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.
Example
Under a written agreement, Melissa has to pay $900 per month to her former spouse, Alex, as an allowance for support. This written agreement states that Melissa will pay an amount of $300 directly to Alex. She also gives $600 directly to Alex’s landlord for the rent of his apartment. The agreement also states that Alex may, at any time, change the arrangement and ask that the entire $900 be paid directly to him.
The monthly amount of $600 paid directly to the landlord and the monthly amount of $300 to Alex are considered support payments because he can use the money as he sees fit.
What qualifies as a support payment
Answer a few questions to find out if the specific-purpose payments made are considered support payments.
The following provides the same information in two different formats:
- Interactive questions to get specific results
- Full text to determine if specific-purpose payments made are considered support payments
Answer interactive questions
Answer
The payments made are not considered support payments. They cannot be claimed as a deduction by the payer and do not have to be reported as income by the recipient.
You have told us:
- the payments made or received are not payable under a court order or written agreement
Answer
The specific-purpose payments made are not considered support payments. They cannot be claimed as a deduction by the payer and do not have to be reported as income by the recipient.
You have told us:
- the specific-purpose payments are not made under a court order or written agreement
Answer
The specific-purpose payments made are not considered support payments. They cannot be claimed as a deduction by the payer and do not have to be reported as income by the recipient.
You have told us:
- the following situations do not apply:
- The recipient is the payer's current or former spouse or common-law partner and the payer and recipient are living apart because of a breakdown in the relationship.
- The payer is the legal parent of a child of the recipient.
Answer
The specific-purpose payments made are not considered support payments. They cannot be claimed as a deduction by the payer and do not have to be reported as income by the recipient.
You have told us:
- the specific-purpose payments made are not to support the recipient, the children of the recipient, or both
Answer
The specific-purpose payments made are not considered support payments. They cannot be claimed as a deduction by the payer and do not have to be reported as income by the recipient.
You have told us:
- the court order or written agreement does not state that the recipient will include the payments in their income and that the payer can deduct them
Answer
The specific-purpose payments made are considered support payments. Go to Amount you can claim or report to find out if the support payments are taxable to the recipient and deductible by the payer.
You have told us:
- the specific-purpose payments made are for the benefit of the recipient
- the specific-purpose payments are made under a court order or written agreement
- at least one of the following situations apply:
- The recipient is the payer's current or former spouse or common-law partner and the payer and recipient are living apart because of a breakdown in the relationship.
- The payer is the legal parent of a child of the recipient.
- the specific-purpose payments are to support the recipient, the children of the recipient, or both
- the court order or written agreement states that the recipient will include the payments in their income and that the payer can deduct them
Read full text
Determine if specific-purpose payments made are considered support payments
The following is the alternate format to the above questions or results, and provides the same information in full-text.
A specific-purpose or third party payment is considered a support payment if the following five conditions are met:
- The specific purpose payments are made for the benefit of the recipient.
A written paternity agreement is not valid on its own, even if it is registered with the court. Paternity agreements must be a court order issued by a court or a tribunal in accordance with the laws of a province.
- The specific purpose payments are made under a court order or a written agreement.
- Either the payer is the legal parent of a child of the recipient or the recipient is the payer's current or former spouse or common-law partner and the payer and recipient are living apart because of a breakdown in the relationship.
- The specific-purpose payments support the recipient, children of the recipient or both.
- The court order or written agreement state that the recipient will include the payments in their income and that the payer can deduct them.
Go to Amount you can claim or report to find out if the support payments are taxable to the recipient and deductible by the payer.
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