Spousal support and child support are crucial issues that must be determined upon a marriage breakdown. Calculating support obligations can be complicated and will depend on the particular family and financial circumstances. In this blog, we explore the two main sources of guidance that courts will follow respecting child and spousal support: the Federal Child Support Guidelines and the Spousal Support Advisory Guidelines.
The Federal Child Support Guidelines: Child Support is always calculated first under this legislation
The Federal Child Support Guidelines were enacted under the federal Divorce Act. Courts are required to make child support orders that give effect to the Federal Child Support Guidelines as per section 15(3) of the Divorce Act unless one of the circumstances identified in section 15(5) exists:
(5) Notwithstanding subsection (3), a court may award an amount that is different from the amount that would be determined in accordance with the applicable guidelines if the court is satisfied
(a) that special provisions in an order, a judgment or a written agreement respecting the financial obligations of the spouses, or the division or transfer of their property, directly or indirectly benefit a child, or that special provisions have otherwise been made for the benefit of a child; and
(b) that the application of the applicable guidelines would result in an amount of child support that is inequitable given those special provisions.
Prior to reaching the stage of litigation where a court is called upon to make a decision on child support, the parties have the ability to make their own arrangements to ensure that their children have adequate financial support and that each party is contributing to that support in an equitable way.
If parties are unable to reach an agreement on such arrangements, or for those parties seeking to come to a meeting of the minds on child support without the intervention of the courts, understanding the Federal Child Support Guidelines is vital.
Calculating Child Support Based on the Child’s Residence
Where the child or children of the relationship will reside primarily with one parent and with the other parent less than 40% of the time, child support is calculated using tables under the Federal Child Support Guidelines. The tables provide the amount of child support payable by the payor parent to the recipient parent (with whom the children reside 60% or more of the time). The table amounts are based on the gross annual income of the payor, the number of children, and the province of residence.
If there is a less than 20% differential between the time that children reside with each parent post-separation, a different calculation is used. This residential schedule is called “shared parenting” under the Guidelines. In shared parenting, the starting point is the calculation of support payable from one parent to the other. The wording of the separation agreement on this point must address the payment of this support such that it is not merely a set-off. Practically speaking, many payors in these circumstances make a payment to the other parent that is based on the set-off of the support owing by each of them to the other. However, an agreement drafted in this manner may jeopardize the income tax benefits available to the parents.
The amount of support payable varies with the cost of living from province to province, and each province has its own tables. If the set-off amount of support does not adequately address the circumstances of a particular family, a closer and more detailed analysis, including the preparation of monthly financial budgets, must be undertaken to address the proposed adjustment to the child support payment.
Diverging from the Federal Child Support Guidelines: Special Circumstances
In section 5, the Federal Child Support Guidelines give the court the discretion to diverge from the simple table amount of support for a payor parent with an income over $150,000. In such cases, a payor may request that a different and lower table amount of support be paid if, in the circumstances, the amount would not be appropriate. The onus to prove that the discretion should be exercised is on the payor. The deviation from the Guidelines is not automatic.
The Effect of Intentional Underemployment
Section 19(1) of the Federal Child Support Guidelines provides courts with authority to order that a parent is to pay more support than their current, reported income would normally require where there is “intentional underemployment”. Circumstances where parents have been found to have intentionally failed to meet their earning potential include:
- A parent who chose to become a full-time farmer after the marriage, despite working full-time elsewhere and never turning a profit at farming before (Lawson v. Lawson)
- A parent who abandoned a successful business to take a salaried position at a much lower income because of the headaches and stress of being an entrepreneur (Riel v. Holland)
A finding of intentional underemployment does not require that a court decision that a party is deliberately avoiding paying child support by artificially reducing their income. The determination is based upon whether or not a parent is living up to their earning potential. This includes a review of their past earnings, market conditions, health, and any other factor the court deems relevant.
The Spousal Support Advisory Guidelines: The Starting Point for Spousal Support
The federal Divorce Act governs court decisions regarding how much support should be exchanged between spouses following the breakdown of a marriage. In section 15.2, the Divorce Act provides some factors for a court to consider in determining entitlement to spousal support. These include:
- the economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
- the financial consequences arising from the care of any child;
- any economic hardship of the spouses arising from the break-down of the marriage; and
- the promotion of economic self-sufficiency for each spouse within a reasonable period of time.
Once entitlement is established, the court will then determine the quantum and duration of spousal support.
Spousal misconduct during the marriage is not a consideration. However, post-separation misconduct, such as whether a spouse is hiding income, is among the factors that a court can consider in setting spousal support.
The Spousal Support Advisory Guidelines are the product of a three-year government project and provide a framework for courts and individuals to use in making decisions about how much money should change hands between separating spouses. The courts use the Spousal Support Advisory Guidelines as a starting point. There are several factors that can be used to persuade the court to make an order different than what the Spousal Support Advisory Guidelines would dictate.
Although the Spousal Support Advisory Guidelines are not legislated, it is well established that the starting point in a determination of spousal support should be the Spousal Support Advisory Guidelines.
Contact Bortolussi Family Law in Vaughan for Advice on Support Matters
When a relationship ends, there are many factors to consider. The experienced family lawyers at Bortolussi Family Law can guide you through the separation and divorce process and provide reliable advice on child support and spousal support matters. We find personalized solutions that meet the unique needs of your family. To discuss your circumstances and learn about the options available to you, call us at 416-987-3300 or reach out online.