Below are details regarding each step a court will follow in calculating child support in Canada under the Child Support Guidelines. The following steps apply regardless of whether the court is making a final order, or an interim order to be paid pending the final order.
Step 1: Determining the Table Amount
The Tables act as the child support calculator in Canada. They list the support owed based on annual income and number of children. For example, the support owed by a parent living in Ontario and earning $60,000 annually, with 2 children, will be $892/month. The support for a parent with an income of $100,000 and 2 children will be $1,416/month.
For many people, determining annual income will be straightforward. For salaried employees, line 150 on the tax return, “Total Income,” will be used as the basis for a child support calculation. Before the court will decide any tax claim, both the support payor and the recipient parent must submit their last 3 years tax returns and notices of assessment from CRA, as well as other documentation supporting their proof of income, such as statement of earnings to date for the current year.
For those who are self-employed or own their own business, determining annual income can be more difficult. If the support payor’s income fluctuates widely from year to year, for example as a result of self-employment or availability of overtime shifts, and the court determines that, as a result, then it would be unfair to use the current year’s income, the court can average the last 3 years’ income to determine the payor’s income for support purposes (see s. 17 of the Child Support Guidelines).
If a payor spouse is the shareholder, director, or officer in a company, then the court has the further power under s. 18 of the Guidelines to include in the payor’s income the pre-tax income of the corporation and any related corporations or any amount from the corporation that the court finds to be commensurate with the services the spouse provides. These powers are in place to prevent potential support payors from hiding income in their corporations.
There are also certain sources of income that will affect your Table amount of support that you may not think of as income. Examples would be non-recurring income such as RRSP redemptions, stock options, or severance pay. These sources of income, and other contributions, such as union dues, will have an effect on the Table amount of support.
Most law firms have software that allows them to easily take such factors into account when calculating child support. Are you concerned that your income for support purposes may be different than that reflected by Line 150 of your tax return? It is best to seek legal advice from a skilled family lawyer.
Imputed Income & Child Support
The court also has the power to “impute” income if it believes the payor is intentionally unemployed or underemployed, and therefore should be earning additional income for child support purposes.
For example, if a payor has worked considerable overtime shifts in the past, then courts will consider this potential income when evaluating capacity to pay. Provided the extra shifts do not interfere with the payor parent’s access visits with his or her children, the court will assume the parent can earn that income in the future. Often in these situations, courts are concerned that a spouse may in fact be working those additional shifts, but not declaring the income.
If a support payor has become unemployed or underemployed in order to go back to school or re-train, then the courts will investigate whether this unemployment is required for reasonable educational needs (and the burden is on that parent to show those needs are reasonable). If those needs are not considered reasonable, then the court will impute some or all of the parent’s former income. The court thereby tries to balance the needs of the child with the parent’s need to adapt to changing life circumstances.
Where both spouses agree in writing on the annual income of the payor spouse, the court will use that figure as the income for support purposes, provided it considers it reasonable.
For income over $150,000, the courts have discretion to depart from the Table amount. Section 4 of the Guidelines specifies two options courts can take for support payors who earn over $150,000:
- The court can award the applicable Table amount for that income, regardless of how high the support award might then be; or
- The court can take the Table amount for the first $150,000 (for 2 children, that amount is $2012/month) and for the balance of the income over the $150,000, it can add an amount it considers appropriate, “having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children.”
- Finally, the court would then add any section 7 expenses (see Step 2).
In reality, courts rarely depart from the amount calculated in the Table, even if that leads to a very high support award.
A 1999 Supreme Court case on this issue stated that there is a strong presumption in favour of using the Table amount for all income over $150,000, and that the support payor will have to show that the Table amount would be unsuitable in order for the court to deviate from it. In that case, the court upheld the use of the Table amount for an income of around $1 million/year. A more recent Ontario Court of Appeal case upheld the Table amount for an income of $1.65 million, which resulted in a child support award of $11,000/month.
Child Support Factors
The only factors that are relevant to a determination of the Table amount of support are the payor’s income, the number of children, and the province in which the payor resides.
The conduct of the recipient spouse does not affect the Table amount. For example, the spouse with custody of the children can remarry, begin a new relationship, or get a new job, and this will not affect the payor spouse’s Table amount.
The age of the children and their needs are also not relevant to the Table amount. Some of the children’s needs will be addressed by section 7 expenses.
Step 2: Adding Section 7 Expenses
“Section 7 expenses” refer to those expenses set out in section 7 of the Guidelines, which specifies that at either parent’s request payment can be ordered on top of the Table amount to cover any or all “special and extraordinary” expenses.
Whether or not an expense falls under section 7 will be determined by taking into account: (1) the “necessity of the expense in relation to the child’s best interests”; and (2): “the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation.”
Expenses listed as falling in the category of special or extraordinary are:
- Child care expenses incurred as a result of the custodial parent’s employment, illness, disability, or education or training for employment;
- The child’s medical and dental insurance premiums;
- Health expenses over $100 annually;
- Extraordinary expenses for primary and secondary students (generally, this includes private school tuition and tutoring);
- Post-secondary education expenses; and
- Some programs and activities.
The cost of all expenses determined to fall under section 7 are divided between the parents in proportion to their income. For example, if one spouse makes $75,000/year and the other makes $25,000, then the higher-earning spouse will pay for 75% of the expenses, and the other spouse will be expected to cover the remaining 25%. The payor spouse’s portion of the section 7 expenses will added to his or her Table amount of support to form the total support award.
It is not always clear if a certain expense should be considered an “extraordinary” expense for primary and secondary students, or if such an expense should simply be covered by the Table amount. If a child is enrolled in a particularly expensive extracurricular activity such as hockey, or a high-level competitive activity such as figure skating, then that expense will likely be considered extraordinary. Summer camp is another example of an expense usually considered a section 7 expense, depending on the parties’ collective incomes. However, other sports or music lessons, depending on their cost, the income of the parents, and the special needs and talents of the child, may not be considered extraordinary.
If either spouse applies for section 7 expenses, then he or she must provide a breakdown of the expenses and their cost. Both parents must also then provide a detailed financial statement.
Step 3: Is There a Reason to Depart from this Amount?
If the payor’s income is over $150,000, then the court has discretion to deviate from the Table amount. There are a few other situations in which the court either has the discretion or is required to depart from the Table amount.
If the child is over the age of majority, then under s. 3(2) of the Guidelines the court can either order the Table amount of support, or “the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.” This means that both parents’ incomes will be considered, as will the child’s own ability to support herself.
If a child is enrolled in post-secondary education and no longer living at home, then the court will often award the Table amount for the months at home, but not for the months spent at school. For the school months, rather than taking the Table amount and adding section 7 expenses for school costs, the court will instead look at the overall costs of maintaining the child, and all parties’ resources, and divide the costs using a section 7 approach – in other words, proportionate to income.
If the support payor is not a biological parent, but is standing in the place of a parent (for example a step parent), then the court can deviate from the Table amount and order the amount it deems appropriate, having regard to the Table amount that would apply, and the existence of any other parents with legal duties in relation to the child (see s. 5 of the Guidelines). This means that as a step-parent, your support payments may be adjusted to take into account the existence of a biological parent who is already paying support.
If the parents have split custody of their children (1 or more children live with 1 parent at least 60% of the time, and the remaining children live with the other parent at least 60% of the time), then s. 8 of the Guidelines specifies that the amount of support to be paid by the higher-income spouse to the lower-income one is the difference between their two Table amounts. In other words, the court would look at what the Table amount of support would be for each parent, if that parent were ordered to pay child support to the other. It then subtracts the lower-paid spouse’s amount from the higher-paid spouse’s amount. This is called the set-off amount, and it is the amount to be paid to the lower-income spouse.
Take as an example Spouse A and Spouse B, who have 3 children and have split custody of them. Spouse A makes $80,000/year and has custody of 1 of the children. Spouse B makes $50,000 and has custody of the other 2 children. The Table amount for Spouse A, who would be paying support for the 2 children living with Spouse B, would be $1,172/month. The Table amount for Spouse B for the 1 child living with Spouse A would be $450/month. Therefore, Spouse A would pay Spouse B $722/month ($1,172 – $450 = $722).
If the child spends more than 40% or more of his or her time with each parent annually (referred to as “shared custody”), under s. 9 of the Guidelines the court is to determine the amount of support by taking into account:
- 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 the child or children for whom support is sought.
It can often be difficult to determine whether the 40% threshold is met in situations where a child spends substantial time with each parent, because there is no standard method of calculation used by courts. Some judges will count the time in days, thereby including time the child spends at school or asleep in the 40% calculation; others will only count the hours the child spends with that parent as going toward the 40%.
Finally, if awarding the table amount would cause undue hardship to the payor, the court has discretion under s. 10 to deviate from the Table amount. Courts in Ontario have indicated that the test for undue hardship is a very difficult one to meet. In order to show undue hardship, the support payor must first establish that his or her household standard of living would be lower than that of the other parent if the Table amount were enforced. (Schedule 1 of the Guidelines contains the method to be used to determine standards of living of each household for the purposes of this comparison.)
The support payor then must go on to show that he or she meets one of the criteria specified in s. 10(2) as potentially creating undue hardship. Those criteria are:
- Unusually high debts incurred to earn a living or to support the family prior to separation;
- Unusually high expenses associated with exercising access to the children;
- Other support obligations; or
- Responsibilities for other children living in the household.
Only if both elements of the test are met does the court have discretion to decrease the Table amount as it considers appropriate.
Scheduling Payment of Child Support
Although the Table lists support obligations as monthly sums, the court has power under s. 11 of the Guidelines to order a lump sum payment, periodic payments, or a combination of the two. Monthly payments are the norm, but lump sum payments may be ordered for children over the age of majority (for post-secondary education expenses, for example).
Also, if there is a risk that the payor may default in the future, then the courts may convert the monthly amount into a lump sum or other periodic payments.
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