Child + Spousal Support
Child + Spousal Support
Strong, clear and fair agreements on child support and spousal support take time and effort to achieve but pay enormous rewards by protecting the needs of children and their parents and reducing the potential for future conflict.
Child support is a child’s right. Parents and/or guardians cannot contract out of this obligation. The court maintains jurisdiction over child support and can order it pursuant to the Divorce Act (Canada) and/or the Family Law (Alberta).
Who is entitled to child support?
Child support is payable for children under the age of 18 who have not withdrawn from the charge of their parents and/or guardians. Children over the age of 18 may be entitled to receive child support if they are full-time post-secondary students or unable to care for themselves due to disability or illness.
The parent seeking support for adult children must establish entitlement.
What are the guidelines for child support?
The amount of child support is usually determined by the Federal Child Support Guidelines.
The Alberta Child Support Guidelines apply where the parents lived in a common-law relationship, were not married, or where a divorce action has yet to be started.
There are two ways in which child support is paid:
- Based on the income of the payor parent, the appropriate guideline is followed to determine the basic (or section 3) amount of child support payable by that parent for the number of dependent children. For example, if someone makes $28,000.00 per year, the base amount of child support payable pursuant to the guidelines is $228.00 per month for one child and $411.00 for two children. The parent receiving child support is not taxed on the amount and the parent paying child support cannot claim a tax deduction.
- In addition to the base amount of child support
payable, a payor parent may pay a proportionate amount (section 7) or
special expenses. These additional amounts of child support include:
- The after-tax cost of childcare required for a parent to maintain employment or go to school
- The children’s portion of premiums for medical/dental insurance coverage;
- the uninsured portion of healthcare costs (dental, medical, orthodontic, optometrist, etc.)
- Extraordinary costs for a child to attend primary or secondary schooling (i.e. tutoring, private schooling, etc.)
- Expenses for post-secondary education (including books, tuition, and living costs if the child is outside of the parent’s home)
- “Extraordinary” expenses for extracurricular activities
What qualifies as an “extraordinary” extracurricular activity for one family may not be extraordinary for another. In these situations, the court frequently takes a look at what the family’s combined income is to determine if an expense is considered “extraordinary.” For example, karate lessons may not be considered an extraordinary expense when an individual earns $75,000.00 per year; however, they may be considered extraordinary when a payor parent earns $25,000.00 per year. The amount that a parent pays for extra expenses is determined as a proportionate share of the total income earned by the payor parent and the recipient parent. For example, if a payor parent earns $80,000.00 per year and the recipient parent earns $20,000.00 per year, their total income is $100,000.00. The payor parent would be responsible for 80 per cent of the extra expenses and the recipient parent would be responsible for 20 per cent of those extra expenses.
How is a payor’s income determined?
For individuals who receive a salary and/or wage, the individual’s income as reflected on line 150 of their income tax return (gross income) is used to determine the appropriate income upon which child support would be paid.
In situations where an individual is self-employed or paid by a corporation in which he or she has an interest, the income determination is more involved. It is important to seek the advice of a lawyer/accountant when determining gross income for self-employed individuals or those who have an interest in the company that employs them.
If there is uncertainty around the payor’s income, a notice to disclose/application (Divorce Act) or request for financial information (Family Law Act) can be filed. The payor parent would then have to produce pay stubs, copies of their last three income tax returns, financial statements for corporations in which they have a one per cent or more interest, and additional income information as outlined in that form. If a notice to disclose/application or request for financial information is filed, the person requesting the financial information must disclose the same information.
At times, the court can “impute” income. Examples of this include where:
- An individual is intentionally unemployed or under employed.
- An individual does not pay income tax on their income (i.e. they work outside of Canada).
- Income is being diverted.
- The individual has failed to disclose all of the relevant financial information.
- The individual is unreasonably deducting expenses from his/her income.
- Other relevant circumstances
How do you apply for child support?
To apply for child support, a party files the appropriate application form supported by a sworn statement outlining where the child resides, the payor’s income, employment and the recipient’s income, etc.
How do you collect child support?
Once a court order for child support is obtained, the recipient parent can register the court order with the Maintenance Enforcement Program. Their website offers a step-by-step guide. The payor parent then makes payment to the Maintenance Enforcement Program. If they are late or miss payments, the Maintenance Enforcement Program can take collection steps which include garnishing wages, suspending a person’s drivers’ licence, putting a hold on an individual’s passport, etc.
Spousal or partner support is the payment from one spouse to the other following the breakdown of a marriage or common law relationship. Payments are commonly made monthly but may be paid at other intervals or as one lump sum. Spousal support is the term used for married couples and is covered by the Divorce Act. Adult interdependent partner support is the term used for common law couples and is covered by the Alberta Family Law Act and Adult Interdependent Relationships Act.
The mere breakdown of a relationship does not necessarily mean that a spouse or common law partner is entitled to support. Entitlement usually arises where:
- The relationship created an income-earning disadvantage for a spouse, such as where one spouse’s career was put on hold for the other spouse or for the benefit of the family.
- There is a significant reduction in the standard of living of a spouse.
Entitlement or non-entitlement may also arise from a contract, such as pre-nuptial agreement, separation agreement, or minutes of settlement.
There are many factors to be considered, such as the length of the relationship; the spouses’ respective roles; the effect of debts or other financial obligations; other available assets; the impact of child support; the spouses’ ages; career or education plans; and illness, disability, or other personal factors.
There are spousal support advisory guidelines that can assist in calculating support, but they are not law like child support guidelines, and a judge is not required to follow them. The guidelines do not address entitlement and formulas differ when there are children. In Alberta in particular, the analysis of support is extremely fact specific, and judges have the ultimate discretion over whether to award support, and if so, to set the amount (quantum) and determine the term (duration.)
Where support is payable there are many other issues to consider:
- Lump sum support is not tax deductible by the payor and does not have to be claimed by the recipient.
- Periodic support payments must be reported on both spouses’ tax returns and is tax deductible for the payor and taxed in the hands of the recipient.
- Support may terminate on a specific date, at which time it may or may not be open to review depending on the wording of the agreement or court order.
- Support may be for an indefinite period, which means that it is payable for an undefined period and is open to review (including termination) at a later date.
- The amount of support may step down over time or could be indexed to increase with inflation or by some other amount.
The issue is complex, and you will be best served with the assistance of an experienced Bruyer & Mackay advocate.