'It's a joke': Woman battles CRA to change marital status for child benefits

A woman in Regina is joining other parents in speaking out about fighting the Canada Revenue Agency (CRA) over child tax benefits.

Julie Peebles faces a tax bill of almost $7,000 and says she missed out on years of tax benefits.

Her battle began in February 2014, when she and her husband of 20 years separated. The following spring, when she filed her income taxes, she declared her marital status as separated.

The CRA requested she provide documentation to show she was living apart from her ex-partner in order to be eligible to receive child tax benefits for their son. The parents share custody of their son. 

If the agency doesn't believe a parent is on his or her own, it counts both parents' income together, reducing the amount of benefits or tax a parent might be eligible for. 

Peebles said she provided a utility bill and two witnesses' statements confirming her separation.

She then received a letter, stating the agency had rejected her status change because she needed to provide receipts from her ex-husband to prove they were separated.

"If they need information from a third party, they have to contact the third party, whoever the third party is … they can't hold me responsible for someone who's not in my life," Peebles said. 

"I was going through legal mediation, and there's nothing more that I could have possibly done in this situation."

In an emailed statement, the CRA denied it requires a person to provide documents from a third party. But a spokesperson did say they would accept a letter from a trusted third party if a someone is unable to provide documentation suggested by the agency.

The CRA will accept a separation agreement, according to the statement, provided it contains information showing the former spouses are living at separate addresses.

The agency also encouraged those who are having difficulty with documentation to contact it to discuss possible alternatives.

Disagreement over dates

Peebles said after finalizing her separation this year, she provided that to the CRA.

The document outlines she and her ex-husband have been living apart since February 2014.

In a letter, the CRA says it revived Peebles's case and changed her marital status to separated effective Dec. 31, 2015, not 2014.

The agency said it would not reverse its decision for the time February 2014 to late 2015.

The agency says it believes Peebles was still living with her ex during that time, and the separation agreement is "insufficient" to support her marital status as separated for tax purposes.

"I think it's a joke, but there's nothing funny about this. It's affecting people's lives."

As a result of the CRA's decision, Peebles says she's missed out on thousands in tax benefits.

She recently learned the agency is reviewing her case because her ex has also applied for child benefits.

They have shared custody of their son, and now the CRA is requiring Peebles to provide documentation she is her son's primary caregiver.

Peebles missed the 30-day deadline, she said, because the documentation was too difficult to obtain. She was subsequently sent a tax bill for almost $7,000 to pay back benefits the agency says she has received.

In its statement, the CRA said: "We are working to improve the agency's services in the administration of the CCB [Child Canada Benefit] to ensure that they are more flexible and accessible for Canadians."