Specific-purpose and third-party payments

Answer a few questions to find out if the specific-purpose payments made are considered support payments.

Specific-purpose payments are amounts payable under a court order or written agreement for specific expenses (for example, rent) to support the recipient or the child in the recipient’s custody.

Specific-purpose payments include:

• rent, property taxes, insurance premiums
• educational or medical expenses (such as prescription drugs or eye glasses)
• maintenance costs for the home in which the recipient lives
• up to 20% of the original principal amount of any debt from buying or improving the home in which the recipient lives

If the recipient can use the specific-purpose payments as they see fit, they are considered support payments if they meet conditions 1, 2, 3, and 4 in Support payments.

However, if the recipient cannot use the specific-purpose payments as they see fit, they are not considered support payments, unless the court order or written agreement states that the recipient will include the payments in income, and that the payer can deduct them.

These amounts may be paid directly to the recipient or to a third party.

Third-party payments are specific-purpose payments made under a court order or written agreement to someone other than the recipient.

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

Forms and publications

• Guide P102, Support Payments
• Income Tax Folio S1-F3-C3, Support Payments