The Guidelines are a set of tables and a set of rules that prescribe the amount of child support a non-custodial parent should pay to the custodial parent. Tables set forth a specific amount of support depending on the income of the non-custodial parent and the number of children. Rules set out when and how the amount in the table should be modified to address special situations. The Guidelines also dictate the determination of the payor’s income, the variation of support orders prior to the Guidelines and the requirements for the parties to provide information about their incomes and expenses.
The Purposes of Guidelines
The four objectives of the Guidelines are:-
(1) to establish a fair amount of support for the children of divorced parents
(2) to reduce conflict by having the amount of support more objective
(3) to improve the legal process by providing guidance in setting the amount of child support
(4) to ensure similar treatment for similar situations.
Basis of the Guideline Tables
The tables are based upon the average costs of raising children. As those costs vary with income, the amount of support varies with income of the non-custodial spouse. The income of the custodial parent is not considered in the table. The reasoning is that the custodial parent will spend a similar share of his or her income to meet the costs of raising the children. The tables are based upon a tax system where the support payments are not tax-deductible to the payor or tax-includable for the recipient. This was not the law prior to the Guidelines. The Income Tax Act was also changed to allow for the new tax treatment of child support payments.
The Exceptions in the Guidelines
Certain situations allow the court to deviate from the amount set out in the tables. Those situations are specifically defined in the Guidelines or directly in the Divorce Act. The Guidelines set forth what should be considered in determining the new amount though not always by a specific arithmetic formula. The following are brief explanations of the exceptions.
- Previous Order or Agreement Benefiting a Child
The court may order an amount different from the table if it finds it would be fair to do so because in a previous order or agreement there was a property transfer or a financial responsibility that directly benefited the child.
- Incomes over $150,000
The court may extrapolate from the table or it may use the previous method of considering the income and needs of both parties and the children. Generally the courts do not divert from the table.
- Children over the Age of Majority
The court may use the tables. If, however, it believes the table amount is inappropriate it may use the previous method of considering the income and needs of the parents and the child over the age of majority (which in Ontario is 18). The courts have not followed a consistent approach to this issue.
- Special or Extraordinary Expenses
The court may order a parent to pay for certain expenses beyond the amount set out in the table. Those expenses are
(a) child care expenses;
(b) extraordinary medical expenses;
(c) post-secondary education expenses; and
(d) extraordinary extracurricular activities.
These expenses are to be shared in proportion to the parties’ respective means. These expenses are figured out after tax and subsidies are applied. The courts have not been consistent as to what are defined as extraordinary expenses.
- Undue Hardship
The court may deviate from the table amount of support if it finds there is undue hardship because of four defined circumstances: –
(1) one spouse has assumed a proportionally high amount of debt from the marriage;
(2) access expenses are unusually high;
(3) one spouse must support another person under a court order or separation agreement; and
(4) one spouse has a legal duty to support another child (a second marriage situation).
In determining the new amount of support, the court must ensure that the household standard of living of the spouse pleading undue hardship is not greater than the household of the other spouse. There is a prescribed test in the Guidelines to decide the standards of living. A court must give recorded reasons if it deviates from the table because of undue hardship.
- Split Custody
The support will be the difference between the amount each spouse would pay based upon the table and the special or extraordinary expense determination.
- Shared Custody
The court may deviate from the tables after considering the appropriate amounts set out in the tables, the extra expenses of a shared custody arrangement and the means and expenses of all the parties. The courts have not been consistent in dealing with shared custody.
Determination of Income
The Guidelines set out specific rules to determine the income of the payor spouse. The rules start with income that would be reported on an income tax return. Income then may be adjusted under certain circumstances to reflect fairly what monies are available for the payment of support. Those circumstances include the situation where the payor spouse is a shareholder, officer or director of a company, or where the income is increasing or decreasing for three years. Courts may also impute income for many stated reasons. Some of those cases include intentional unemployment or under employment, where assets are not being properly utilized, where there has been a failure to reveal income, or where there is a different tax rate than normal.
Variation of Support Orders and Agreements
These Guidelines may apply to all agreements and orders retroactively to the date that the Guidelines become law. An application to vary should be made if an outstanding agreement or court order amount of child support is different from what the Guidelines will state.
Obtaining Financial Information
The Guidelines require the recipient spouse of an application to file specified financial documentation. Such documentation includes tax returns, notices of assessments and reassessments for a three year period, a statement of earnings from an employer, financial statements where the spouse is a self-employed business or controls a corporation and confirmation of income when a spouse is a partner of a partnership. An applicant spouse must also file that information if his or her income is an issue under the Guidelines such as in the issues of special expenses, undue hardship and incomes over $150,000.
Failure to comply with the disclosure requirements will result in an adverse inference against that party or an order to comply. Failure to comply with an order to produce documents may result in an order to strike that party’s claim, a contempt order, an adverse inference at trial or an order for costs.
The introduction of the Child Support Guidelines in 1997 was a major change to Family Law in Canada. They resulted in fairer, more objective and more consistent support agreements and orders. They have reduced the emotional and financial costs of spouses separating. Unfortunately, in some areas such as joint custody, extraordinary expenses and children over 18 the law is not as and clear as I believe it should be. Those areas are still often litigated.