Types of Child Support
There are two forms of child support. This is basic support and support for special or extra ordinary expenses.
Basic support is support, which deals with the daily needs of the child and is based upon a table published by government for British Columbia. The parent that does not have primary care and control of the child at least 40% of the time pays support based on the table applicable for their province in which they live. However, if the payor lives outside of Canada, the amount applicable is the amount, which would be applicable if the payor lived in the province, where the child resides with their primary caretaker.
Support is usually based on the most current information available, which is taken to be the parties’ total income from their T1 income tax return for the year preceding the application. This is the case whether or not it is an interim or final Order and/or their current pay stub. If last year’s T1 total income or the pay stub is not a fair approximation of income, the Court can look to more current information or past information as to income, or can discount irregular payments like non-recurring overtime or one-time bonuses. Evidence must be called on this point if it is in dispute.
If the Court believes that current income measures are not appropriate (usually because a person like a salesman may have fluctuating income) it may take an average over a period of years of income. The common average is often three years.
The Court can also disallow deductions from the tax return to determine the income if it feels those deductions unfairly lower income for child support purposes. This is generally an issue with sales people and business owners who can deduct personal expenses, like entertainment expenses and automobile expenses, from income that other people cannot. By disallowing these expenses, a person’s T1 total income raises and they pay higher child support. It is not in every case that this will happen. The goal of the guidelines is to determine real income and usually legitimate business expenses are allowed.
Once a parties’ T1 total income is determined, and the number of children is known, it is an easy matter to go to the chart applicable and determine the amount of basic support payable. For example, a person who is paying support to the primary care taker of their two children who makes $60,000.00 a year would pay basic child support of $907.00 per month. The basic guideline amount can be determined by referral to other sources online. We also have the ability in our office to determine exact guideline amounts.
For paying parents who have incomes over $150,000.00 per year, the courts start with the proposition that the guideline amount is the appropriate amount. However, the court can depart from the table amount if it considers it is not appropriate given the actual costs of raising the child(ren) at issue.
DEVIATION FROM THE GUIDELINE AMOUNT
It is not always that full basic support will be paid. The Court may depart from the full guideline amount in the following circumstances:
a) The child at issue is over 19 years of age;
b) The child is a stepchild;
c) The payor has care of the child more than 40% of the time, being waking and sleeping hours;
d) The payor is under a situation of undue hardship arising from the relationship;
e) The payor’s income is over $150,000.00 per year;
f) The payor parent making other provision for the child in lieu of support.
When a child is over the age of majority, the Court may not impose the full guideline amount and may look at the overall circumstances of the parents, the child and the child’s other resources, including part time jobs and student loans. Generally however, as long as the payor parent has a good relationship with their child and the child is in post secondary school full time and getting average grades, the obligation will usually continue as long as their dependence on their parents continues and they are going to school. Generally, even with children who are going to school after the age of 19, the support does not continue beyond the first degree which is usually 21 years of age. The continuation of support is contingent on many factors, as noted above, which should be reviewed with counsel.
When a person is being obligated to pay support for a stepchild, the Court again will first look to the table amount but can depart from this more readily and consider the means of both parties in a broader way and can most importantly consider the ability of the biological parent who does not have primary care of the child to support that child. In this context, it is always important to know if a stepchild’s biological parent who is or should be a payor is able to pay support and is doing so because this can totally eliminate any need for a stepparent to pay support. Again, the circumstances should be reviewed with a family law lawyer.
If parties are operating in a situation where they share care of their child and a party who would be a payor has the child with them 40% of the time, the Court may (not must) depart from the guideline amount and may impose no obligation on the payor parent or a partial obligation. Often, if one parent has a lot more income than another, the obligation to pay full support is still imposed, but in cases where parties are in a relatively similar income situation, it is common for the Court to impose a lesser obligation like ½ of the support or no support being paid to the party that has the children most of the time.
The Court can also depart from the guideline amount if the payor is in a situation of undue hardship. These sorts of applications are quite complicated and rare and generally involve a situation where the payor has other support obligations and cannot afford to pay guideline support for each and every child and spouse they have or are servicing a large amount of debt from the matrimonial relationship. The calculation involves comparing the standard of living of each parent’s household based on the number of people living in the household and household income, and calculating a ratio number for the payor and other parent’s household compared to a population average. Only if the ratio for the payor is lower than that of the other parent is the Court entitled to lower the amount of support and this is discretionary. Quite frankly, because the Court is often left with two households that are not economically well off, they will decline to vary the amount because the Court determines it is better that the children receive the support.
As stated above, the court can also depart from the guideline amount if the payor payment makes over $150,000.00 per year. The main focus of the court’s determination is what it actually costs to raise the child(ren) at issue and whether or not the guideline amount is appropriate in the circumstances. Generally, the guideline amount is applied. The amount of $150,000.00 is contained in the schedule and then a proportion of the payor’s income above $150,000.00 is included in the calculation. We have the ability to assist you in calculating the exact amount in support payment in these circumstances.
It is also possible that the court will reduce a child support obligation both with respect to extraordinary expenses and basic support where a payor parent has made another arrangement with respect to the support of a child. This could involve things like the payment of a mortgage in a home in which the child lives or the settling of funds upon the child or the recipient parent pursuant of a trust or another arrangement. These are only two examples. The key is, however, that the arrangement must be something which is extraordinary and under which the child is truly gaining an economic benefit. In this regard, simply allowing the child to reside in a home on an interim basis where the recipient parent is residing without any additional payment to household expenses has being rejected as not being another arrangement in place of child support.
EXTRA EXPENSES AND HOW THEY ARE CALCULATED
The Court can also make an Order with respect to extra-ordinary expenses. These additional child expenses are those, which are necessary and reasonable for a child’s care like medical, dental and educational expenses. In determining what is reasonable, the Court will look at how the parties lived prior to separation and all of their financial resources at the time of the application. Certain expenses like daycare, medical expenses, insurance premium expenses, private school and post secondary school expenses along with extracurricular activities are included to this category but do not necessarily exhaust what could be an extra expense.
What is extraordinary depends on the parties’ situation. This is a first consideration as certain fees that are nominal are not extraordinary and not covered. For example, minor school fees for supplies would be included in the basic amount of support but horseback riding lessons could be an extraordinary expense given the high costs dependant on the party’s income.
Once the expense is found to be extraordinary, the Court will consider whether or not it is reasonable. Important to this determination is what the parties decided and how they lived when they lived together. For example, if parties decided that a child should go to a religious school while they were together, it may be that the Court will impose this obligation due to the agreement. In determining what is reasonable, however, the Court also has to look at the income of the parties after separation. In this regard, a decision to go to private school may be reasonable while parents reside together but unaffordable when living apart. Another example would be the situation of getting daycare as opposed to a nanny. If the parent with primary care works, it would be reasonable for there to be an expense, which would be shared for daycare as it relates to the child. However, quite often, people put forward expenses for a nanny, which is much more expensive than daycare. Quite often, these expenses are disallowed in favour of daycare because the nanny expense is seen as unreasonable.
Once expenses are deemed to be reasonable in this category, they must also be necessary. If they are not, they will be disallowed. In this context, quite often where both parents work, daycare is considered to be reasonable and necessary. However, if the parties’ parents could look after the children at no cost, this expense would likely be considered unnecessary and therefore could be disallowed. This is simply one example.
Once it is determined that an expense beyond basic support is reasonable and necessary, the parties will generally share the expense in proportion to their T1 incomes, net of any applicable subsidies. This includes both the tax credits received for the child and any other subsidy. So in the example given above, if there was no daycare subsidy but only the tax credits of the spouse who had the children were considered, the net monthly cost that the parents would share would be $50.00 per month being the $1,200.00 cost of daycare less $606.00 of tax credits divided by 12 or $50.00 per month. This will then be split on a 60/40 basis with the paying parent paying $30.00 per month in addition to their basic support payment of $907.00 per month for total support of $937.00 per month.
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