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 have fallen into arrears and one payment is made to bring these requirements up to date, that payment would be considered a support payment.

The following are generally not support payments:

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

For more information, see Interpretation Bulletin IT530, Support Payments.

Example
Jason and Tracy have been living separate and apart since August 2009. Their court order requires Jason to pay $500 per month for the Tracy's maintenance. In June 2010, Jason lost his job and was unable to make the spousal support payments. In February 2011, he got a new job. He is in arrears of $4,000. Jason and Tracy returned to court and reached a settlement where it was agreed that Jason will pay $3,500 of the $4000 he owes, the other $500 will not be paid.

The $3,500 lump-sum payment is considered a settlement amount paid by Jason to release him from his liability for the arrears and therefore does not qualify as a support payment because it was not made in accordance with the original agreement.

Forms and publications

• Guide P102, Support Payments
• IT530, Support Payments