Child Support Generally
Child support is the obligation of every parent during cohabitation and on separation for so long as their offspring is a “child of the marriage”. Child support in is governed by Child Support Guidelines, provincial or federal. For most cases, the Guidelines operate as a tariff, respecting which the court has very limited discretion.
Child Support Guidelines
Child support, unlike spousal support which is almost completely discretionary, is now governed by Child Support Guidelines, the application of which is mandatory in child support cases.
Where the parties do not agree on child support, the court will set it. On divorce, the court has a duty to withhold the divorce unless “reasonable” child support arrangements are in place.
Reasonable child support is deemed to be the amount set out pursuant to the Regulations called Child Support Guidelines which have been made under the Divorce Act (Canada) and The Family Maintenance Act (Manitoba).
Federal Child Support Guidelines
The Federal Child Support Guidelines apply to divorce cases in each province, except those provinces, including Manitoba, which have passed their own Guidelines.
Manitoba Child Support Guidelines
The Manitoba Child Support Guidelines apply to all children in the province, with minor exception, whether their parents were married or not, or whether they are divorcing or only separating.
The Child Support Tables, which set out the amounts payable depending on which province the one paying support lives, are the same, whether under federal divorce legislation or Manitoba's legislation.
See the Fishman Beley Primer on:
The Relationship between Custody and Child Support
Sole Custody or Primary Care:
A sole custody or primary care situation, for Guideline purposes, is one in which the children are in the care of one parent more than 60% of the time throughout the year.
In a sole custody or primary care situation, the non-custodial parent will pay the amount dictated by the tables based on his or her income and the number of children.
Once income is determined, the amount of child support payable will be determined by looking at the provincial table. Look down the left hand column to locate the income figure and then across the row to the column for the number of children.
Where dad has primary custody of the two children, and mom’s income is $75,000, she will pay him $1,355.00 monthly. His income in this example is entirely irrelevant.
A split custody scenario is one in which each parent has custody of one or more children, more than 60% of the time throughout the year.
In a split custody case, one child living primarily with dad and one with mom, we look up the amount payable by each parent for the one child in the other parent’s custody and subtract the lower figure from the higher one.
Where dad’s income is, say, $50,000, he would pay support of $412 for the child living with mom, and mom, whose income is $75,000 would pay him $633 for the child in his care. Typically, in this situation, the higher paying parent would simply pay the “offset” amount to the other, $633 - $412 = $119.
If one parent had two children and the other parent had one child then the look-up would work the same way, except that the amount payable for two children would be used by the parent who has custody of one and vice versa.
Joint Custody – Shared Care and Control:
Where the parties share care and control of the children between 40% and 60% of the time over the year, they are said to have “shared custody” and in those situations the amount payable might be:
There are often battles between parents counting the hours to get into that magic zone of “shared custody”, too often for financial reasons. The assessment of time with each parent most typically involves the counting of overnights. For example, a typical formulation of every second weekend (Friday and Saturday overnight with a return on Sunday evening) and one overnight during the week works out to 35.71% whereas if you add one more overnight, the percentage jumps to 42.85%.
For the court to apply an amount different than the basic table or the offset amount requires that the parties lead evidence of the increased costs of the shared custody arrangement, an exercise that few litigants undertake. This is known colloquially as a Contino analysis, named for the famous case.
Most shared custody support cases, particularly where there isn’t a significant disparity in the parents’ incomes, are determined on the “split custody” or offset formula.
How to Use the Child Support Guidelines
Child support is usually a two-part obligation. The first is for the payment of Basic Table support, which is intended to cover the general day-to-day or basic costs of raising a child, and for special or extraordinary expenses, known as Section 7 Expenses, which cover expenses that are unusual and not required in every situation, such as health expenses, daycare and extraordinary costs for activities.
The application of the Guidelines involves the following steps:
a. Does the expense qualify under the statute as a “special or extraordinary expense?”
b. Determine the parties’ respective incomes.
c. Determine if the sharing of Section 7 Expenses should be proportional to the parties’ incomes, less the threshold amount, or in some other manner.
d. If the child is an adult, consider whether and how much the child should contribute to her expenses?
Special and Extraordinary Expenses under the Guidelines
What is a Section 7 Expense?
In addition to the basic table amount, a parent may be required to contribute to the net cost of special or extraordinary expenses as those are defined in Section 7 of the Guidelines.
These add-ons must fall into specific categories, as set out in the legislation, for:
These "add-ons" must be reasonable, having regard to the means of the parents and the child, necessary in relation to the child’s best interests, and bear a relationship to the family’s spending pattern prior to the separation. In Manitoba, only the custodial parent can apply for add-ons.
Section 7 expenses are treated somewhat differently in Manitoba compared to the Federal Guidelines and other provinces, so be extremely careful in reviewing case law from other provinces.
When an expense is determined to qualify as a Section 7 Expense, the Guidelines suggest, as a “guiding principle”, that the expense should be shared proportionately as to incomes after deduction of the “threshold amount” (the amount below which no child support is payable) of approximately $10,000.00.
The payor earns $75,000 and the payee earns $50,000 annually. They would, therefore, share the eligible Section
7 Expenses based on the following calculation:
Payor’s income, less the threshold amount, is: $75,000 - $10,000 = $65,000
Payee’s income, less the threshold amount, is: $50,000 - $10,000 = $40,000
Their combined incomes are $105,000 and, therefore, their respective proportional share would be:
Payor’s proportion is: $65,000 / $105,000, or 61.90%
Payee’s proportion is: $40,000 / $105,000, or 38.10%.
When making the calculation, however, most laypeople will forget about the threshold amount and round the calculation off at $75,000 / $125,000 or 60% and 40%. Often, the parties, or the court, may simply assess the cost sharing at equality.
It is important to remember that the costs sharing is of the net cost, for example, tax deductions or credits will reduce the actual cost of daycare or some sporting costs and insurance may reduce the cost of health expenses. The added cost of the insurance, individual versus family plan, may be added back on as an expense.
Child Support Calculators
The internet is alive with child support calculators, and the federal government maintains a highly informative selection of materials on child support. See it here.
The determination of income is a critical component of the calculation or look-up. In most cases, where the parties earn their incomes from salaried jobs, their incomes for Guideline purposes may simply be exactly the same as the income shown on Line 150 of their most recent income tax return. There may be adjustments to that amount, however, the most common one being the deduction of union dues to determine the party’s income for Guideline purposes.
Exceptions to the Guidelines
The Guidelines, which are really for the most part a tariff, apply strictly in all cases except the following:
While in these exceptional situations, the court may have some discretion to alter or add on to the table amount, the result, typically, is that the court will stick with the table amount for basic support and order the payment of Section 7 Expenses proportionately.
In the Place of a Parent – in Loco Parentis
A person found to be standing in the place of a parent, or to use the archaic phrase standing in loco parentis may be required to provide child support to that child, notwithstanding that there may be a biological parent who has a prior obligation to support that child.
The determination that a person stands in the place of a parent is seen as a declaration of status and is therefore not easily changed. Unfortunately, what often happens is that the non-biological parent who has cared for the child and supported the child, historically, will find himself paying support while the emotional bonds and contact deteriorate rapidly.
The court may actually require both the biological and in loco parentis "parents" to pay support to the custodial parent, the total amount of which may exceed what either of the payors might have had to pay individually. The Guidelines, in S. 5, provides that the amount to be awarded is "such amount as the court considers appropriate, having regard to these Guidelines and the child’s parents’ legal duty to support the child.”
Child of the Marriage (Over 18 Years Old)
Where the child is over the age of 18 and still eligible for support as a “child of the marriage”, the court may order the regular table amount or, if the court considers that amount inappropriate, the court may order a different amount, more or less, "having regard to the condition, means, needs and other circumstances of the child and the financial ability of each parent to contribute to the support of the child."
Typically, unless there is a huge disparity between the parents’ incomes or if the child has significant means, the amount awarded will follow the tables.
“Child of the marriage” is a term of art that is defined in the Divorce Act. It allows the court to order support for adult children who continue to be dependent on their parents. It thus can extend the usual parental responsibilities, from moral or emotionally based ones (for example, some parent’s willingness to assist in the financing of a post-secondary education of their children) when the family is intact, into a legal ones where the parents have separated.
This provision may also find application in the cases of disabled or needy children, although at some point in those cases, the burden will likely fall to the state.
Typically, the courts have held that the obligation for separated parents to support their children extends to the completion of a first post-secondary degree or training program, beyond the age of 18. This obligation can be fixed to any particular age, say 21 or 22, or perhaps to the diligent completion of first degree.
The decision to require the support of adult children may include other factors, such as the parent’s own levels of education, evidence of the family’s pre-separation priorities and stated goals for their children, or the children’s talent and commitment. The Manitoba Court of Appeal, in Newman v. Thompson, required a parent to continue to support his child, who was then 23, living primarily away from his mother with whom he had lived in his minority, studying in the United States, in the completion of his PhD program. Len Fishman argued the case for the "custodial" parent, which confirmed the principle that the court is not bound by any fixed rule in this regard, but that the determination of an obligation to continue support depends on the circumstances of the child, the means of the parents, and the agreements or expectations that arose in the family.
In Rebenchuk, which Terry Beley argued in the Court of Appeal, the court clarified a three part test for the support of an adult child, namely, to first determine if the adult child met the test of being a “child of the marriage”, that is, dependent on a parent, should the Guidelines amount apply, and what, if anything, the child can contribute to the cost.
Payor's Income over $150,000
Where the payor's income exceeds $150,000 annually, the court has the discretion to order the amount which would be provided by the tables or, if it considers the amount to be inappropriate, it will order the table amount up to income of $150,000, or more depending on the court's view of the appropriateness of its award "having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each parent to contribute to the support of the children".
In the landmark case of Frances v. Baker, the Supreme Court of Canada indicated quite strongly that most of the time the court will order the table amount, notwithstanding that the payment might be excessive in relation to the child's actual needs, that is, that effectively part of the amount paid might be considered a contribution to spousal support, even where there is no spousal support obligation.
The court may award an amount different from the table amount, higher or lower, upon a finding of "undue hardship". Undue hardship is defined in the Guidelines. It can affect the payor, the recipient, or any child of either.
The court, to find undue hardship, must determine that the payor's household's standard of living will be less than the standard of living in the household of the parent receiving the support, and must set out is reasons in writing including, where applicable, its assessment of when the hardship will be relieved.
Hardship may be caused, amongst other possibilities, the list not being exclusive, by:
A complex test, although not specifically required to be followed by the court, is set out in Schedule II to the Guideline Regulation. While a great number of cases begin with a claim for undue hardship, the reality is that very few are actually pursued and the vast majority of those pursued are dismissed by the courts.
Because the Guidelines are income-driven, they contain extensive provision for financial disclosure. A party can demand complete financial disclosure annually, including copies of tax returns and assessments for the preceding three years (if not previously supplied), a statement of income for the year-to-date, and other information if the payor is in business or a partnership.
Most court orders for child support will usually contain a provision for ongoing financial disclosure such as the annual exchange of income tax returns and notices of assessment.
Failure to provide disclosure can lead to serious consequences, fines or payment of the other party's legal costs. A recipient of child support can demand updated disclosure annually and many court orders for support include annual exchange of tax returns and corporate financial statements
Retroactive Child Support
The Supreme Court of Canada in a ruling dealing with 4 cases out of Alberta has stipulated that child support is the "right of the child" and that retroactive child support is appropriate where the payor's income has increased. See D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37.
The theory behind the argument for retroactive child support follows the notion that the payor is uniquely aware of his or her own income and, therefore, should have paid the amount that would be ordered on the Tables.
Where there was an explicit obligation to disclose financial information, in a court order for example, that the payor flouted, this “blameworthy conduct” might militate a court going back a number of years, but in the typical case three years is the limit.
Variation of Child Support Orders
When incomes change significantly or child custody arrangements change, such as when a child is no longer eligible to be supported, or where some other material change of circumstances for the parties and/or the children occurs, the courts have the power to alter the child support order. The applicant must prove a “material change of circumstances”.
Although the parties can adjust child support on their own, if the Maintenance Enforcement Program (MEP) is enforcing the order, it is imperative that the parties vary their child support order in a timely way to enact changes in the amount which will be enforced as MEP will not make a change except as dictated by a court order, although a recipient is always free to “opt-out” of the program.
The Manitoba Department of Justice has created a very helpful Guide to Changing Child Support Orders in Manitoba.
Recalculation of Child Support Orders
The original enactment of the Federal Child Support Guidelines envisioned the automatic recalculation of child support orders based on annual reviews of the parties' incomes. The idea was that the parties would attend upon a court-appointed officer with their tax returns in hand and have their orders adjusted appropriately. This has not yet happened on the federal level, but a few of the provinces, including Manitoba, have created their own recalculation services.
Manitoba's Recalculation Officer deals with cases in which income is determinable readily and the amount payable not subject to discretions. As such, where a payor is self-employed or there is a shared custody arrangement, the service will not generally be involved.
Provisions for recalculation must be explicitly contained in the support order and will require the parties to provide their financial disclosure, changes in employment and residence to the Recalculation Service which will, at the appointed time, gather the information and provide a recalculation order. Such an order, unless it is opposed by either party, becomes an order of the court and enforceable as such.
Taxation and Child Support
The taxation or deduction of spousal support and child support are different.
One of the distinguishing features of child support is that the amounts that are paid or received are not subject to the taxation system in Canada, as spousal support is. Monies paid for child support are from tax-paid dollars of the payor and the payee, or recipient of the funds, pays no tax on it.
If a court order provides for both child and spousal support, and there are arrears, CRA will credit firstly the child support payments.
Some provisions of the income tax regime in Canada will apply to the separated parents of children, such as the Child Tax Benefits, the Alternative Eligible Dependent (AED) deduction, and provincial credits for fitness and the like. The rules are complex and can easily be a trap for the unwary. See the Fishman Beley Family Law Primer section on Taxation of Support for greater detail.