Each parent has an obligation to provide child support, and that obligation is apportioned in accordance with the Federal Child Support Guidelines, which were introduced in 1997 in an attempt to simplify child support issues. The objectives of the Guidelines include the establishment of a fair standard of support for children that ensures that they continue to benefit from the financial means of both spouses after separation. Regular monthly child support payments determined after introduction of the Guidelines in 1997 are not tax deductible to the payor nor do they have to be included in the recipient’s income. Although the Guidelines did simplify child support issues somewhat, there are still numerous variables that can arise as potential roadblocks to resolving child support issues with your spouse. A Zeidman family lawyer can help you remove those barriers and get the child support your children are entitled to receive.
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Entitlement/Obligation to Child Support
Each parent has an obligation to provide financial support for their unmarried children who are minors or who are enrolled in school full time unless a child is 16 and has withdrawn from parental control (see section 31 of the Family Law Act). The right to receive child support is the right of the child. Generally, the parent with whom the children primarily reside (the “recipient”) will receive monthly payments of child support from the other parent (the “payor”) based on the other parent’s gross income. Both married and unmarried parents are subject to the same child support obligations. The general definition of “child” for support purposes under the Guidelines entails:
- one who is under the age of majority and who has not withdrawn from their parents’ charge; or
- one who is at least the age of majority and unable to obtain the necessities of life or withdraw from their parents’ charge by reason of illness, disability or other cause (e.g. full time schooling)
In some cases, the issue of whether or to what extent child support is payable is not clear cut.
The definition of “child” in the legislation does not refer specifically to biological children only. Thus, someone who is not the biological parent of a child may still become responsible to pay child support for that child after separation from their spouse. The question in determining whether an obligation exists is whether there was a settled intention for the parent to treat that child as his or her own. If this issue goes to court, a judge will look at numerous factors, some of which include:
- how many years the parties have lived together
- how old the child was when the parties started living together
- what level of contact the child has with his or her biological non-custodial parent
- whether the child referred to you as his or her parent
- what level of participation you had in raising the child
Split or Shared Custody
The type of custody arrangement in place may affect the amount of child support payable. Split custody occurs when there is more than one child and each parent has custody (or primary residence) of one or more of the children. In cases of Split Custody, section 8 of the Guidelines states the amount of child support will be the difference between the amount that each spouse would otherwise pay if a child support order were sought against each person. In other words, the spouse with the higher separate child support obligation will pay the difference in support to the other spouse.
Shared Custody occurs when a child or the children live with each parent at least 40% of the time. In these cases, the amount of child support payable will be determined after considering:
- the amounts set out in the applicable tables for each of the spouses;
- the increased costs of shared custody arrangements; and
- the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.
If a spouse claims that he or she would suffer “undue hardship” by having to pay the amount of child support normally required by the Guidelines, that spouse can apply to the court to have the amount of support reduced. According to section 10(2) of the Guidelines, circumstances that may cause undue hardship include the following:
- the spouse is responsible for many debts incurred to support the family prior to separation
- the spouse has unusually high expenses to exercise access visits
- the spouse has other support obligations under a court order or separation agreement
- the spouse has a legal duty to support another child
- the spouse has a legal duty to support anyone unable to obtain necessities of life because of illness or disability
Even if undue hardship exists, the court must deny an application to reduce child support if the standard of living in the payor’s household would be higher than that in the recipient’s household if child support was normally determined.
How is Child Support Calculated?
There are two types of child support payable under the Guidelines. There is a basic or Table Amount of child support meant to assist the recipient with basic costs for the children (e.g. food, shelter and clothing). In addition, the recipient may be entitled to receive contribution from the payor for Special or Extraordinary Expenses such as daycare, extracurricular activities, health care costs, dentists, etc. Please contact us to find out the monthly table amount of child support you are entitled to get or are required to pay.
Special or Extraordinary Expenses
These are also referred to as section 7 (of the Guidelines) Expenses and Add-Ons because they are above and beyond the Table Amount of child support. Examples of these types of expenses include the following:
- child care expenses
- extracurricular activities
- medical or dental expenses (not covered by a parent’s benefits plan)
- tuition for private school or post-secondary school
Parents are required by the Guidelines to contribute to Special or Extraordinary Expenses in proportion to their respective incomes after deducting the contribution, if any, from the child. In determining whether something qualifies as a Special or Extraordinary Expense, a court will consider the necessity of the expense in light of the children’s best interests as well as the reasonableness of the expense in light of the financial means of the spouses, the child, and the family’s spending pattern before separation.
The payor’s income level is central in determining child support obligations. Section 16 of the Guidelines states the payor’s annual income is determined by line 150 of their annual tax return, indicating total income. When a payor is a salaried employee, this determination can be simple. However, there are many situations that arise where the proper annual income to use for the payor is in question.
If a court believes that applying section 16 of the Guidelines would not yield the fairest determination of the payor’s income, the court can decide on an amount that is fair and reasonable in the circumstances having regard to your spouse’s income over the last three years and:
- any pattern of income during that time
- any fluctuation in income during that time
- or receipt of a non-recurring amount during that time
Spouse as Shareholder, Director or Officer
If a spouse is a shareholder, director or officer of a corporation, and if a court believes that applying section 16 of the Guidelines does not fairly reflect all of the income available to the spouse for paying child support, the court may consider income fluctuations and decide the spouse’s income includes:
- all or part of the pretax income of the corporation and any related corporation for the last taxation year; or
- an amount commensurate with services provided to the corporation by the spouse provided it is less than or equal to the corporation’s pretax income
In addition to this, a court can consider payments made or benefits given to people not dealing at arm’s length with the corporation in determining a corporation’s pretax income unless the spouse can prove such payments were reasonable.
The court is also empowered by the Guidelines to impute income to a spouse when it considers it appropriate to do so. This means a court can attribute income to a spouse for the purposes of determining appropriate child support even if that income is not paid or earned by the spouse. Circumstances in which courts will impute income include the following:
- the spouse is unemployed or underemployed other than as required by meeting the needs of a child or by attending to reasonable health or education needs of the spouse
- the spouse is exempt from federal or provincial income tax
- the spouse lives in a country whose income tax rates are much lower than Canada
- it appears that income has been diverted
- the spouse’s property is not reasonably used to generate income
- the spouse has failed to give income information when legally required to do so
- the spouse unreasonably deducts expenses from income (the reasonableness of a deduction is not solely governed by its acceptability under the Income Tax Act; in other words, family law judges can scrutinize deductions even more than Canada Revenue Agency)
- the spouse derives a significant portion of income from sources taxed at lower rates than business or employment income (e.g. dividends or capital gains)
- the spouse is a beneficiary under a trust and is receiving or will receive income or benefits from the trust
When Does Child Support Stop?
Each parent has an obligation to provide financial support for their unmarried children who are minors or who are enrolled in school full time unless a child is 16 and has withdrawn from parental control (see section 31 of the Family Law Act).
Termination of Support
One thing about child support that has not been changed by the guidelines is the question of when support ends. The Guidelines do say, however, that when a child reaches the age of 18, his or her income may be examined to determine an appropriate amount of support and the court has the discretion to make an order for an amount other than the table amount.There is really not much difference between the Divorce Act and the Family Law Act in terms of how a child is defined. Not so long ago, child support for a healthy child would generally end when the first of the following events occured:
- the child is 16 and no longer living at home or in school;
- the child is 18 years old and no longer in school;
- the child gets married; or
- the child receives his or her first undergraduate degree.
In the past few years, however, judicial attitudes have changed with respect to items (b) and (d). Increasingly, in the absence of express agreement between the parties in a separation agreement or court order, courts may find that because of the increased cost in post-secondary education costs many children have to work in order to save money for tuition. As a result, being 18 years old and out of school is no longer a guaranteed terminating event as far as child support is concerned.
Also, courts do not now necessarily consider one post-secondary degree sufficient to guarantee a child a reasonable job. It may well be that a second degree is justified in particular circumstances.
If the parties can agree on a termination clause and it is contained in either a consent order or a separation agreement, that will assist a payor who is seeking to end support. Support, however, is considered to be the right of the child and no agreement between the parties will oust the child’s right to be financially supported by his or her parents.
If you wish to consult the guidelines you may do so at Canada Justice.
This site provides the Guidelines themselves, the simplified tables, a guideline (a real one) to the Guidelines and other information about the legislation, including selected court cases that have examined and interpreted the Guidelines.
The publicly stated intention of the Guidelines is that they be a relatively simple and reliable way to resolve child support issues and to lessen conflict by providing certainty. Why fight if you know what the outcome is going to be? What they are, however, are almost 7,000 words of regulations based on a somewhat unrealistic view of financial expenses. New disputes between payors and recipients quickly replaced the old.
In most cases, however, the Guidelines operate in the straightforward and predictable way they were intended, especially if both parties are employees and there are few other issues involving expenses or hardship and above all, if there is some amount of good will between the parties.