Child Support Guidelines: Difference between revisions
Jump to navigation
Jump to search
no edit summary
Nate Russell (talk | contribs) No edit summary |
Nate Russell (talk | contribs) No edit summary |
||
| Line 6: | Line 6: | ||
This page talks about the basic principles of the Guidelines, the sharing of special and extraordinary expenses, the calculation of income, imputing income, and the circumstances in which the income of a parent's or guardian's new partner may be taken into account. It also provides an example of the contents of a typical child support order. | This page talks about the basic principles of the Guidelines, the sharing of special and extraordinary expenses, the calculation of income, imputing income, and the circumstances in which the income of a parent's or guardian's new partner may be taken into account. It also provides an example of the contents of a typical child support order. | ||
==Basic | ==Basic principles== | ||
It used to be the case that the party claiming support, the ''recipient'', had to jump through all sorts of hoops to show the amount of support the child needed and prove that the person being asked to pay support, the ''payor'', had the means to pay that amount. These days, the amount of a child support order or an agreement for child support is based on the amounts set out in the tables attached to the Child Support Guidelines. The Guidelines has generally reduced the amount of time and money that parents spend fighting about child support, whether they're in court arguing about an order or are negotiating the amount of support for a separation agreement. | It used to be the case that the party claiming support, the ''recipient'', had to jump through all sorts of hoops to show the amount of support the child needed and prove that the person being asked to pay support, the ''payor'', had the means to pay that amount. These days, the amount of a child support order or an agreement for child support is based on the amounts set out in the tables attached to the Child Support Guidelines. The Guidelines has generally reduced the amount of time and money that parents spend fighting about child support, whether they're in court arguing about an order or are negotiating the amount of support for a separation agreement. | ||
| Line 18: | Line 18: | ||
<blockquote><blockquote><tt>(b) the amount, if any, determined under s. 7.</tt></blockquote></blockquote> | <blockquote><blockquote><tt>(b) the amount, if any, determined under s. 7.</tt></blockquote></blockquote> | ||
This is, however, only a presumption, and can be challenged or ''rebutted'' | This is, however, only a presumption, and can be challenged or ''rebutted'', as is discussed in the page on [[Exceptions to the Child Support Guidelines]] within this chapter. In the vast majority of cases, however, the amount of child support payable is calculated using the payor's gross annual income at the time the order is made. | ||
Over time, of course, the payor's income may go up or down. Both the payor and the recipient can make an application to change the original order so that the amount of child support reflects the payor's current income. The payor would typically make the application if his or her income has fallen, while the recipient would make the application when the payor's income has increased. To avoid a situation where parents are continually making trips back to court to seek an adjustment of child support, it's a good idea to include a term that requires both parties to regularly exchange income information in an agreement or order for child support, so that child support support can be adjusted from time to time without having to go to court. | Over time, of course, the payor's income may go up or down. Both the payor and the recipient can make an application to change the original order so that the amount of child support reflects the payor's current income. The payor would typically make the application if his or her income has fallen, while the recipient would make the application when the payor's income has increased. To avoid a situation where parents are continually making trips back to court to seek an adjustment of child support, it's a good idea to include a term that requires both parties to regularly exchange income information in an agreement or order for child support, so that child support support can be adjusted from time to time without having to go to court. | ||
| Line 26: | Line 26: | ||
Finally, the amount of support payable is based only on the payor's income. In most situations the recipient's income is not a factor, nor is the income of the payor's new spouse or partner. | Finally, the amount of support payable is based only on the payor's income. In most situations the recipient's income is not a factor, nor is the income of the payor's new spouse or partner. | ||
==Special and/or | ==Special and/or extraordinary expenses== | ||
The basic amount of child support a parent pays is presumed to cover a very wide scope of common day-to-day expenses associated with raising children: the child's share of the rent, the hydro and gas bills, shoes, groceries, diapers, clothes, toothpaste, school field trip fees and so forth. The basic amount of support is not always presumed to include certain other kinds of expenses that are infrequent but expensive, such as the cost of daycare or | The basic amount of child support a parent pays is presumed to cover a very wide scope of common day-to-day expenses associated with raising children: the child's share of the rent, the hydro and gas bills, shoes, groceries, diapers, clothes, toothpaste, school field trip fees and so forth. The basic amount of support is not always presumed to include certain other kinds of expenses that are infrequent but expensive, such as the cost of daycare or orthodontic work. In addition to the basic amount of support payable, a payor may also be required to cover a portion of these other expenses, so long as they qualify as ''special and/or extraordinary expenses'' under the Guidelines. | ||
Special and/or extraordinary expenses are defined in s. 7(1) of the Guidelines: | Special and/or extraordinary expenses are defined in s. 7(1) of the Guidelines: | ||
| Line 53: | Line 53: | ||
If an expense if found to qualify as a special and/or extraordinary expense under the s. 7(1) and (1.1) definitions, the court may make an order that both parties pay additional amounts, on top the usual Guidelines basic amount of support, to cover all or a portion of the cost of the expense. | If an expense if found to qualify as a special and/or extraordinary expense under the s. 7(1) and (1.1) definitions, the court may make an order that both parties pay additional amounts, on top the usual Guidelines basic amount of support, to cover all or a portion of the cost of the expense. | ||
===Qualifying | ===Qualifying expenses as "special and/or extraordinary"=== | ||
Just because an expense appears to fall into one of the categories listed in s. 7 of the Guidelines doesn't necessarily make it a shareable special and/or extraordinary expense. As well, just because an expense has been incurred doesn't mean it will automatically be shared; if you're not sure whether a planned expense will qualify as a shareable special expense, get some legal advice or talk to the other parent first. | Just because an expense appears to fall into one of the categories listed in s. 7 of the Guidelines doesn't necessarily make it a shareable special and/or extraordinary expense. As well, just because an expense has been incurred doesn't mean it will automatically be shared; if you're not sure whether a planned expense will qualify as a shareable special expense, get some legal advice or talk to the other parent first. | ||
| Line 59: | Line 59: | ||
According to s. 7(1) of the Guidelines, the court must not only find that an expense fits into one of the categories listed above, but also consider | According to s. 7(1) of the Guidelines, the court must not only find that an expense fits into one of the categories listed above, but also consider | ||
#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 | #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," and | ||
#the necessity of the expense in relation to the child's best interests, | #the necessity of the expense in relation to the child's best interests, | ||
bearing in mind the special test for primary- and secondary-school education and extracurricular activities required by s. 7(1.1). Here's a helpful summary from a 2010 case from our Supreme Court, ''Piper v. Piper'': | bearing in mind the special test for primary- and secondary-school education and extracurricular activities required by s. 7(1.1). Here's a helpful summary from a 2010 case from our Supreme Court, ''[http://canlii.ca/t/2dpzr Piper v. Piper]'', 2010 BCSC 1718: | ||
<blockquote>"Under s. 7(1.1)(a) the court is first required to consider whether the income of the requesting spouse, including any child support received, can reasonably cover the expense claimed or whether the expense exceeds her ability to pay without any consideration of the factors enumerated in s. 7(1.1)(b). If the income cannot cover the expense, the expense is deemed to be extraordinary and the court's next analysis turns to consideration of the factors enumerated in s. 7(1) which, of course, brings into consideration the parties' means and pre-separation spending pattern."</blockquote> | <blockquote>"Under s. 7(1.1)(a) the court is first required to consider whether the income of the requesting spouse, including any child support received, can reasonably cover the expense claimed or whether the expense exceeds her ability to pay without any consideration of the factors enumerated in s. 7(1.1)(b). If the income cannot cover the expense, the expense is deemed to be extraordinary and the court's next analysis turns to consideration of the factors enumerated in s. 7(1) which, of course, brings into consideration the parties' means and pre-separation spending pattern."</blockquote> | ||
| Line 96: | Line 96: | ||
*Lessons or coaching in arts and sports, where the child has a special talent that should be nurtured. | *Lessons or coaching in arts and sports, where the child has a special talent that should be nurtured. | ||
A driver training course, for example, is unlikely to qualify as a special expense under the heading of necessity, since you can learn to drive and obtain a driver's licence without it, as was decided in a 2011 Supreme Court case, ''M.S.J. v. J.M.J.'' On the other hand, if a semester with Sylvan will mean the difference between passing or failing a grade, the tutoring would be considered a necessity. | A driver training course, for example, is unlikely to qualify as a special expense under the heading of necessity, since you can learn to drive and obtain a driver's licence without it, as was decided in a 2011 Supreme Court case, ''[http://canlii.ca/t/2fzs4 M.S.J. v. J.M.J.]'', 2011 BCSC 245. On the other hand, if a semester with Sylvan Learning Centre will mean the difference between passing or failing a grade, the tutoring would be considered a necessity. | ||
===Sharing | ===Sharing qualifying expenses=== | ||
Under s. 7(2) of the Guidelines, expenses which qualify as special and/or extraordinary expenses are shared by the parties in proportion to their incomes, after deducting any contribution to those costs made by the child or the government, through things like grants or tax deductions. The idea here is to look at the total pot of money available to the child — the income of the payor plus the income of the recipient — and to figure how much each party's share of that pot is, and then pay the child's special expenses according to each parent's share. | Under s. 7(2) of the Guidelines, expenses which qualify as special and/or extraordinary expenses are shared by the parties in proportion to their incomes, after deducting any contribution to those costs made by the child or the government, through things like grants or tax deductions. The idea here is to look at the total pot of money available to the child — the income of the payor plus the income of the recipient — and to figure how much each party's share of that pot is, and then pay the child's special expenses according to each parent's share. | ||
| Line 115: | Line 115: | ||
The cost that is being shared is the ''net cost'' of an expense, in other words, the amount that is actually being paid after any third party contributions have been applied to reduce the expense. Daycare costs, for example, are usually partly subsidized by the government with certain tax deductions. If $1,000 is spent on daycare, but the government chips in a $200 tax benefit, the amount of the expense shared between the parents would be $800, not the full $1,000. | The cost that is being shared is the ''net cost'' of an expense, in other words, the amount that is actually being paid after any third party contributions have been applied to reduce the expense. Daycare costs, for example, are usually partly subsidized by the government with certain tax deductions. If $1,000 is spent on daycare, but the government chips in a $200 tax benefit, the amount of the expense shared between the parents would be $800, not the full $1,000. | ||
Note that the income of a parent's new spouse or partner can be taken into consideration in determining a parent's "means" in sharing a special expense. In the 2000 Supreme Court case of ''Baum v. Baum'', the court held that the s. 7(1) consideration of the "means of the spouses" should be interpreted broadly as including all sources of income available to the paying parent, including the income of a parent's new partner. | Note that the income of a parent's new spouse or partner can be taken into consideration in determining a parent's "means" in sharing a special expense. In the 2000 Supreme Court case of ''[http://canlii.ca/t/1fm6b Baum v. Baum]'', 2000 BCSC 1835 the court held that the s. 7(1) consideration of the "means of the spouses" should be interpreted broadly as including all sources of income available to the paying parent, including the income of a parent's new partner. | ||
==The | ==The calculation of income== | ||
Before the court even looks at the Child Support Guidelines tables it has to decide what the payor's income is. The tables set out the amount of child support payable according to the payor's income. The Guidelines require that the court use the most up-to-date information available. Sections 15 to 20 of the Guidelines set out the rules the court must apply in determing income. | Before the court even looks at the Child Support Guidelines tables it has to decide what the payor's income is. The tables set out the amount of child support payable according to the payor's income. The Guidelines require that the court use the most up-to-date information available. Sections 15 to 20 of the Guidelines set out the rules the court must apply in determing income. | ||
According to Rule 5-1 of the Supreme Court Family Rules and Rule 4 of the Provincial Court Family Rules, when someone makes an application for child support, the payor or both the payor and recipient are required to disclosure their financial circumstances using court form called a Financial Statement. Financial Statements require each party to set out their income and expenses, and assets and liabilities. Certain income documents must be attached to a Financial Statement, typically: | According to Rule 5-1 of the [http://canlii.ca/t/8mcr Supreme Court Family Rules] and Rule 4 of the [http://canlii.ca/t/85pb Provincial Court (Family) Rules], when someone makes an application for child support, the payor or both the payor and recipient are required to disclosure their financial circumstances using court form called a Financial Statement. Financial Statements require each party to set out their income and expenses, and assets and liabilities. Certain income documents must be attached to a Financial Statement, typically: | ||
# | #the last three years' worth of tax returns (what's required is the complete income tax and benefit return, not tax return "summaries" or "informations"), | ||
#all | #all Notices of Assessment and Reassessment received for the last three tax years, | ||
#the party's most recent paystub showing his or her earnings | #the party's most recent paystub, showing his or her earnings to date, or if the party isn't working, then his or her most recent WCB statement, social assistance statement or EI statement, and | ||
# | #business records like financial statements and corporate income tax returns, if the party has a company. | ||
The basic rule of thumb is that a party's income for the purposes of the Guidelines is the amount stated at line 150 of the payor's most recent tax return, although there are important exceptions that apply when a person's income is from self-employment. A party's income includes all of the party's income, not just income from a job. ''Income'' might include bonuses, rental income, company dividends, government benefits, interest from an investment and so forth, as well as employment and self-employment income. | The basic rule of thumb is that a party's income for the purposes of the Guidelines is the amount stated at line 150 of the payor's most recent tax return, although there are important exceptions that apply when a person's income is from self-employment. A party's income includes all of the party's income, not just income from a job. ''Income'' might include bonuses, rental income, company dividends, government benefits, interest from an investment and so forth, as well as employment and self-employment income. | ||
| Line 132: | Line 132: | ||
Section 2(3) of the Guidelines requires that the most current income information be used; this can include a calculation of income based on paystub evidence. Most of the time income is based on the most recent tax year, since the income information for that year is complete. This means that there is usually a one-year lag between the amount of support being paid and the payor's income. However, if a payor's current income can be known with certainty, such as if the payor is an employee without bonus or commission income, child support can be determined using the payor's current income. | Section 2(3) of the Guidelines requires that the most current income information be used; this can include a calculation of income based on paystub evidence. Most of the time income is based on the most recent tax year, since the income information for that year is complete. This means that there is usually a one-year lag between the amount of support being paid and the payor's income. However, if a payor's current income can be known with certainty, such as if the payor is an employee without bonus or commission income, child support can be determined using the payor's current income. | ||
===Government | ===Government benefits=== | ||
Payments from WCB, Employment Insurance, CPP, Old Age Security and welfare all count as income under the Guidelines. If a party is receiving these payments as a temporary subsitute for employment income, the party's income may be assessed at his or her usual income. A temporary period on welfare, for example, won't entitle a payor to have his or her income assessed at that unusually low level. | Payments from WCB, Employment Insurance, CPP, Old Age Security and welfare all count as income under the Guidelines. If a party is receiving these payments as a temporary subsitute for employment income, the party's income may be assessed at his or her usual income. A temporary period on welfare, for example, won't entitle a payor to have his or her income assessed at that unusually low level. | ||
===Fluctuating | ===Fluctuating income=== | ||
Where a party's income changes from year to year for reasons beyond the party's control, such as fluctuating commission sales or bonuses that are assessed by an employer, the court may take the party's income over the past three years into consideration in setting the payor's income. In certain circumstances, the court may fix the party's income as the ''average'' of his or her income over the last three years. | Where a party's income changes from year to year for reasons beyond the party's control, such as fluctuating commission sales or bonuses that are assessed by an employer, the court may take the party's income over the past three years into consideration in setting the payor's income. In certain circumstances, the court may fix the party's income as the ''average'' of his or her income over the last three years. | ||
===Unexpected | ===Unexpected losses and gains=== | ||
Where a payor has suffered an unexpected loss, such as a corporate loss or an investment loss, or enjoyed an unexpected gain, such as from cashing in RRSPs or selling stock, the court has the discretion to decide to take this into consideration in setting the payor's income, and potentially not consider the loos or gain. | Where a payor has suffered an unexpected loss, such as a corporate loss or an investment loss, or enjoyed an unexpected gain, such as from cashing in RRSPs or selling stock, the court has the discretion to decide to take this into consideration in setting the payor's income, and potentially not consider the loos or gain. | ||
| Line 156: | Line 156: | ||
To ''impute'' income means to attribute income to a payor above that which the payor claims he or she earns, usually for making a support award based on that higher amount. Typically, someone asks the court to impute income to a payor where: | To ''impute'' income means to attribute income to a payor above that which the payor claims he or she earns, usually for making a support award based on that higher amount. Typically, someone asks the court to impute income to a payor where: | ||
#the payor works in the service industry, for example as a restaurant server or a taxi driver, and receives tip income that is not reported on income tax returns | #the payor works in the service industry, for example as a restaurant server or a taxi driver, and receives tip income that is not reported on income tax returns, | ||
#the payor has quit or been fired from his or her job | #the payor has quit or been fired from his or her job, | ||
#he payor moves from full- to part-time work without a very good reason | #he payor moves from full- to part-time work without a very good reason, | ||
#the payor is self-employed and either receives unpaid benefits from his or her company (like a company car, paid meals or a free cell phone), or doesn't report the full amount of money taken from the company | #the payor is self-employed and either receives unpaid benefits from his or her company (like a company car, paid meals or a free cell phone), or doesn't report the full amount of money taken from the company, | ||
#the payor has refused to provide full and complete financial disclosure | #the payor has refused to provide full and complete financial disclosure, or | ||
#the payor has or will have income from a trust. | #the payor has or will have income from a trust. | ||
| Line 167: | Line 167: | ||
The court can decide to impute income for the purposes of calculating child support in other circumstances, such as when the payor is underemployed and unemployed, is income splitting with a new partner, or lives in a place with a lower tax rate than usual. | The court can decide to impute income for the purposes of calculating child support in other circumstances, such as when the payor is underemployed and unemployed, is income splitting with a new partner, or lives in a place with a lower tax rate than usual. | ||
===Underemployment and | ===Underemployment and unemployment=== | ||
Section 19(1) of the Guidelines says that: | Section 19(1) of the Guidelines says that: | ||
| Line 180: | Line 180: | ||
In other words, the court may decide that a payor has a different income than that which the payor says he or she has if: | In other words, the court may decide that a payor has a different income than that which the payor says he or she has if: | ||
#the payor has quit a job in order to avoid paying child support | #the payor has quit a job in order to avoid paying child support, | ||
#the payor has taken lower-paying work than he or she used to have, or is capable of holding, in order to minimize the amount of child support payable | #the payor has taken lower-paying work than he or she used to have, or is capable of holding, in order to minimize the amount of child support payable, | ||
#the payor has hidden or appears to have hidden some of his or her income | #the payor has hidden or appears to have hidden some of his or her income, | ||
#the payor is not using resources at hand to generate income which could be used to generate income, such as a vacant house that could be rented out or savings that could be invested | #the payor is not using resources at hand to generate income which could be used to generate income, such as a vacant house that could be rented out or savings that could be invested, or | ||
#the payor has tried to reduce his or her income by claiming unreasonable deductions. | #the payor has tried to reduce his or her income by claiming unreasonable deductions. | ||
If you are going to make an argument that income should be imputed to someone, you will have to prove that one or more of the conditions described in s. 19(1) exist. In the case of underemployment or unemployment, you will also have to show that the payor has acted in ''bad faith'', and is unemployed or underemployed intentionally. If a party's underemployment or unemployment is caused by child care responsibilities, the court will not usually impute income. | If you are going to make an argument that income should be imputed to someone, you will have to prove that one or more of the conditions described in s. 19(1) exist. In the case of underemployment or unemployment, you will also have to show that the payor has acted in ''bad faith'', and is unemployed or underemployed intentionally. If a party's underemployment or unemployment is caused by child care responsibilities, the court will not usually impute income. | ||
It's not enough merely to ''argue'' that one of the conditions listed in s. 19(1) exist, you have to be able to ''provide evidence'' that the condition exists. The following factors were cited by the court in a 2003 Supreme Court case, ''Nahu v. Chertkow'', in determining whether a payor is intentionally underemployed or unemployed: | It's not enough merely to ''argue'' that one of the conditions listed in s. 19(1) exist, you have to be able to ''provide evidence'' that the condition exists. The following factors were cited by the court in a 2003 Supreme Court case, ''[http://canlii.ca/t/1pt18 Nahu v. Chertkow]'', 2003 BCSC 1285 in determining whether a payor is intentionally underemployed or unemployed: | ||
#the payor's education, training and work experience | #the payor's education, training and work experience, | ||
#the payor's previous earnings and past borrowing of funds during unemployment | #the payor's previous earnings and past borrowing of funds during unemployment, | ||
#the payor's work history | #the payor's work history, | ||
#the payor's spending patterns and lifestyle | #the payor's spending patterns and lifestyle, | ||
#the payor's efforts to upgrade his or her education and work qualifications | #the payor's efforts to upgrade his or her education and work qualifications, | ||
#the nature and quality of the payor's attempts to obtain employment | #the nature and quality of the payor's attempts to obtain employment, and | ||
#any evidence that the underemployment or unemployment is motivated by ill will towards the recipient. | #any evidence that the underemployment or unemployment is motivated by ill will towards the recipient. | ||