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Difference between revisions of "Child Support Guidelines"
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This is, however, only a presumption, and can be challenged or ''rebutted'', as is discussed in this chapter's next section, [[Exceptions to the Child Support Guidelines]]. In the vast majority of cases, however, the amount of child support payable is calculated using the payor's gross (before tax) annual income at the time the order is made. | This is, however, only a presumption, and can be challenged or ''rebutted'', as is discussed in this chapter's next section, [[Exceptions to the Child Support Guidelines]]. In the vast majority of cases, however, the amount of child support payable is calculated using the payor's gross (before tax) 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 or the agreement so that the amount of child support reflects the payor's current income. The payor would typically make the application if | 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 or the agreement so that the amount of child support reflects the payor's current income. The payor would typically make the application if their 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 in the court order or agreement that requires both parties to regularly exchange income information in an agreement or order for child support, usually on an annual basis, so that child support can be adjusted from time to time without having to go to court. | ||
Another important presumption in the Guidelines is that the amount of support payable is set according to the number of children to which each particular support order relates. If a payor has two children from one relationship and three from another, the first order will be based on the Guidelines amount for two children and the second will be based on the amount for three children. The payor's obligation is not based on the Guidelines amount for the total number of five children. | Another important presumption in the Guidelines is that the amount of support payable is set according to the number of children to which each particular support order relates. If a payor has two children from one relationship and three from another, the first order will be based on the Guidelines amount for two children and the second will be based on the amount for three children. The payor's obligation is not based on the Guidelines amount for the total number of five children. | ||
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#the last three years' of tax returns (what's required is the complete income tax and benefit return, not tax return "summaries" or "informations"), | #the last three years' of tax returns (what's required is the complete income tax and benefit return, not tax return "summaries" or "informations"), | ||
#all notices of assessment and reassessment received for the last three tax years, | #all notices of assessment and reassessment received for the last three tax years, | ||
#the party's most recent paystub, showing | #the party's most recent paystub, showing their earnings to date, or if the party isn't working, then their 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. | #business records like financial statements and corporate income tax returns, if the party has a company. | ||
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===Government benefits=== | ===Government benefits=== | ||
Payments from WCB, Employment Insurance, CPP, Old Age Security, and social assistance all count as income under the Guidelines. If a party is receiving these payments as a temporary substitute for employment income, the party's income may be assessed at | Payments from WCB, Employment Insurance, CPP, Old Age Security, and social assistance all count as income under the Guidelines. If a party is receiving these payments as a temporary substitute for employment income, the party's income may be assessed at their usual income. A temporary period on social assistance, for example, won't entitle a payor to have their income assessed at that unusually low level into the future. | ||
Note that Canada Child Tax Benefits are not considered income for basic child support purposes, but may be taken into account when determining the sharing of special and extraordinary expenses. | Note that Canada Child Tax Benefits are not considered income for basic child support purposes, but may be taken into account when determining the sharing of special and extraordinary expenses. | ||
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===Fluctuating income=== | ===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 | 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 their income over the last three years. | ||
===Unexpected losses and gains=== | ===Unexpected losses and gains=== | ||
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==Imputing income== | ==Imputing income== | ||
To ''impute'' income means to attribute income to a payor above that which the payor claims | To ''impute'' income means to attribute income to a payor above that which the payor claims they earn, 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 is intentionally unemployed or under-employed (i.e. not working to their full skills and capacity), | #the payor is intentionally unemployed or under-employed (i.e. not working to their full skills and capacity), | ||
#the payor has quit or been fired from | #the payor has quit or been fired from their job, | ||
#the payor moves from full- to part-time work without a very good reason, | #the payor moves from full- to part-time work without a very good reason, | ||
#the payor is self-employed and either receives unpaid benefits from | #the payor is self-employed and either receives unpaid benefits from their 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, or | #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, | ||
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<blockquote><blockquote><tt>(g) the spouse unreasonably deducts expenses from income;</tt></blockquote></blockquote> | <blockquote><blockquote><tt>(g) the spouse unreasonably deducts expenses from income;</tt></blockquote></blockquote> | ||
In other words, the court may decide that a payor has a different income than that which the payor says | In other words, the court may decide that a payor has a different income than that which the payor says they have 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 | #the payor has taken lower-paying work than they used to have, or is capable of holding, in order to minimize the amount of child support payable, and | ||
#the payor has tried to reduce | #the payor has tried to reduce their 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. 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. If a party's underemployment or unemployment is caused by child care responsibilities, the court will not usually impute income. | ||
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#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 | #the payor's efforts to upgrade their education and work qualifications, | ||
#the nature and quality of the payor's attempts to obtain employment, and | #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. | ||
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<blockquote>"1. There is a duty to seek employment in a case where a parent is healthy and there is no reason why the parent cannot work. It is 'no answer for a person liable to support a child to say that he is unemployed and does not intend to seek work or that his potential to earn income is an irrelevant factor' ...</blockquote> | <blockquote>"1. There is a duty to seek employment in a case where a parent is healthy and there is no reason why the parent cannot work. It is 'no answer for a person liable to support a child to say that he is unemployed and does not intend to seek work or that his potential to earn income is an irrelevant factor' ...</blockquote> | ||
<blockquote>"2. When imputing income on the basis of intentional underemployment, a court must consider what is reasonable under the circumstances. The age, education, experience, skills and health of the parent are factors to be considered in addition to such matters as the availability of work, freedom to relocate and other obligations.</blockquote> | <blockquote><tt>"2. When imputing income on the basis of intentional underemployment, a court must consider what is reasonable under the circumstances. The age, education, experience, skills and health of the parent are factors to be considered in addition to such matters as the availability of work, freedom to relocate and other obligations.</tt></blockquote> | ||
<blockquote>"3. A parent's limited work experience and job skills do not justify a failure to pursue employment that does not require significant skills, or employment in which the necessary skills can be earned on the job. ... [C]ourts have never sanctioned the refusal of a parent to take reasonable steps to support his or her children simply because the parent cannot obtain interesting or highly paid employment.</blockquote> | <blockquote><tt>"3. A parent's limited work experience and job skills do not justify a failure to pursue employment that does not require significant skills, or employment in which the necessary skills can be earned on the job. ... [C]ourts have never sanctioned the refusal of a parent to take reasonable steps to support his or her children simply because the parent cannot obtain interesting or highly paid employment.</tt></blockquote> | ||
<blockquote>"4. Persistence in [poorly paid] employment may entitle the court to impute income.</blockquote> | <blockquote><tt>"4. Persistence in [poorly paid] employment may entitle the court to impute income.</tt></blockquote> | ||
<blockquote>"5. A parent cannot be excused from his or her child support obligations [to pursue] unrealistic or unproductive career aspirations.</blockquote> | <blockquote><tt>"5. A parent cannot be excused from his or her child support obligations [to pursue] unrealistic or unproductive career aspirations.</tt></blockquote> | ||
<blockquote>"6. As a general rule, a parent cannot avoid child support obligations by a self-induced reduction of income."</blockquote> | <blockquote><tt>"6. As a general rule, a parent cannot avoid child support obligations by a self-induced reduction of income."</tt></blockquote> | ||
==="Grossing up" income=== | ==="Grossing up" income=== | ||
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The grossing up process essentially involves figuring out the amount of money the payor would have to earn to have the same after-tax income at the tax rates normally applicable to residents of British Columbia. This will result in income being imputed to the payor for the purposes of calculating child support, with a consequent increase in the amount of child support that will be payable. | The grossing up process essentially involves figuring out the amount of money the payor would have to earn to have the same after-tax income at the tax rates normally applicable to residents of British Columbia. This will result in income being imputed to the payor for the purposes of calculating child support, with a consequent increase in the amount of child support that will be payable. | ||
The math behind grossing up someone's income is a bit complex. Essentially, the idea is to figure out the amount of income the person would have to earn before taxes to receive the amount | The math behind grossing up someone's income is a bit complex. Essentially, the idea is to figure out the amount of income the person would have to earn before taxes to receive the amount they earn net of taxes. Think of it like this: | ||
<blockquote>Say Mr. A earns $100,000 per year. As a resident of British Columbia, Mr. A pays income tax at, for example, 40%. This means that Mr. A's income, net of taxes, is $60,000 per year.</blockquote> | <blockquote>Say Mr. A earns $100,000 per year. As a resident of British Columbia, Mr. A pays income tax at, for example, 40%. This means that Mr. A's income, net of taxes, is $60,000 per year.</blockquote> | ||
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==Child support and parents' new partners== | ==Child support and parents' new partners== | ||
Parents and guardians usually move on with their lives after the relationship that produced their children has ended. They will meet new people and enter into new romantic relationships. Parents and their new partners are often concerned about how their relationship will impact on the payor parent's obligation to pay child support. The parent might be concerned to know whether the new partner's income will be added to | Parents and guardians usually move on with their lives after the relationship that produced their children has ended. They will meet new people and enter into new romantic relationships. Parents and their new partners are often concerned about how their relationship will impact on the payor parent's obligation to pay child support. The parent might be concerned to know whether the new partner's income will be added to their income in calculating child support. The new partner will want to know whether they are now on the hook for support and must contribute to the parent's payments or towards the parent's children. | ||
===Basic child support payments=== | ===Basic child support payments=== | ||
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Section 10 of the Child Support Guidelines allows parties to argue that the base amount of support set out in the Guidelines tables is too low or too high and would cause ''undue hardship'' if the table amount was paid. Payors will <span class="noglossary">claim</span> that the base amount is too high, while recipients will argue that it is too low. This chapter discusses exceptions to the Guidelines more thoroughly in the section, [[Exceptions to the Child Support Guidelines]]. | Section 10 of the Child Support Guidelines allows parties to argue that the base amount of support set out in the Guidelines tables is too low or too high and would cause ''undue hardship'' if the table amount was paid. Payors will <span class="noglossary">claim</span> that the base amount is too high, while recipients will argue that it is too low. This chapter discusses exceptions to the Guidelines more thoroughly in the section, [[Exceptions to the Child Support Guidelines]]. | ||
If undue hardship is claimed, the court will look at the standard of living of each parent's ''household'', rather than the standard of living of each parent alone. This means that the court, in deciding whether there is undue hardship, will look at the total expenses and total income of each parent's household, including the income of each parent's new partner. This will not cause the new partner to be liable to pay support; it just means that | If undue hardship is claimed, the court will look at the standard of living of each parent's ''household'', rather than the standard of living of each parent alone. This means that the court, in deciding whether there is undue hardship, will look at the total expenses and total income of each parent's household, including the income of each parent's new partner. This will not cause the new partner to be liable to pay support; it just means that their income will be taken into consideration to see whether the usual table amount of support payable is unduly high or low. | ||
===Incomes in excess of $150,000=== | ===Incomes in excess of $150,000=== | ||
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Section 7 of the Guidelines allows for sharing of the children's special and/or extraordinary expenses between the parents, as discussed above. In figuring out how much a parent should have to contribute to these expenses, the court is required to take into <span class="noglossary">account</span>, among other things "the necessity and reasonableness of the expense in relation to the means of the spouses and those of the child." | Section 7 of the Guidelines allows for sharing of the children's special and/or extraordinary expenses between the parents, as discussed above. In figuring out how much a parent should have to contribute to these expenses, the court is required to take into <span class="noglossary">account</span>, among other things "the necessity and reasonableness of the expense in relation to the means of the spouses and those of the child." | ||
A parent's new partner's income can be taken into consideration in assessing the "means of the spouses," which is exactly what the court did in the 2000 Supreme Court case of ''[http://canlii.ca/t/1fm6b Baum v. Baum]'', 2000 BCSC 1835. In that decision, the court held that ''means of the spouses'' should be interpreted broadly as including all of the means available to the paying parent, including the financial contribution of | A parent's new partner's income can be taken into consideration in assessing the "means of the spouses," which is exactly what the court did in the 2000 Supreme Court case of ''[http://canlii.ca/t/1fm6b Baum v. Baum]'', 2000 BCSC 1835. In that decision, the court held that ''means of the spouses'' should be interpreted broadly as including all of the means available to the paying parent, including the financial contribution of their new partner. | ||
Again, the new partner will not be responsible to pay child support or a share of the children's special expenses as a result; only the payor's obligation will be affected by the new partner's income. | Again, the new partner will not be responsible to pay child support or a share of the children's special expenses as a result; only the payor's obligation will be affected by the new partner's income. | ||
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A number of readers have asked whether they will have any responsibility to make child support payments if their partner, who is a parent or guardian under an obligation to pay child support, dies. The simple answer to that question is no, they will have no responsibility. The fact that they are in a relationship with a paying parent doesn't necessarily mean that they will have a duty to keep paying support if that parent dies. | A number of readers have asked whether they will have any responsibility to make child support payments if their partner, who is a parent or guardian under an obligation to pay child support, dies. The simple answer to that question is no, they will have no responsibility. The fact that they are in a relationship with a paying parent doesn't necessarily mean that they will have a duty to keep paying support if that parent dies. | ||
While that is a good general rule, and one you can probably rely on, it is possible that a claim could be made against the new partner as a ''stepparent'' of the child under the ''[[Family Law Act]]''. The act says that all parents, guardians, and stepparents are required to support their children, but s. 147 says that stepparents who are obliged to pay child support must have contributed to the support of the child for at least of one year. In other words, a new partner who marries a paying parent may have an obligation if | While that is a good general rule, and one you can probably rely on, it is possible that a claim could be made against the new partner as a ''stepparent'' of the child under the ''[[Family Law Act]]''. The act says that all parents, guardians, and stepparents are required to support their children, but s. 147 says that stepparents who are obliged to pay child support must have contributed to the support of the child for at least of one year. In other words, a new partner who marries a paying parent may have an obligation if they have contributed to the support of the child. Again, while this is technically possible, orders against new partners following the death of the paying parent are extremely rare. | ||
The deceased parent’s estate may, however, be liable for the children and a claim could be made against the estate under the ''Wills Estates and Succession Act'' but this is beyond the scope of this service. | The deceased parent’s estate may, however, be liable for the children and a claim could be made against the estate under the ''Wills Estates and Succession Act'' but this is beyond the scope of this service. | ||
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<blockquote><tt>2. The Claimant shall provide to the Respondent a copy of her tax return on the first day of May 2014 and continuing on the first day of May for each and every year thereafter until such time as the children are no longer "children" as defined by the ''Family Law Act'', and the Claimant shall provide to the Respondent a copy of each Canada Revenue Agency Notice of Assessment or Notice of Reassessment within two weeks of her receipt of the same, and adjusting child support accordingly, and continuing until such time as the children are no longer "children." </tt></blockquote> | <blockquote><tt>2. The Claimant shall provide to the Respondent a copy of her tax return on the first day of May 2014 and continuing on the first day of May for each and every year thereafter until such time as the children are no longer "children" as defined by the ''Family Law Act'', and the Claimant shall provide to the Respondent a copy of each Canada Revenue Agency Notice of Assessment or Notice of Reassessment within two weeks of her receipt of the same, and adjusting child support accordingly, and continuing until such time as the children are no longer "children." </tt></blockquote> | ||
The point of the last clause of each of these sample orders is to require the payor to annually provide evidence of | The point of the last clause of each of these sample orders is to require the payor to annually provide evidence of their income to the recipient so that both parties can decide whether an increase or a decrease in the amount payable is appropriate. | ||
If the Order is to include special and extraordinary expenses, the Order will usually include the receiving spouse’s income (including spousal support if that is being paid) and the percentage contribution of each parent to special expenses and will also require both parents to exchange income information each year. Disclosure of income by both parents is also required in shared and split custody cases as well. | If the Order is to include special and extraordinary expenses, the Order will usually include the receiving spouse’s income (including spousal support if that is being paid) and the percentage contribution of each parent to special expenses and will also require both parents to exchange income information each year. Disclosure of income by both parents is also required in shared and split custody cases as well. | ||