Base Child Support
In Canada child support is comprised of more than one component. The courts will address the issue of base support first. This is also known as section 3 support (from its origin section in the Federal and Provincial child support guidelines see https://laws.justice.gc.ca/eng/regulations/SOR-97-175/page-1.html), or the “table amount’, since it is derived from a set of provincial tables. https://laws-lois.justice.gc.ca/eng/regulations/SOR-97-175/page-14.html#docCont.
Base child support is generally the least complex amount to compute since it can be calculated by referencing the appropriate provincial table. The amount is actually determined from a formula and the tables are the banded results of applying that formula. You can also use the Child Support lookup tool provided on the Justice Canada Website. https://www.justice.gc.ca/eng/fl-df/child-enfant/cst-orpe.html. You will note the tables will only provide guidance for incomes up to $150,000, whereas the look-up tool will apply the formula to any income level.
The formula is based on only three inputs, the resident province of the payor, the number of dependent children, and the income of the payor.
Even though the formula is simple, this issue continues to be highly contentious, and the number of cases brought every year to order this amount is enormous. There are different reasons for this. Even though separated couples can easily access the calculation and can easily agree on the resulting amount, a court order is usually sought (many times on consent), in order to make the agreement official. Also, a court order can be sent for registration with the government’s Maintenance Enforcement Program (MEP) LINK in the event the agreement is broken or sporadically complied with. MEP is the only body with the authority to enforce payment. Private collection agencies cannot collect child support.
Again, though the tables are readily available, disagreement can arise over either of the three inputs. The correct provincial table is not generally litigated, though at times a payor parent may move across a provincial border and then a change is required. The number of children is generally not in dispute, but sometimes the status of step-children may need clarification, and at times the issue of parentage may need to be determined. Generally, someone who acted as a parent (i.e. stood in loco parentis) to a child or is found to be the biological parent, will be responsible for support. The determination of the payor’s income (aka Guideline income) is usually the persons line 150 on his Canadian tax return. But, the court will set the amount based on the most recent information available (see section ), which may be someone’s last three paystubs, a letter from an employer, on an extrapolated calculation of the current years total income, just to mention a few. In the case of a self-employed person, or a shareholder in a corporation, someone who works outside of Canada, or other non-traditional cases, some alternative methods of calculation (including pure imputation) may be employed. See sections 16-20.
Litigation is also caused by misinformation. I have encountered a number of persons who believe that shared parenting will negate the obligation to pay support. This is not true. It may cause a reduction, but the obligation will not negate. Shared parenting is the term used to describe the situation when separated parents each parent the children for roughly equal amounts of time. A special section of the Guidelines states that any person who has custody of or access to a child for more than 40% of the time is entitled to receive child support for that child. So, if both parents have the child for 50% of the time, they are both entitled to receive child support from the other. This is handled by calculating the amount owed to either parent and the offset amount is then awarded payable. The result is that the parent with the higher income will have to pay some support to the other parent based on the difference between their incomes.
Another common misconception I see is the assumption that base child support is calculated using a parents take-home income. This is false. Line 150 is your gross income before taxes or other payroll deductions are removed. And it includes all income including overtime, employee contributions to RRSP’s, etc. Some employee allowances such as travel allowances, truck allowances, etc., may not be included, but only to the extent that they reimburse the employee for actual out-of-pocket expenses of the employee. There are defences to the application for base child support, but they are few and far between. They usually result in small discretionary reductions only. The only absolute bar to an application is that the child is not yours (paternity testing required), or to bring successful evidence to prove you did not stand in place of a parent to the child. If you were married, both of these are presumed in law.
There are adjustments allowed if your income is over 150,000, if you took on a large proportion of the matrimonial debt upon separation, if you are making indirect support (the mortgage, maybe), if you are paying all of the costs of travel required to access the children ( but not always), but keep in mind each of these are at the discretion of the judge.
There is one claim referred to “undue hardship” which will be successful if the payor can successfully prove that his household income is actually less than that of the recipient, and that the payment of support would cause a hardship upon the payor. This calculation is found in the guidelines, and a worksheet is available to assist persons through the calculation. https://www.justice.gc.ca/eng/rp-pr/fl-lf/child-enfant/guide/step8-etap8.html.
Persons often ask: “what if my income changes? Or What happens if I get laid off?” Unfortunately, in Alberta this has become a common scenario. Generally, if you have an existing court order, and you cannot get your ex’s agreement to reduce your support, a court application to vary the order will be required. The test for reducing child support based on income changes is whether or not that change is temporary. If you are laid off, you will have to show the court that this is not a temporary situation otherwise you will not be successful.
If your order is being enforced by MEP and you are an employee, your support can be automatically adjusted each year by MEP if your court order says you agree to have the amount subject to the MEP’s recalculation program. This program is useful for smaller, or seasonal adjustments to your income. But the recalculation program is an annual recalculation. Situations that involve catastrophic changes should be handled by court application.
People often ask if court orders must be registered with MEP. The answer is no, but either party has the right to choose to do so, and if they do there is no defense to the registration.
Some of the above issues will be more fully explored in further blog postings.