How Section 7 Extraordinary Expenses Are Shared in Newfoundland and Labrador

When going through a separation, understanding child support can be quite confusing 🤔. Many parents assume that the basic monthly child support cheque covers absolutely everything a child needs. However, the standard monthly table amount is only designed to cover routine costs like groceries, basic clothing, and household utilities. What happens when your child needs expensive orthodontic work, daily after-school childcare, or high-level competitive hockey gear?

This is where “Section 7 Expenses” come into play . Named after a specific section of the Federal Child Support Guidelines, these are special or extraordinary expenses that go above and beyond the basic necessities. Whether your family lives in St. John’s, Happy Valley-Goose Bay, or Clarenville, the law requires both parents to contribute to these significant costs fairly. Let us break down how you identify, calculate, and legally enforce these shared expenses.

Step-by-Step Process in Newfoundland and Labrador

You cannot simply sign your child up for private school and hand the other parent a massive bill 🗒️. The courts require a methodical approach to ensure the expense is reasonable and that the cost-sharing is mathematically fair.

Step 1: Determine if the Cost Qualifies under Section 7

First, you must determine if the expense legally qualifies as “extraordinary.” The guidelines specifically list eligible categories: child care (daycare) incurred due to employment or schooling, health-related expenses exceeding $100 annually (like braces, glasses, or therapy), extraordinary extracurricular activities, and post-secondary education costs . General sports fees or summer camps might not qualify if they are easily affordable within the basic monthly support amount.

Step 2: Deduct Subsidies and Tax Benefits

Before splitting the bill, you must deduct any government assistance or tax benefits related to the expense 📉. For example, if daycare costs $800 a month, but you receive a provincial childcare subsidy or you get a tax deduction for it, you can only split the actual “out-of-pocket” net cost. This ensures neither parent is unfairly profiting from a shared expense.

Step 3: Exchange CRA Income Information

To determine the sharing ratio, both parents must be fully transparent about their current finances . You both need to exchange your most recent Canada Revenue Agency (CRA) Notice of Assessment, specifically looking at Line 15000 (Total Income). If one parent earns $60,000 and the other earns $40,000, their combined income is $100,000. Therefore, the higher earner pays 60% of the Section 7 costs, and the lower earner pays 40%.

Step 4: Obtain Consent Before Incurring the Expense

Unless it is a medical emergency, you should always consult the other parent and obtain their written agreement before signing the child up for an expensive activity 📝. Send an email outlining the anticipated cost and their exact percentage share. If they disagree that the expense is necessary or affordable, you may need to use mediation through Family Justice Services.

Step 5: Document in a Formal Agreement or Order

To avoid monthly arguments, ensure that your formal Separation Agreement or Court Order explicitly states how Section 7 expenses will be handled . It should specify what percentage each parent pays, how quickly receipts must be provided (e.g., within 30 days), and how quickly the reimbursement must be paid.

How Much Does it Cost in Newfoundland and Labrador?

The cost of resolving a Section 7 dispute depends on whether you and your ex-partner can agree on what is “reasonable” for your child 💵:

It is far cheaper to use a mediator to negotiate a fair extracurricular budget than to hire a law firm to argue over a $300 hockey registration fee in front of a judge.

How Long Does the Process Take?

Cost-sharing ratios for Section 7 expenses should be updated annually 📅. Most separation agreements require parents to exchange their CRA tax returns by May or June of every year to recalculate the percentages for the upcoming year. If you have to take an ex-partner to court to enforce payment of a legitimate Section 7 receipt, obtaining a judgment could take 3 to 6 months.

Frequently Asked Questions (FAQ)