Determining Who the “Eligible Individual” is in Respect of a Child when the Child Doesn’t Live Exclusively With One Parent.
Ethier v The Queen, 2012 TCC 241
The issue was the factual determination of when the child began living with the father, and therefore until when the taxpayer (mother) was the “eligible individual” in respect of the son as defined under section 122.6 of the ITA.
The court considered the wording of the section and the factors under section 6302 of the Income Tax Regulations, before concluding that on the evidence the taxpayer remained the person primarily responsible for the care and upbringing of the son, despite the part-time residence at the father’s home.
The taxpayer was reassessed and denied the Canada Child Tax Benefit (CCTB) she received for the periods under consideration (2007, 2008, 2009) in respect of her son. This was based on her not being the “eligible individual” as she did not reside with the child and is not primarily fulfill the responsibility for the child’s care and upbringing. However, the Crown at trial did not contest that the taxpayer fulfilled the responsibilities of the child’s care and upbringing until December 2008, so the issue became the months in 2009 and 2010.
The taxpayer divorced from the child’s father on October 10, 2005, and was granted legal custody of the child, who resided with her. The father had access rights. Sometime in 2009, the child began staying with his father while still living with the taxpayer.
The two spouses lived about two kilometers apart. The taxpayer demonstrated, using a calendar she kept, that her son stayed with her during the months in question and that the son began spending more time and more nights with the father, until he moved with the father permanently in June 2010.
The father claimed that the son moved in on a full-time basis in January of 2009, and relied on a note from the principal of the son’s school, a handwritten note from the son, and the employer of the girlfriend of the father.
The Court began with a review of the relevant portions of the definition of “eligible individual” in section 122.6 of the ITA, which reads:
“eligible individual” in respect of a qualified dependant at any time means a person who at that time
(a) resides with the qualified dependant,
(b) is the parent of the qualified dependant who primarily fulfils the responsibility for the care and upbringing of the qualified dependant,
[. . . ]
(h) prescribed factors shall be considered in determining what constitutes care and upbringing;
The Court noted that paragraph (b) of the definition was replaced by SC 2010 c 25, subsection 24(2) to be applied to overpayments that arise after June 2011. The amendment allows the sharing of overpayments for dependents equally between those two eligible individuals who live separately but share custody on an equal or near-equal basis, and who are both primarily responsible for the care of the dependent. This, however, has no application in this case.
The Regulations at section 6302 require the consideration of the following factors:
For the purposes of paragraph (h) of the definition “eligible individual” in section 122.6 of the Act, the following factors are to be considered in determining what constitutes care and upbringing of a qualified dependant:
(a) the supervision of the daily activities and needs of the qualified dependant;
(b) the maintenance of a secure environment in which the qualified dependant resides;
(c) the arrangement of, and transportation to, medical care at regular intervals and as required for the qualified dependant;
(d) the arrangement of, participation in, and transportation to, educational, recreational, athletic or similar activities in respect of the qualified dependant;
(e) the attendance to the needs of the qualified dependant when the qualified dependant is ill or otherwise in need of the attendance of another person;
(f) the attendance to the hygienic needs of the qualified dependant on a regular basis;
(g) the provision, generally, of guidance and companionship to the qualified dependant; and
(h) the existence of a court order in respect of the qualified dependant that is valid in the jurisdiction in which the qualified dependant resides.
The Court reviewed the evidence and concluded that the taxpayer never gave up her responsibility as the primary caregiver of her son, even when the son lived part-time under the father’s roof. She had legal custody of her son up to June 2010, and continued her responsibility for the care and upbringing of the son (medical expenses, education, recreational activities). The court relied on receipts provided by the mother, and the lack of receipts from the father, dealing with care costs of the son.
The Court concluded that the taxpayer was the eligible individual in relation to her son at the beginning of the month for each of the six-month period ending June 30, 2009 and of the twelve-month period ending on June 30, 2010, for purposes of claiming the CCTB.
– Sas Ansari, BSc BEd PC JD LLM PhD (exp) CPA In-Depth Tax 1, 2 &3
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