Shared Parenting has a different meaning in Canada than in the US. In this blog we will be looking at the Canadian version of this term.
What is shared parenting?
In essence, it’s describing a certain allocation of parenting time between parents – it’s where each parent has at least 40% of the time with the children in a year.
It used to be called “shared custody” under the old legislation prior to March 2021.
Given that this is calculated on an annual basis, parents can literally get this down to the number of minutes in a year – did you know that there are 525,600 minutes or 8760 hours in a 365-day calendar year?
When creating a parenting schedule, the legislation does not provide for any presumption in favour of a shared parenting arrangement. Instead, the legislation speaks more to the quality of the parent-child relationship in order to determine whether shared parenting is in the best interest of the children.
If parents are doing a shared parenting arrangement, is there any impact on child support?
You may recall from other blog posts that that child support is calculated based on the Child Support Guidelines – either federally or provincially. (click here for Child Support Part 1 and click here for Part 2).
Shared parenting has a special section all to itself – it’s under Section 9 of the Child Support Guidelines.
When we look to calculate child support for shared parenting, there’s 3 points to consider:
First, we look at the child support formulas for each spouse – so we do the calculation for each parent as to what they would pay in child support if the other parent had the children more than 60% of the time, as in a non-shared parenting arrangement.
EXAMPLE: If dad would pay to mom $500/month, and mom would pay to dad $300/month, then the higher paying parent pays the difference between those numbers – in this case dad pays to mom $200.
This set-off is always the starting point to the calculations.
The next 2 components of this section of the Child Support Guidelines are the way that “flexibility” is injected into child support for shared parenting.
Next, we look at any increased costs of the arrangement; and
Finally, we look at the “conditions, means, needs and other circumstances” of each spouse and of any child for whom support is sought.
Are there any tax implications to shared parenting?
The tax laws are slightly different than the laws relating to separation and divorce.
There’s a couple things that parents should be aware of tax-wise. One is the Canada Child Benefit (or CCB) and the other is the Amount for Eligible Dependent (or the AED credit).
First let’s look at the CCB rules. Under the Income Tax Act, one of the keys to “shared custody” is that the children are residing with a parent on “an equal or near equal basis” – without specifying any particular percentage. If so, then each parent is eligible to receive 50% of their CCB entitlement.
Next, let’s look at the AED credit. This is a credit that you can claim on your taxes if you have an eligible dependent.
There’s 2 criteria if you want to claim this credit:
- First, you need to be unmarried or separated, and
- Second, you need to maintain a “self-contained domestic establishment” where you support a dependent.
If you only have one child, then you and the other parent will have to determine who will claim the child in which year. If you have more than one child, then each parent can claim one provided that they qualify.
Two notes of caution:
- First, if you’re doing a “set-off” of child support, and you plan on claiming the AED credit for a child, the full formula must be documented – not just the difference between the 2 numbers.
- Second, make sure you disclose to CRA that you’re doing shared parenting. I have seen people and then end up with a huge tax bill when CRA finds out about the arrangement after the fact.
What kind of tips could you give to parents who are embarking on a shared parenting arrangement ?
First, learn effective communication – there are so many communication tools out there to help you, you may even want to check out co-parenting apps that are widely available. Check out the FREE downloadable e-book available to members of our e-learning portal at Up A Notch Learning Inc.
Second, develop consistency between homes as much as possible to help kids in order to help kids move frequently between homes while feeling the stability and routine they need to feel grounded in their childhood.
Finally, take steps to reduce conflict between parents – this will reduce your children tension and anxiety by knowing their parents can interact amicably.
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