P A R T C D e c i s i o n u n d e r A p p e a l T h e d e c i s i o n u n d e r a p p e a l i s t h e M i n i s t r y o f C h i l d r e r e c o n s i d e r a t i o n d e c i s i o n d a t e d M a r c h 1 2 , 2 0 1 4 w h i c h i l d c a r e s u b s i d i e s r e c e i v e d , a n d i s l i a b l e t o r e p a y • t h e f a m i l y ' s m o n t h l y n e t i n c o m e e x c e e d e d t h i n c o m e r e c e i v e d , p u r s u a n t t o S e c t i o n s 7 a n d a n d , • t h e c h i l d c a r e w a s n o t n e e d e d f o r o n e o f t h e C C S R . P A R T D R e l e v a n t L e g i s l a t i o n C h i l d C a r e S u b s i d y A c t ( C C S A ) , S e c t i o n s 5 a n d 7 C h i l d C a r e S u b s i d y R e g u l a t i o n ( C C S R ) , S e c t i o n 3 , I A P P E A L # n a n d F a m i l y D e v e l o p m e n t ( t h e m i n i s t r y ) c h f o u n d t h a t t h e a p p e l l a n t w a s n o t e l i g i b l e f o r t h e s e a m o u n t s , b e c a u s e : e c h i l d ' s t h r e s h o l d d u e t o u n c l a i m e d d i v i d e n d 9 o f t h e C h i l d C a r e S u b s i d y R e g u l a t i o n ( C C S R ) ; e l i g i b l e r e a s o n s l i s t e d i n S e c t i o n 3 ( 2 ) o f t h e 7 a n d 9
P A R T E S u m m a r v o f F a c t s T h e e v i d e n c e b e f o r e t h e m i n i s t r y a t t h e t i m e o f t h e 1 ) S t a t e m e n t o f C h i l d C a r e S u b s i d y P a y m e n t s M a r c h 2 0 1 2 ; 2 ) S t a t e m e n t o f B e n e f i t P l a n s f o r t h e p e r i o d A p 3 ) 2 0 1 2 A n n u a l R e p o r t f o r a B C c o m p a n y l i s t i n S e c r e t a r y / T r e a s u r e r a n d h i s m o t h e r a s t h e P 4 ) C h i l d C a r e S u b s i d y S e l f E m p l o y m e n t f o r m d g r o s s i n c o m e i s $ 5 6 , 0 0 0 a n d t h e p e r m i t t e d o o f $ 2 5 0 ; 5 ) C h i l d C a r e S u b s i d y S e l f E m p l o y m e n t f o r m d i n c o m e i s $ 5 0 , 0 0 0 a n d t h e p e r m i t t e d o p e r a t i $ 1 3 , 5 0 0 ; 6 ) C h i l d C a r e S u b s i d y S e l f E m p l o y m e n t f o r m d g r o s s i n c o m e i s $ 1 0 7 , 0 0 0 , t h e p e r m i t t e d o p e $ 9 , 1 6 0 ; 7 ) L e t t e r d a t e d M a y 1 8 , 2 0 1 3 f r o m t h e a p p e l l a n n o t i c e s o f a s s e s s m e n t f r o m C a n a d a R e v e n u r u n s h i s m o t h e r ' s f a m i l y b u s i n e s s b e c a u s e h d o i n g i t . H e r e c e i v e s r e s i d u a l c o m m i s s i o n i n a c t u a l i n c o m e o f $ 6 , 7 0 8 . 9 8 i n 2 0 1 0 a n d $ 6 , 9 o v e r t h e p a s t f e w y e a r s s o h i s m o t h e r d e c i d e d e c i d e d t o g i v e d i v i d e n d i n c o m e o n p a p e r t o n o t r e c e i v e a n y o f t h e s e a m o u n t s o f m o n e y f a s s e s s m e n t s . O n e v e r y o c c a s i o n t h a t t h e y d w e r e t o l d t h a t t h e o n l y i n c o m e r e p o r t e d o n t h h o u s e h o l d " , t o o n l y i n c l u d e i n c o m e t h a t t h e y a s s e s s m e n t h a s n e v e r e n t e r e d t h e i r h o u s e h o r e d u c e a c a p i t a l g a i n o n t h e s a l e o f a b u i l d i n g 8 ) T a x R e t u r n S u m m a r i e s a n d N o t i c e s o f A s s e s y e a r s 2 0 1 0 , 2 0 1 1 a n d 2 0 1 2 . F o r t h e a p p e l l a s h o w s a t a x a b l e a m o u n t o f d i v i d e n d s f r o m a c o m m i s s i o n i n c o m e o f $ 6 , 6 5 9 . 9 3 f o r t o t a l i n c S u m m a r y s h o w s d i v i d e n d s o f $ 4 0 , 0 0 0 p l u s n i n c o m e o f $ 4 6 , 9 0 4 . 6 3 . T h e 2 0 1 2 T a x R e t u r n c o m m i s s i o n i n c o m e o f $ 5 , 8 0 2 . 8 3 , u n i v e r s a l c $ 2 0 , 7 5 2 . 8 3 ; 9 ) L e t t e r d a t e d S e p t e m b e r 1 3 , 2 0 1 3 f r o m t h e m c a r e s u b s i d y b e n e f i t w a s c a l c u l a t e d a n d i s s u e m p l o y m e n t f o r b o t h t h e a p p e l l a n t a n d h e r s p t h a t t h e a p p e l l a n t ' s s p o u s e w a s n o t a c t u a l l y e f a c t a s s i s t i n g h i s p a r e n t w i t h o u t r e c o m p e n s e d i v i d e n d p a y m e n t s m a d e t o t h e a p p e l l a n t ' s s h a n d , i s r e p o r t a b l e a n d w h e n a v e r a g e d o v e r J u l y 2 0 1 2 a n d t h e n a r e d u c e d s u b s i d y f o r t h e e n c l o s e d o v e r p a y m e n t c a l c u l a t i o n f o r t h e s u m t h a t t h e m i n i s t r y b e l i e v e s w e r e r e c e i v e d a n d e l i a i b l e ;I A P P E A L # r e c o n s i d e r a t i o n d e c i s i o n i n c l u d e d : i s s u e d f o r t h e p e r i o d f r o m J u l y 2 0 1 0 t h r o u g h r i l 1 , 2 0 1 2 t h r o u g h A u g u s t 3 1 , 2 0 1 3 ; g t h e a p p e l l a n t ' s s p o u s e a s t h e r e s i d e n t ; a t e d N o v e m b e r 3 0 , 2 0 1 1 i n d i c a t i n g i n p a r t t h a t t h e p e r a t i n g e x p e n s e s a r e $ 5 5 , 7 5 0 , f o r a n e t i n c o m e a t e d J u n e 5 , 2 0 1 2 i n d i c a t i n g i n p a r t t h a t t h e g r o s s n g e x p e n s e s a r e $ 6 3 , 5 0 0 , f o r a n e t l o s s o f a t e d D e c e m b e r 2 , 2 0 1 2 i n d i c a t i n g i n p a r t t h a t t h e r a t i n g e x p e n s e s a r e $ 1 1 6 , 1 6 0 , f o r a n e t l o s s o f t a n d h e r s p o u s e t o t h e m i n i s t r y s t a t i n g i n p a r t t h a t e A g e n c y a r e p r o v i d e d . T h e a p p e l l a n t ' s s p o u s e i s m o t h e r i s i l l a n d h e d o e s n o t t a k e a n y p a y f o r c o m e f r o m a p r e v i o u s o c c u p a t i o n ; h e r e c e i v e d 3 8 . 9 7 i n 2 0 1 1 . T h e b u s i n e s s h a s n o t d o n e w e l l d t o s e l l t h e b u i l d i n g i n 2 0 1 0 a n d t h e a c c o u n t a n t s t h e a p p e l l a n t ' s s p o u s e a n d h i s m o t h e r . T h e y d i d r o m t h e d i v i d e n d i n c o m e s h o w i n g i n t h e i s c u s s e d t h e d i v i d e n d s w i t h t h e m i n i s t r y , t h e y e c h i l d s u b s i d y f o r m s i s " i n c o m e c o m i n g i n t o o u r a c t u a l l y r e c e i v e . T h e d i v i d e n d i n c o m e o n t h e l d a n d i s o n l y t h e r e f o r a c c o u n t i n g p u r p o s e s t o i n t h e n a m e o f h e r s p o u s e ' s m o t h e r ; s m e n t f o r t h e a p p e l l a n t a n d h e r s p o u s e f o r t h e n t ' s s p o u s e , t h e 2 0 1 0 T a x R e t u r n S u m m a r y t a x a b l e C a n a d i a n c o r p o r a t i o n o f $ 9 1 , 2 5 0 p l u s n e t o m e o f $ 9 7 , 9 0 9 . 9 3 . T h e 2 0 1 1 T a x R e t u r n e t c o m m i s s i o n i n c o m e o f $ 6 , 9 0 4 . 6 3 f o r t o t a l S u m m a r y s h o w s d i v i d e n d s o f $ 1 3 , 7 5 0 p l u s n e t h i l d c a r e b e n e f i t o f $ 1 , 2 0 0 a n d t o t a l i n c o m e o f i n i s t r y t o t h e a p p e l l a n t s t a t i n g i n p a r t t h a t t h e c h i l d e d b a s e d o n t h e r e a s o n f o r c a r e b e i n g o u s e . I t w a s b r o u g h t t o t h e m i n i s t r y ' s a t t e n t i o n m p l o y e d w i t h h i s m o t h e r ' s c o m p a n y b u t w a s i n . I n c o m e t a x d o c u m e n t s i n d i c a t e d s u b s t a n t i a l p o u s e . T h i s i n c o m e , a l t h o u g h n o t r e c e i v e d i n t h e y e a r s , r e d u c e d s u b s i d y e l i g i b i l i t y t o z e r o u n t i l p e r i o d A u g u s t 2 0 1 2 t o D e c e m b e r 2 0 1 2 . T h e o f $ 9 , 5 0 4 . 8 9 i n c l u d e s t h e a m o u n t s o f s u b s i d y f o r w h i c h t h e a p p e l l a n t m a y n o t h a v e b e e n
I APPEAL# 10)Letter dated September 25, 2013 from the appellant and her spouse to the ministry stating in part that they are in total disagreement with the ministry's assessment. The appellant's spouse has been employed by the company for some time. The fact that the company has not made any money for the past 4 years, due to economics in the area, is the reason that he has not been able to receive an income for his work. He has a signed employment contract and when the business sells, or his mother passes away, he will get paid accordingly. The "money we bring in to our home" is as they have stated on all correspondence. As far as the dividend income goes, they were never received into their hands. It was explained to them that "income" as it pertains to childcare subsidy, is money coming into their household. All of their conversations were taped and listening to them will explain their dispute. 11 ) Letter dated October 9, 2013 from the ministry to the appellant stating in part that the appellant's response was received by email on October 4, 2013 and the appellant was issued subsidy for the purpose of full-time employment for her and self-employment for her spouse. As the appellant's spouse was not paid for his work, he was considered as volunteering. 12)Letter dated October 20, 2013 from the appellant and her spouse to the ministry stating in part that they are in total disagreement with the ministry's assessment. The appellant's spouse was not a volunteer in his mother's family business. The appellant's spouse has a self employed contract which states that he was to receive $3,000 per month to manage the company. The business did not generate enough capital to pay the appellant's spouse and the payments owed are still outstanding; 13)Child Care Subsidy Eligibility Calculator dated October 29, 2013; 14)Email correspondence between the appellant's spouse and the ministry dated October 24, 2013 in which the ministry wrote that the ministry does not record actual conversations with the Child Care Subsidy Service Centre but record on the electronic running record when and why a particular client calls. The ministry provided information on the access to information process; and, 15)Request for Reconsideration-Reasons dated February 10, 2014. In her Request for Reconsideration, the appellant wrote that: • The dividend income was never 'received' by the appellant or her spouse. • In speaking with the ministry numerous times, income was described on all occasions as money which comes into the home as income and the money in question was never brought into their home as income. • The company is owned by the mother of the appellant's spouse. • The appellant's spouse had a contract with the company to help run the business for a salary of $3,000 per month and the company was not able to pay because of slow economic conditions. The building was sold which houses the business. • Without the appellant or her spouse knowing, the accountants allocated dividends to the name of the appellant's spouse to minimize capital gains taxes for the mother. • There is no money in the business since the bank owned most of the building. In her Notice of Appeal, the appellant expressed her disagreement with the ministry's reconsideration decision and wrote that no dividend money was received as it was only an accounting strategy. At the hearing the appellant and her spouse stated that: • They applied for the child care subsidy because, at the time, they were not bringing much income into the home and thev could not afford to oav for child care.
I APPEAL# • Although the appellant's spouse was supposed to receive $3,000 per month in salary from his mother's company, and he has a letter from his mother agreeing to that, the company did not do well for about 5 years and was in debt. • The appellant's spouse started working for the company in 2006 or 2007 and was trying to help his parents by getting the company out of debt. • The building that the company owned was sold to save the company. When asked, the appellant's spouse stated that he was not sure when the building was sold but it would have been either late in 2011 or in 2012. • There was a big loan on the building that had to be paid out on the sale, plus the other debts owed by the company, so the appellant's spouse did not receive anything towards his outstanding salary. The expense for wages paid to employees, as set out on the Self Employment forms, was for the 3 employees of the company since the company ran a service business as well as the real estate development business. • Since there was no money in his mother's company, the appellant's spouse never received a salary from the company. Both of his parents are ill and the company has since been sold to provide his parents with funds "in their old age." • The appellant and her spouse did not know that the company's accountants decided to pay dividends. The appellant and her spouse never lied about what they had received. They let the accountants do the planning and they decided to pay dividends into the owners' and directors' names. • Asked when the appellant and her spouse found out about the dividends, the appellant's spouse stated that they had a meeting with the accountants after the letter was received from the ministry. The accountants told them that they could receive up to $27,000 in dividend income with no tax repercussions. The tax payable on some of the dividends was about $7,000 and the bill was to be covered by the company. • There was a capital gain of about $300,000 on the sale of the building and the dividends were paid out of the company to avoid paying tax on the capital gain. The appellant's spouse understood that by paying the dividends, the profit on the sale of the building would be reduced. • While the tax information shows that dividends were paid to him and that his total income was around $97,000 in 2010 and $46,000 for 2011, the dividend amounts were not reported to the ministry because the dividends were not received into the household. • The commission amounts indicated in the tax information are from the previous employment of the appellant's spouse, that continues to pay residual annuity payments. They thought these payments were reported to the ministry. • Asked about Child Care Subsidy Self-Employment forms filed with the ministry, the appellant's spouse stated that the gross income amounts are income to his mother's company and not his self-employment income. The permitted operating expenses were estimated by him because the ministry asked what the company was making and pressed for some information and he is "not sure if it is even close." The ministry relied on its reconsideration decision. The facts included: • There are 3 people in the appellant's family unit, including the appellant, her spouse and their child. • In July 201O the appellant applied for a child care subsidy. The appellant reported that she was employed with a financial institution and her spouse was self-employed with a company. • From June 2010 to December 2012 the aooellant submitted Self-Employment forms to declare
s e l f e m p l o y m e n t i n c o m e e a r n e d b y t h e a p p e • O n J a n u a r y 9 , 2 0 1 3 t h e a p p e l l a n t a d v i s e d t h a p p e l l a n t ' s s p o u s e . T h e a p p e l l a n t ' s s p o u s e s a l a r y . I n s t e a d o f s e l f e m p l o y m e n t i n c o m e , i n c o m e f r o m a f o r m e r i n v e s t m e n t o f a p p r o x i m s p o u s e t h o u g h t t h i s w a s r e f l e c t e d o n t h e C h i n f o r m a t i o n h a d n o t b e e n r e p o r t e d . • I n M a y 2 0 1 3 , t h e a p p e l l a n t p r o v i d e d N o t i c e s A g e n c y f o r t h e y e a r s 2 0 1 0 , 2 0 1 1 a n d 2 0 1 2 w d i v i d e n d s r e c e i v e d b y t h e a p p e l l a n t ' s s p o u s e 2 0 1 1 a n d $ 1 3 , 7 5 0 f o r 2 0 1 2 .I A P P E A L # l l a n t ' s s p o u s e . a t t h e c o m p a n y i s o w n e d b y t h e m o t h e r o f t h e i s a d i r e c t o r o f t h e c o m p a n y a n d n o t d r a w i n g a t h e a p p e l l a n t ' s s p o u s e w a s i n r e c e i p t o f r e s i d u a l a t e l y $ 7 5 0 p e r m o n t h . T h e a p p e l l a n t a n d h e r i l d C a r e S u b s i d y a p p l i c a t i o n f o r m , b u t t h e o f A s s e s s m e n t f r o m t h e C a n a d a R e v e n u e h i c h s h o w s a d d i t i o n a l i n c o m e i n t a x a b l e i n t h e a m o u n t o f $ 9 1 , 2 5 0 i n 2 0 1 0 , $ 4 0 , 0 0 0 f o r
I APPEAL/! PART F -Reasons fo r Panel Decision The issue on the appeal is whether the ministry's decision, which found that the appellant was not eligible for child care subsidies received because the family's monthly net income exceeded the child's threshold due to unclaimed dividend income received, pursuant to Sections 7 and 9 of the Child Care Subsidy Regulation (CCSR), was reasonably supported by the evidence or a reasonable application of the applicable enactment in the circumstances of the appellant. Section 5 of the Child Care Subsidy Act (CCSA), provides: Information and verification 5 (1) For the purpose of determining or auditing eligibility for child care subsidies, the minister may do one or more of the following: (a) direct a person who has applied for a child care subsidy, or to or for whom a child care subsidy is paid, to supply the minister with information within the time and in the manner specified by the minister; (b) seek verification of any information supplied by a person referred to in paragraph (a); (c) direct a person referred to in paragraph (a) to supply verification of any information supplied by that person or another person; ( d ) collect from a person information about another person if (i) the information relates to the application for or payment of a child care subsidy, and (ii) the minister has not solicited the information from the person who provides it. (2) A person to or for whom a child care subsidy is paid must notify the minister, within the time and in the manner specified by regulation, of any change in circumstances affecting their eligibility under this Act. (3) If a person fails to comply with a direction under subsection (1) (a) or (c) or with subsection (2), the minister may (a) declare the person ineligible for a child care subsidy until the person complies, or (b) reduce the person's child care subsidy. ( 4) For the purpose of auditing child care subsidies, the minister may direct child care providers to supply the minister with information about any child care they provide that is subsidized under this Act. Section 7 of the CCSA provides: Overpayments, repayments and assignments 7 (1) If a child care subsidy is paid to or for a person who is not entitled to it, that person is liable to repay to the government the amount to which the person was not entitled. (2) Subject to the regulations, the minister may enter into an agreement, or may accept any right assigned, for the repayment of a child care subsidy. (3) A repayment agreement may be entered into before or after a child care subsidy is paid. (4) An amount that a person is liable to repay under subsection (1) or under an agreement entered into under subsection (2) is a debt due to the government and may (a) be recovered by it in a court of competent jurisdiction, or (b) be deducted by it from any subsequent child care subsidy or from an amount payable to that person by the government under a prescribed enactment. (5) The minister's decision about the amount a person is liable to repay under subsection (1) or under an agreement entered into under subsection (2) is not open to appeal under section 6 (3). Section 3 of the Child Care Subsidy Regulation (CCSR), provides: Circumstances in which subsidy may be provided 3 (1) The minister may pay a child care subsidy only if (a) the minister is satisfied that the child care is needed for one of the reasons set out in subsection (2), (b) the child care is arranaed or recommended under the Child, Family and Communitv Service Act, or
( c ) t h e c h i l d c a r e i s r e c o m m e n d e d u n d e r t h e C o m h a s a p a r e n t a p p r o v e d f o r o r r e c e i v i n g c o m m u A c t a n d t h e m i n i s t e r i s s a t i s f i e d t h a t t h e c h i l d ( 2 ) F o r t h e p u r p o s e o f s u b s e c t i o n ( 1 ) ( a ) , t h e c h i l d c a ( a ) i n a s i n g l e p a r e n t f a m i l y , b e c a u s e t h e p a r e n t ( i ) i s e m p l o y e d o r s e l f e m p l o y e d , ( i i ) a t t e n d s a n e d u c a t i o n a l i n s t i t u t i o n , ( i i i ) i s s e e k i n g e m p l o y m e n t o r p a r t i c i p a t i n g i n ( i v ) h a s a m e d i c a l c o n d i t i o n t h a t i n t e r f e r e s w i t ( b ) i n a t w o p a r e n t f a m i l y , b e c a u s e ( i ) e a c h p a r e n t i s e m p l o y e d o r s e l f e m p l o y e d , e m p l o y m e n t r e l a t e d p r o g r a m , ( i i ) o n e p a r e n t i s e n g a g e d i n a n a c t i v i t y l i s t e d e m p l o y m e n t , ( i i i ) o n e p a r e n t i s e n g a g e d i n a n a c t i v i t y l i s t e d c o n d i t i o n t h a t i n t e r f e r e s w i t h t h a t p a r e n t ' s ( i v ) R e p e a l e d . [ B . C . R e g . 5 7 / 2 0 0 2 , s . 2 ( b ) . ] ( v ) e a c h p a r e n t h a s a m e d i c a l c o n d i t i o n t h a t i n S e c t i o n 7 ( 1 ) o f t h e C C S R p r o v i d e s : I n c o m e t e s t 7 ( 1 ) A n a p p l i c a n t i s n o t e l i g i b l e f o r a c h i l d c a r e s u b s i d y ( a ) t h e f a m i l y ' s m o n t h l y n e t i n c o m e e x c e e d s t h e c ( b ) t h e r e s u l t o f t h e c a l c u l a t i o n u n d e r s e c t i o n 8 ( 2 ) S e c t i o n 9 ( 1 ) o f t h e C C S R p r o v i d e s : H o w m o n t h l y n e t i n c o m e i s c a l c u l a t e d 9 ( 1 ) T h e m o n t h l y n e t i n c o m e o f a f a m i l y i s c a l c u l a t e d b r e c e i v e s p e r m o n t h , i n c l u d i n g , b u t n o t l i m i t e d t o , t ( a ) e m p l o y m e n t i n c o m e ; ( b ) s e l f e m p l o y m e n t i n c o m e ; ( c ) s p o u s a l o r c h i l d s u p p o r t p a i d t o a s p o u s e o r c h ( d ) e m p l o y m e n t i n s u r a n c e b e n e f i t s ; ( e ) w o r k e r s ' c o m p e n s a t i o n b e n e f i t s ; ( f ) t r a i n i n g a l l o w a n c e s ; ( g ) i n v e s t m e n t i n c o m e , i n c l u d i n g i n t e r e s t ; ( h ) t i p s a n d g r a t u i t i e s ; ( i ) m o n e y e a r n e d b y p r o v i d i n g r o o m a n d b o a r d , l e s U ) r e n t a l i n c o m e o f a n y k i n d , l e s s e s s e n t i a l o p e r a t i ( k ) g r a n t s , b u r s a r i e s o r s c h o l a r s h i p s , e x c e p t ( i ) t h e a m o u n t f o r t u i t i o n o r b o o k s , a n d ( i i ) w i t h r e s p e c t t o g r a n t s p r o v i d e d u n d e r t h e B e a c h w e e k c o v e r e d b y t h e g r a n t . M i n i s t ry ' s P o s i t i o n T h e m i n i s t r y ' s p o s i t i o n i s t h a t t h e a p p e l l a n t w a s n o t p e r i o d J u n e 2 0 1 0 t h r o u g h D e c e m b e r 2 0 1 2 b e c a u s e c h i l d ' s t h r e s h o l d d u e t o d i v i d e n d i n c o m e r e c e i v e d o C C S R , a n d t h e c h i l d c a r e w a s n o t n e e d e d f o r o n e o C C S R a s t h e a p p e l l a n t ' s s p o u s e w a s n o t g e t t i n g p a a r n u e d t h a t t h e t a x i n f o r m a t i o n r e c e i v e d i n 2 0 1 3 f o r A P P E A L # I m u n i t y L i v i n g A u t h o r i t y A c t i n r e s p e c t o f a c h i l d w h o n i t y l i v i n g s u p p o r t u n d e r t h e C o m m u n i t y L i v i n g A u t h o r i t y c a r e i s n e e d e d . r e m u s t b e n e e d e d f o r o n e o f t h e f o l l o w i n g r e a s o n s : a n e m p l o y m e n t r e l a t e d p r o g r a m , o r h t h e p a r e n t ' s a b i l i t y t o c a r e f o r h i s o r h e r c h i l d ; a t t e n d s a n e d u c a t i o n a l i n s t i t u t i o n o r p a r t i c i p a t e s i n a n i n s u b p a r a g r a p h ( i ) a n d t h e o t h e r i s s e e k i n g i n s u b p a r a g r a p h ( i ) a n d t h e o t h e r p a r e n t h a s a m e d i c a l a b i l i t y t o c a r e f o r h i s o r h e r c h i l d , o r t e r f e r e s w i t h t h e i r a b i l i t y t o c a r e f o r t h e i r c h i l d . f o r a c h i l d r e c e i v i n g a t y p e o f c h i l d c a r e i f h i l d ' s t h r e s h o l d , a n d f o r t h e c h i l d i s n o t m o r e t h a n z e r o . y a d d i n g t h e i n c o m e t h a t e a c h p e r s o n i n t h e f a m i l y h e f o l l o w i n g : i l d i n t h e f a m i l y ; s e s s e n t i a l o p e r a t i n g c o s t s ; n g c o s t s ; r i t i s h C o l u m b i a S t u d e n t A s s i s t a n c e P r o g r a m , $ 5 0 f o r e l i g i b l e f o r c h i l d c a r e s u b s i d i e s r e c e i v e d o v e r t h e t h e f a m i l y ' s m o n t h l y n e t i n c o m e e x c e e d e d t h e v e r t h e p e r i o d , p u r s u a n t t o S e c t i o n s 7 a n d 9 o f t h e f t h e e l i g i b l e r e a s o n s l i s t e d i n S e c t i o n 3 ( 2 ) o f t h e i d f o r h i s w o r k w i t h t h e c o m p a n y . T h e m i n i s t r y t h e a n n e l l a n t ' s s p o u s e i n d i c a t e s t h a t t a x a b l e
I APPEAL# dividends were received in the years 2010, 2011 and 2012 and must be included in the calculation of the family's monthly net income as these amounts are considered income from investments, as set out in Section 9(1) of the CCSR. The ministry argued that the dividends increase the net income used to calculate subsidy eligibility, and were not reported to the ministry. The ministry argued that due to the total income of the appellant's family unit, she was not eligible for the child care subsidy from June 2010 to July 2012 and she was eligible for a reduced subsidy for the period August 2012 to December 2012. Appellant's position The appellant's position is that the amounts set out for dividend income on the tax information for the appellant's spouse was not reported to the ministry because these funds were never received into their household income. The company for which the appellant's spouse is a director sold a building because the company was not doing well and the accountants decided to give dividend income on paper to the appellant's spouse and his mother to reduce the capital gains tax payable. The appellant argued that on every occasion that they discussed the dividends with the ministry they were told that the only income reported on the child subsidy forms is "income coming into our household." The appellant also argued that her spouse has been employed by his mother's company for some time and the fact that the company has not made any money for the past 4 years, due to economics in the area, is the reason that he has not been able to receive an income for his work. The appellant argued that he has a signed employment contract/letter which states that he was to receive $3,000 per month to manage the company and when the business sells, or his mother passes away, he will get paid accordingly. The appellant argued that her spouse was not a volunteer in his mother's family business. Panel decision Section 7 (1) of the CCSA stipulates that if a child care subsidy is paid to or for a person who is not entitled to it, that person is liable to repay to the government the amount to which the person was not entitled. The issue to be considered by the panel on this appeal is whether the appellant received child care subsidies at any time over the period June 201O to December 2012 for which she was not entitled. The appellant does not dispute that her spouse's 2010 Tax Return Summary shows a taxable amount of dividends received from a taxable Canadian corporation of $91, 250 and, while the appellant acknowledged that this amount was not reported to the ministry, she explained that they were told by the ministry to only report income coming into their household. It was not until May 2013 that the appellant provided tax information to the ministry, in the form of Tax Return Summaries and Notices of Assessment from the Canada Revenue Agency for the years 2010, 2011 and 2012, that the ministry was able to consider the appellant's eligibility for the child care subsidy over the period June 201O to December 2012 in light of this specific information about the payment of dividends. Section 9(1)(g) of the CCSR provides that the monthly net income of a family is calculated by adding the income that each person in the family receives per month, including investment income and interest. While the appellant and her spouse argued that he did not actually receive any of the funds, the panel finds that it is more likely than not that the dividend income was received by the appellant's spouse. The appellant's spouse acknowledged that he reported to Revenue Canada that this dividend income was received by him in the years 2010, 2011 and 2012. The panel finds that the ministry reasonably relied on the appellant's report to Revenue Canada as indicating that dividend income was received by him in the amounts that he claimed in his personal income tax returns for the 2010, 2011 and 2012 tax years as he is ultimately responsible for accurate filing of his personal income tax returns. The panel finds further that the ministrv reasonably considered this dividend
i n c o m e t o b e i n v e s t m e n t i n c o m e a n d p a r t o f t h e m o u t i n S e c t i o n 9 o f t h e C C S R . T h e a p p e l l a n t s t a t e d t h a t p a y m e n t o f d i v i d e n d s w a a d v a n t a g e t o t h e c o m p a n y b y r e d u c i n g t h e t a x p a y c o m p a n y a n d t h a t t h e d i v i d e n d s w e r e n o t a c t u a l l y p p l a c e s l e s s w e i g h t o n t h e e v i d e n c e o f t h e a p p e l l a n i n c o n s i s t e n c i e s , i n c l u d i n g : • t h e a p p e l l a n t ' s s p o u s e s t a t e d t h a t h e h a s b e a n d a c k n o w l e d g e d t h a t h e w a s t h e S e c r e t a r A n n u a l R e p o r t , a n d y e t h e s t a t e d t h a t h e h a u n t i l t h e y r e c e i v e d a l e t t e r f r o m t h e m i n i s t r y . C a n a d a o n t h e d i v i d e n d i n c o m e r e p o r t e d b y l e t t e r t o t h e m i n i s t r y d a t e d M a y 1 8 , 2 0 1 3 ; • t h e a p p e l l a n t ' s s p o u s e s t a t e d t h a t d i v i d e n d s t h a t w e r e r e a l i z e d o n t h e s a l e o f t h e b u i l d i n g e a r l y i n 2 0 1 2 . H o w e v e r , t h e d i v i d e n d i n c o m t h e a p p e l l a n t ' s s p o u s e s t a rt i n g i n t h e y e a r 2 0 b u i l d i n g w a s s o l d . • t h e a p p e l l a n t ' s s p o u s e s t a t e d t h a t h i s r e p o r t S u b s i d y S e l f E m p l o y m e n t f o r m s w a s f o r h i s s e l f e m p l o y m e n t . H e s t a t e d t h a t t h e c a p i t a l e a r l y i n 2 0 1 2 w a s $ 3 0 0 , 0 0 0 a n d y e t h i s r e p o c o m p a n y a s o f N o v e m b e r 3 0 , 2 0 1 1 o f $ 5 6 , 0 $ 1 0 7 , 0 0 0 . • t h e a p p e l l a n t a n d h e r s p o u s e s t a t e d i n t h e M a p p e l l a n t ' s s p o u s e r e c e i v e s r e s i d u a l c o m m i s h e r e c e i v e d t h i s i n c o m e o f $ 6 , 7 0 8 . 9 8 i n 2 0 1 0 t h a t t h e y t h o u g h t t h i s i n c o m e w a s r e p o r t e d t o t h i s i n c o m e f r o m c o m m i s s i o n s w a s n o t r e p o r • t h e a p p e l l a n t ' s s p o u s e s t a t e d h e s t a r t e d w o r a n d , i n a l e t t e r t o t h e m i n i s t r y , t h a t h e h a s a s a g r e e d t h a t h e w a s t o r e c e i v e $ 3 , 0 0 0 p e r m o i t o u t o f d e b t . I n t h e l e t t e r t o t h e m i n i s t r y d a t e b u s i n e s s s e l l s , o r h i s m o t h e r p a s s e s a w a y , h e m p l o y m e n t c o n t r a c t . T h e a p p e l l a n t s t a t e d t t h e c o m p a n y , a s r e p o r t e d b y h i m i n t h e S e l f s t a t e d a t t h e h e a r i n g t h a t t h e c o m p a n y h a s " p r o f i t t o h i s s e l f e m p l o y m e n t b u s i n e s s a f t e r a t h e p a n e l f i n d s t h a t i t i s m o r e l i k e l y t h a n n o t t s p o u s e . I f t h e r e w a s n o r e a s o n a b l e e x p e c t a w i t h i n a r e a s o n a b l e p e r i o d o f t i m e , t h e p a n e l t h e a p p e l l a n t ' s s p o u s e w a s a v a i l a b l e t o p r o v i h i s t i m e f o r h i s m o t h e r ' s c o m p a n y , p u r s u a n t o u t i n S e c t i o n 3 ( 2 ) ( b ) o f t h e C S S R . T h e p a n e l c o n c l u d e s t h a t S e c t i o n 3 o f C S S R , w h i c h w a s n o t a b a s i s f o r d e n i a l o f e l i i b i l i t f o r t h e c h i l d c I A P P E A L # o n t h l y n e t i n c o m e o f t h e a p p e l l a n t ' s f a m i l y , a s s e t s r e c o m m e n d e d b y t h e a c c o u n t a n t s t o g a i n a n a b l e o n t h e s a l e o f a b u i l d i n g o w n e d b y t h e a i d t o h i m , i t w a s j u s t " o n p a p e r . " T h e p a n e l t a n d h e r s p o u s e a s t h e r e w e r e a n u m b e r o f e n m a n a g i n g t h e c o m p a n y s i n c e 2 0 0 6 o r 2 0 0 7 y / T r e a s u r e r , a s l i s t e d o n t h e 2 0 1 2 c o r p o r a t e d n o i d e a t h a t d i v i d e n d s w e r e p a i d b y t h e c o m p a n y T h e r e w o u l d h a v e b e e n t a x o w i n g t o R e v e n u e t h e a p p e l l a n t ' s s p o u s e , a s a c k n o w l e d g e d i n t h e i r w e r e p a i d b y t h e c o m p a n y t o r e d u c e c a p i t a l g a i n s a n d t h a t t h e b u i l d i n g w a s s o l d l a t e i n 2 0 1 1 o r e w a s r e p o r t e d t o R e v e n u e C a n a d a a s r e c e i v e d b y 1 0 , p r i o r t o t h e e a r l i e s t d a t e t h a t h e s a i d t h e i n g p r o v i d e d t o t h e m i n i s t r y i n t h e C h i l d C a r e m o t h e r ' s c o m p a n y a n d n o t f o r h i s i n c o m e f r o m g a i n r e a l i z e d o n s a l e o f t h e b u i l d i n g l a t e i n 2 0 1 1 o r r t i n g t o t h e m i n i s t r y w a s f o r g r o s s i n c o m e f o r t h e 0 0 a n d g r o s s i n c o m e a s o f D e c e m b e r 2 , 2 0 1 2 o f a y 1 8 , 2 0 1 3 l e t t e r t o t h e m i n i s t r y t h a t t h e s i o n i n c o m e f r o m a p r e v i o u s o c c u p a t i o n a n d t h a t a n d $ 6 , 9 3 8 . 9 7 i n 2 0 1 1 . T h e a p p e l l a n t s t a t e d t h e m i n i s t r y , b u t t h e m i n i s t r y ' s e v i d e n c e i s t h a t t e d t o t h e m i n i s t r y k i n g f o r h i s m o t h e r ' s c o m p a n y i n 2 0 0 6 o r 2 0 0 7 i g n e d e m p l o y m e n t c o n t r a c t i n w h i c h i t w a s n t h f o r m a n a g i n g t h e c o m p a n y a n d h e l p i n g t o g e t d S e p t e m b e r 2 5 , 2 0 1 3 , h e s t a t e d t h a t w h e n t h e e w i l l g e t p a i d a c c o r d i n g t o h i s s i g n e d h a t t h e w a g e s w e r e p a i d t o 3 o t h e r e m p l o y e e s o f E m p l o y m e n t f o r m s . T h e a p p e l l a n t ' s s p o u s e s i n c e s o l d " a n d , g i v e n a r e a s o n a b l e e x p e c t a t i o n o f p p r o x i m a t e l y 7 y e a r s o f w o r k i n g f o r t h e c o m p a n y , h a t a b e n e f i t w a s r e c e i v e d b y t h e a p p e l l a n t ' s t i o n o f p r o f i t t o h i s s e l f e m p l o y m e n t b u s i n e s s f i n d s t h a t t h e m i n i s t r y r e a s o n a b l y e x p e c t e d t h a t d e c h i l d c a r e t o h i s c h i l d r a t h e r t h a n v o l u n t e e r i n g t o t h e r e q u i r e m e n t f o r a t w o p a r e n t f a m i l y a s s e t a d d r e s s e s t h e e l i g i b l e r e a s o n s f o r c h i l d c a r e , a r e s u b s i d i v e n t h e m i n i s ! ' s r i m a a n a l y s i s
in th e reconsi der at ion deci sion of the mon thly net inco th e CSSR and the mi n is try's dete rm in ation of p art i al appel lant's spouse stat ed he was no t paid salary for his work wi that he was in receipt of compe nsation in the fo rm Co n clus ion The panel find s tha t th e ministry's d ecision, which found l iable to r e pay, child care sub sidies received because the fa chi ld's thres h o ld due to u n claim ed divid e n d income rec CCSR, was a reason a ble a pplica tion of t he applicable enact and the panel confirms the decisi on. I APPE AL# me of the appellan t's f amily un d er S ection 9 of s ubsidy eligibili ty during a per iod when the th t he c ompany bu t the m inistry f ound of d iv i dend income. that the appellant was not el i gible fo r , and is mily's mont hly net i ncome e xceeded the eived, pursuant to Secti o n s 7 and 9 of t he m en t in the a ppellant' s circumst ances
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.