Child support in Canada is paid based on the Child Support Guidelines. The Guidelines are law and parent for the most part must abide by them. Parents have very little negotiation room when it comes to child support.
What is the Table Amount?
The Table outlines how much monthly child support is owed based on the number of children and the parent’s income.
Where to Find Child Support Calculator?
The Federal Government Department of Justice has a look-up that will calculate the Table amount of support. The Table amount is often not the final child support amount to be paid. There are also shared parenting arrangements to be considered and section 7 expenses.
What is Your Annual Income?
For many people determining annual income is as simple as going to the tax return and applying the Line 150 amount. The parents exchange 3 years of tax returns and notices of assessment, along with any documents they have to support current earnings, such as pay stubs. If you receive a bonus, that amount will also be considered income.
What is the Annual Income for Self Employed Parents?
If you own your own business or are self employed, the Line 150 amount may not be your income for support purposes. If you include varies year to years, the Court applies an average over the last 3 years as it would be unfair to pay support based on your best year if there are legitimate reasons you are not able to earn the same amount.
If the parent is a shareholder, director or officer of a company, the Court may include the pre-tax income of the corporation or any amount that the corporation has available to be income for the parent. This prevents a payor from trying to hide income in the corporation.
Are There Other Sources of Income that are Included?
If you are receiving other non-recurring income such as stock options or severance pay, these may be included as income for support purposes.
What is Imputed Income?
What if the parent has an option or ability to earn more income but purposely chooses not to work. This is called being intentionally unemployed or underemployed. The Court cannot force a parent to go to work but it can treat the person as having income and ordering payments or offsets based on that imputed income. It’s not necessarily what you are actually earning but what your potential earning capacity that is at issue.
If the parent loses their job and goes back to school to retrain, the Court will consider whether this is reasonable. If the retraining is not considered reasonable, the Court may still impute some or all of the former income.
The child support process is designed to balance the needs of the child with the parent’s need to adapt to changing economic conditions.
What if you Earn More than $150,000?
For incomes over $150,000, the Court has the discretion to depart from the Table amount.
The Court can award the Table amount, regardless of how high the support award might be or the Court can take the Table amount for the first $150,000 and add on an amount that is appropriate considering the condition, means, needs and other circumstances of the children entitled to receive support. The reality is that the Court rarely interferes with the Table amount, even if it is a very high monthly support amount. For the payor to reduce the amount, he or she needs to prove the Table amount is unsuitable and legitimate reasons why.
Other Factors to Consider When it Comes to Child Support in Ontario
Child support is not impacted by any misconduct in the marriage. If the spouse cheated and is now living with a new partner or remarries, this does not affect the Table amount.
The age of the children does not impact the Table amount.
What is a Section 7 Expense
Section 7 expenses are expenses which are special and extraordinary that your children incur. The test is whether the expense is in the child’s best interests and how reasonable is the cost in relation to the means of the family and the family spending pattern prior to separation. The cost must also be necessary for the child’s best interests.
Expenses may include: child care, medical and dental premiums, health expenses, private school tuition, summer camp, post-secondary education or tutoring.
The cost of these expenses are shared by the parents in proportion to their income.
Not all recreational and additional expenses fall within section 7, for example music lessons may not be an extraordinary expense but music lessons for a child performing at a high level and on his/her way to earning a scholarship and competing in various competitions may qualify. It is fact specific.
Does Child Support Stop at Age 18?
Not always. It depends if your child is attending post-secondary school. If you child is no longer living at home, the Court will award the Table amounts for the summers and holidays while living at home but not the months living at school. For the school months, the Court will look at the overall costs of the child and the parties’ resources and divide the costs using a section 7 formula. The Court will also consider the child’s ability to contribute towards his or her expenses.
Do Stepparents Pay Support?
If a step parent has taking the role and place of a parent, the Court can order Table support is owed but it may change the amount to something that it deems as appropriate. The Court will look at whether there are any other parents with legal duties in relation to the child. The step parent payment may be adjusted to consider the biological parent who is already paying support.
Does Parenting Time Impact Support?
If the child is living with one parent at least 40% of the time, child support will be offset. The support obligations of both parents is calculated using the Table. The higher income spouse may get to deduct the lower income spouse Table amount and pays the difference. This is not an absolute formula and if there is undue hardship to the payor he or she may be ordered to pay a different amount.
What is Undue Hardship?
Undue hardship is a very high test and a very difficult one to meet. The parent must show that there would be a gross differential between the two homes and the standard of living if the Table amount were enforced. The Court wants to avoid the children having two homes – the haves and the have-nots.
For the payor, undue hardship may be shown if there are significant debts were incurred by the family prior to separation and in relation to the standard of living or high expenses for prior children or other support obligations.
How do You Calculate the 40%?
There is no standard test or calculation used by the Court. Some judges count the time in days including the time at school. Others only count the time the child spends with that parent.
When is Child Support Paid?
Typically, support is paid on a monthly basis. The Court can order lump sum, periodic payments or a combination of the two. Monthly payments are the norm. Lump sum may be ordered where the kids are over the age of majority. They may be ordered where there is a risk that the payor will default.
Is the Amount of Child Support Ever Changed?
Yes, you should be exchanging income tax returns with your former partner on an annual basis to ensure that the correct amount of support is being calculated. The amount may go up or down depending on your L150 income, subject to certain criteria.