Lump-sum payments

An amount paid as one lump-sum will generally not be considered a support payment because it is not paid on a periodic basis.

However, if periodic payments required by a court order or written agreement were overdue and one payment is made to bring them up to date, the lump-sum payment would be considered a support payment.

Also, a lump-sum payment would be considered a support amount if it is paid under a court order clearly stating that retroactive support has to be paid for a specific period that happened before the court order.

The following are generally not support payments:

  • a lump-sum payment made in place of several periodic payments that were required by a court order or written agreement, but were not yet due to be paid (a prepayment). However, the prepayment may be considered a support payment if it was made for the sole purpose of securing funds to the recipient
  • a lump-sum payment made under a written agreement for a period before the date of the written agreement
  • instalment payments of a lump-sum
  • payments that release the payer from any obligation to pay overdue support amounts or future support, or both

For more information, see Income Tax Folio S1-F3-C3, Support Payments.

Example – Lump-sum payments

Jason and Tracy have been living apart since August 2016. In their court order, Jason has to pay $500 per month for Tracy’s support. In June 2017, Jason lost his job and was unable to make the spousal support payments. In February 2018, he got a new job. He owes $4,000 in support payments. Jason and Tracy returned to court where it was agreed that Jason will pay $3,500 of the $4,000 he owes. The other $500 will not be paid. The $3,500 lump-sum payment has released Jason from his obligation to pay these overdue amounts. The lump-sum payment does not qualify as a support payment because it was not part of the original agreement.

  

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: