?
Q: How should I negotiate alimony with my spouse?
Q: What is child support?
Q: Is Child Support Taxable?

Good news for taxpayers! Until recently, the government only allowed you to deduct legal fees incurred to increase support, to defend against a claim to decrease support, or to collect unpaid support. It was held that any fees to establish support for the first time (for example, during the initial divorce proceedings) were not deductible. But now, the federal government has changed its mind, and even legal fees to claim support for the first time are now deductible.

So, keep your detailed invoices and receipts, to establish that the legal fees you paid were to establish, increase (or prevent a decrease), or collect support.

Read this Federal Income Tax Department Interpretation Bulletin for more explanations.

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Our current Divorce Act is a federal law which has been in effect since February 1986, and is applicable throughout Canada. It is the Constitution of Canada that requires that Parliament set the conditions for marriage and divorce, to be administered equally in every province and territory of our country. In each province, there is a designated court that has the jurisdiction to deal with divorce and all its ramifications.

In Quebec, it is the Superior Court that deals with divorce and all related issues, including custody, child support, alimony, access rights, division of assets and so on. The province of Quebec is divided into districts (such as Montreal, Longueuil, Laval, Joliette, St-Jérôme, and so on), and each district has its own central Superior Court.

You may start a divorce action before the Superior Court in the judicial district in which you or your spouse is habitually resident (there are specific rules to determine the “habitual residence” of a spouse or a child).

The Divorce Act provides that marriage breakdown is the grounds for divorce, and there are three particular kinds of marriage breakdown:

1. Separation of over one year, without hope of reconciliation (and without any resumption of cohabitation of over 90 days). This is the most common ground for divorce, because it is “no fault”. Neither you nor your spouse have to explain why you are living apart, as long as both of you do live apart for the 12 month period, and there is no hope of resumption of a life together.
   
   You may try to reconcile during this period: if you live together for more than 90 days, and separate again, the 12 month period must be counted from the date of the “new” separation. However, if your attempt at reconciliation lasted for 90 days or less, there is no interruption in the counting of the 12 month period.
   
   Some couples separate, but live under the same roof, for example, when financial limitations prevents one of them from renting a new apartment. It is harder to prove that you have been “living separate and apart under the same roof,” but judges are willing to listen, as long as the “separation” is serious: no more sexual relations, no socializing together, no more meals eaten together, and so on. It must be clear that the two of you are no longer sharing a common life, but are living as two independent adults, with no more contact than roommates would have.
   
   
2. One of the spouses has committed adultery. Despite popular belief, you do not have to bring your spouse’s lover to court to prove the adultery. In most instances, the unfaithful spouse ends up admitting the adultery, and this is sufficient proof in court. At first, the unfaithful spouse may deny the adultery out of fear it will affect his or her claims in the divorce, but since the Divorce Act attaches no negative consequences to an admission of adultery, there is no particular reason to deny it. Also, the divorce judgment itself does not mention the ground for the divorce, so there is no long-term shame or stigma to admitting the adultery.
   
   Otherwise, you have to make sufficient proof to convince the judge that your spouse likely committed the adultery: motel receipts, telephone bills showing repeated calls from a partner, long unexplained absences from home. These are painful matters about which to testify, but hearings in divorce cases are closed to the public, and a judge only will require enough evidence to be convinced that the marriage is over so the process is not more unpleasant than it need be.
   
   There must not be collusion or condonation about the grounds for divorce: this means that you cannot pretend to an adultery that has not taken place in order to speed up a divorce (that would be collusion); also, this means that you cannot claim adultery as grounds for divorce if you have forgiven your spouse before taking proceedings (that would be condonation).
   
   
3. Your spouse has treated you with mental or physical cruelty that makes continued cohabitation intolerable. Physical cruelty is a simple ground for divorce: any judge understands that a spouse, husband or wife, should not be expected to tolerate or accept to continue a marriage in which there has been domestic violence.
   
   As for mental cruelty, this is much more subjective. The judge needs to understand two important elements: first, that your spouse has engaged in the conduct you find cruel (yelling at you, insulting you, belitting you in front of the children, or similar misconduct which falls short of physical cruelty), and second, that this conduct has made it intolerable for you to continue your marriage (you have become depressed, you have entered therapy, you are unable to work or to sleep). Simple testimony about “irreconcilable differences” or about “having grown apart” does not satisfy the standard for mental cruelty.
   
   As in the other grounds for divorce, when your spouse admits to the conduct, it is far easier to proceed to the divorce.

As a practical reality, by the time the divorce is finally heard by the court, whether after you and your spouse have come to an agreement or the two of you have fought it out in a protracted court battle, the last thing the two spouses want is a lengthy debate about the grounds for divorce, and there is usually reasonable cooperation to ease the process.

Courts rarely spend more than 10 or 15 minutes on hearing about the grounds for divorce; judges are far more concerned about the protection of the children (custody, access, parental authority, child support), the division of property (family patrimony, matrimonial regime, compensatory allowance) and the financial support of the disadvantage spouse (alimony and lump sums).

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During marriage, spouses owe each other respect, fidelity, succour and assistance, and they contribute to the expenses of the marriage in proportion to their respective means (articles 392 and 396 of the Civil Code of Quebec). Upon separation or divorce, spouses owe each other financial support. If one spouse is in financial need, often by reason of the role he or she assumed in the marriage, then the spouse who is better off will owe alimony (spousal support) to the spouse in need.

This does not apply to couples who live together and who are neither married nor living in a formal civil union. Just “shacking up,” no matter for how many years, does not lead to a claim for alimony.

Unlike in the case of child support, that are no government “guidelines” to determine what alimony should be paid by one spouse to the other. It all depends on the reasonable needs of the one spouse, and the financial means of the other spouse. All factors are taken into consideration: income from all sources, assets and liabilities, the length of the marriage, the degree of disparity between the finances of the two spouses. The rules to determine alimony are essentially the same whether the proceedings are for a divorce (under our federal Divorce Act), or for a separation as to bed and board (under our Civil Code of Quebec).

Also, the duration of support is often determined by the length of the marriage, and how long it can be reasonably expected that it will take for the financially dependent spouse to attain a reasonable degree of financial autonomy. Obviously in “traditional model” marriages, where one spouse has devoted many years to making a home, it may no longer be realistic for that spouse to attain full-time employment with adequate benefits or retirement protection.

For the Court to fix alimony, both spouses have to fill out their Sworn Statements of Income and Expenses, and disclose in all details, their income from all sources, their weekly (or monthly) living expenses, and all their assets and liabilities.

You may download these forms in pdf or Excel format here

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Alimony that is payable on a regular basis is taxable for the recipient and tax deductible for the payer, as long as there is a judgment or written separation agreement that formalizes the alimony that is being paid. If alimony is paid as a “lump sum” however, it is neither taxable for one nor deductible for the other. In cases where alimony is paid, in whole or in part, to third parties (for example, to a landlord to cover the rent), such payments are not taxable for the recipient nor deductible for the payer – unless special provisions of the Income Tax Act are invoked!

Remember, alimony remains taxable even if the payer chooses not to deduct it! There is no law obliging the payer to deduct alimony payments, but there is a clear law obliging the recipient to declare receipt of alimony. So, agreements based on both spouses not declaring alimony on their income tax returns in order to “evade” taxation rules will never work out: sooner or later, the recipient will be audited by the tax department, and have to pay penalties and interest, whereas the payer will not be punished in any way!

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Before engaging in a costly court battle over alimony, spouses who are discussing amicably how to settle their separation or divorce, or spouses who go into mediation, should concentrate on the same kinds of factors the Court will consider if they cannot solve the problem themselves.

The Court will not consider marital “fault” (adultery, abandonment), nor will the Court be interested in the bickering, emotional excess or histrionics of either spouse. The Court will be unimpressed by any spouse who lies, hides assets, fails to disclose income, fails to meet his or her responsibilities to the children of the marriage, fails to make reasonable efforts to be self-supporting.

To calculate the alimony, the Court – and hence, you! – should consider the following:

• the standard of living during the marriage;
• the insufficiency of income and assets to permit a spouse to be self-supporting;
• the sufficiency of income or assets that permit the other spouse to contribute support;
• the impact of the division of property between spouses (sharing of the family patrimony and the matrimonial regime);
• the duration of the marriage;
• the responsibilities for child rearing which affect a parent’s availability to work outside the home full-time;
• the time it will take for the financially dependent spouse to become self-supporting, in whole or in part;
• any re-education or re-training costs to permit the financially dependent spouse to establish a career or return to a pre-existing career;
• the age and health of both spouses;
• the sometimes permanent loss of earning capacity for spouses who have lost career or education opportunities because of long-term responsibilities assumed in the marriage;
• finally, the income tax consequences to both spouses of the payment of alimony

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When parents separate, whether or not they are married, in a civil union, or have no formal ties at all, both of them must financially support their children.

No matter whether the parents are married and so are in divorce proceedings (under our federal Divorce Act), or are merely separating (under our Civil Code of Quebec), or are dissolving their civil union (also under our Civil Code of Quebec), or finally, are not in any formal union, and so are just taking plain old custody and child support proceedings (yet again under our Civil Code of Quebec), the rules are the same!

Child support is determined by applying the Quebec Child Support Guidelines. Each parent has to complete an Annex I Child Support Determination Form.

Annex I for 2003

English

French

(Forms for preceding years can be found in our Forms section, if you need to calculate what child support should have been prior to 2003.)

The child support is calculated as a function of both parents’ incomes, considered together, after a basic living expense deduction of $ 9,000 granted to each parent. Children’s extraordinary expenses must also be included in the form. Such expenses include: medical, dental, orthodontic expenses; private school tuition, books and uniforms; tutoring; day care; CEGEP and university tuition; sporting activities and equipment (beyond day-to-day minor costs which are considered to be included in child support).

Also, where the “non-custodial” parent has extended access (between 20% and 40% of the calendar year), there is a small reduction in support payable that must be calculated, because these “non-custodial” parents bear a larger share of day-to-day costs of raising their children.

In the event of complete shared custody (more than 40% of the calendar year to one parent, and less than 60% of the calendar year to the other parent), the child support amount payable is cut drastically, but then again, this is because the Quebec government expects that parents who share custody will share ALL their children’s out of pocket expenses rateably between them, in proportion to their respective incomes.

Frankly, it strikes me that this latter scenario is a great way to ruin shared custody agreements! I do not know many married couples who are getting along well who could cope with the strain of sharing EVERY expense they incur for their children. So, when couples split up, even if they have the maturity, wisdom and strength to do actual hands-on child-rearing in a shared custody arrangement, I think it puts a particular stress on the two parents to require all this extra togetherness to share their children’s expenses!

It seems more practical for separated parents to agree on a model of division of expenses before they are incurred, so that each parent has the freedom to do the purchasing, based on a set annual budget (for example, one parent may be responsible for purchasing all clothing, which is kept in both homes, and the other may handle schooling or sports expenses). Or, simpler yet, the parent who generally undertook the children’s expenses during the marriage (often the mother, I will admit) continues to do so after separation, and the father pays a fixed weekly allowance to the mother to cover such expenses.

At least in these two latter scenarios, parents can meet once or twice a year to review how the budget was spent, instead of having to communicate about “money matters” every few days!

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Fortunately for some, and unfortunately for others, child support payable pursuant to a written separation agreement or judgment of the court, after May 01 1997, is no longer taxable for the recipient, nor deductible for the payer.

For child support agreements and judgments rendered prior to May 01 1997, both recipient and payer may file a declaration to make the payments tax-free for both of them.

The fact that child support is not taxable is important for many lower income earners, because this avoids social benefit “clawback” that can have a particularly terrible effect! Taxable child support not only bumped these people (generally women), into a higher income tax bracket, but they also progressively lost tax benefits such as family allowance that are “clawed back” progressively as income moves up. This means that often the payers (generally men) might save, say, 50% on their income tax by deducting child support, but the recipients were suffering a “cost” of, say, 60% because of increased income tax added to lost social benefits!

Unfortunately, for many “traditional model” marriages, the non-taxability of child support takes away what could be a wonderful opportunity to effect “income-splitting” between a higher income spouse and the stay-at-home spouse.

The tax departments acknowledged that overall, changing child support to make it non-taxable represented a tremendous windfall in tax revenues for both governments, a fact that many women’s groups should have considered far more carefully before throwing their weight behind Suzanne Thibodeau’s fight to “de-tax” child support (a Quebec case that ended up in the Supreme Court), instead of behind Elizabeth Symes’ fight to establish the deductibility of child care expenses (an Ontario case that also ended up in the Supreme Court).

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