The intricacies of child support laws in British Columbia may appear daunting. At Mills Family Law, our seasoned family lawyers in Vancouver concentrate on defining guideline income, managing Section 7 expenses, and promoting complete transparency in income reporting for child support considerations.
Child support is money paid by one parent or guardian to another for the benefit of their child(ren). Parents have a legal duty to support their children financially. This responsibility exists even if the parents have never lived together, or if the parent paying child support has never lived with the child.
Child support is the legal right of the child, not the parent who receives the support, which means that a parent cannot negotiate away the child’s right to receive support. An agreement that releases a parent from paying child support will not be legally enforceable.
Child support includes basic child support under section 3 of the Federal Child Support Guidelines (the “Guidelines”), and special or extraordinary expenses under section 7 of the Guidelines. In most cases, the amount of basic child support that must be paid is determined solely by the Federal Child Support Tables which are included at Schedule 1 of the Guidelines. The Tables set support according to the income of the parent or guardian paying support, and the number of children. Though are some exceptions, the amount of child support payable is almost always set using the Tables.
You can quickly calculate child support using this free calculator.
Certain expenses for a child may qualify for additional child support, over and above the basic amount payable under section 3 of the Guidelines. These are known interchangeably as “Special and Extraordinary Expenses” or “Section 7 Expenses” and are defined under section 7 of the Guidelines. An expense that qualifies as a Section 7 Expense should paid by the parents in proportion to their incomes.
Section 7 of the Child Support Guidelines provides a list of expenses that may qualify.
These include:
To determine whether an expense from the list above qualifies as a Section 7 Expense, a court will weight whether the expense is reasonable in relation to the incomes of the parents. For parents with lower incomes, fewer expenses will be considered reasonable. Daycare is almost always viewed as reasonable, as this extra expense is often necessary to allow a parent to work. Fees associated with enrolment in an expensive sport such as skiing may be seen as reasonable for parents with mid to higher incomes. An expensive private school may be reasonable for parents with high income levels.
The expense must also be necessary when considering the child’s best interests. Examples may include medical costs and special tutoring or counselling services. Costs associated with nurturing and encouraging a child’s talent may be considered necessary.
To determine whether an activity or program listed at paragraphs (d) and (e) is extraordinary, the expense should be assessed in relation to the income of the parent receiving child support and any special needs and talents of the child(ren).
When children spend most of the time with one parent (over 60% of total parenting time) child support is only paid by the parent with less than 40% of the parenting time. In this case child support is based on the guideline income of the parenting paying child support, and the number of children for whom support is payable. These rules are set out at section 3 of the Child Support Guidelines.
If both parents have at least 40% of the parenting time, then parenting time is shared. Section 9 of the Child Support Guidelines and the 2005 Supreme Court of Canada decision in Contino v. Leonelli-Contino together provide the framework for determining child support when parenting is shared:
If parents have more than one child and each parent has over 60% of parenting time with at least one of those children, each parent should pay child support for the child(ren) with whom they spend less than 40% of parenting time.
The Canadian Federal Child Support Guidelines (the “Guidelines”) were first created in 1997 to establish a standard of support for every child whose parents have separated. The Guidelines help to ensure that children continue to benefit from the financial means of both parents.
The guidelines include a formula, contained with tables that set out child support amounts based on the income of the parent paying support, and the number of children that are eligible for child support. This the guideline table amount of child support.
In almost all cases, judges are required to follow the Guidelines to determine the amount of child support. Judges rarely depart from the Guidelines, except where a payor of child support is experiencing financial hardship, or where their income is over $150,000.
Child support and proportionate sharing of Section 7 Expenses is based on the payor’s Guideline Income. If you are paying or receiving child support in British Columbia, you should understand how income is calculated under the Federal Child Support Guidelines to ensure that the amount of support is paid.
The starting point to determine your Guideline income is “total income” set out at line 15000 of your T1 General income tax form. This will generally apply to an employee receiving a standard T4. From here, the Guidelines set out adjustments to income to accurately capture all forms of income for child support purposes.
Section 18 of the Guidelines allows for adjustments to income where the spouse is a shareholder, director, or officer of a corporation. This allows the court to “‘lift the corporate veil’ to ensure that the money received as income by the paying parent fairly reflects all of the money available for the payment of child support”: see Baum v. Baum (1999), 182 D.L.R. (4th) 715. For example, certain corporate income is discretionary and can be retained in a corporation and deferred to another tax year. In certain circumstances, all pre-tax corporate income may be included in a payor spouse’s income. This is not a requirement, however and analysis under section 18 of the Guidelines must allow sufficient cashflow for legitimate corporate needs.
Section 19 of the Guidelines allows the court to add, or “impute” income in certain circumstances, such as where the payor is under-employed or has unreasonably deducted business expenses from income. Income may be imputed in other circumstances, such as where different sources of income are not taxed equally, including capital gains and dividends received from a Canadian corporation. Non-taxable benefits may need to be “grossed up” to reflect the actual benefit to the recipient. Income received in tax jurisdictions with lower or higher income tax rates may need to be adjusted. Investments structured within a limited partnership may permit disproportionate deductions from income.
At Mills Family Law we are experienced in determining Guideline income. We will accurately capture all forms of income for child support purposes. Contact us to schedule your first, free consultation with a lawyer.
When child support is payable by either parent after separation, you should be prepared to provide a sworn financial statement, early on in the process. The financial statement sets out 1) your income, 2) your expenses, 3) your assets and 2) your debts. You should also exchange the following documents:
Keep in mind that you have an ongoing obligation to disclose any documents that are relevant to your income.
If you own your own business, the income you are paid by the business will not solely define your income for the purpose of calculating your child support obligations. After providing financial statements for your business, you will then need to show that all expenses claimed by the business are necessary for its normal operation. The portion of any expenses for which you received a personal benefit should be added back to your income. For example, if your business pays 100% of your vehicle fuel bill but you use your vehicle for personal use 25% of the time, that portion of the expense should be added back to your income. It is important to note that expenses that the Canada Revenue Agency accepts as deductions from income do not always qualify as deductions from income under the Guidelines.
There are various tools available to move proceedings forward in the face of non-disclosure. These tools include imputing income to payors who have failed to make adequate disclosure, drawing adverse inferences with respect to their income-earning potential, awarding fines and costs, and striking pleadings. These tools reduce the likelihood that you will be forced to apply to court multiple times to secure disclosure. Mills Family Law has extensive experience bringing court applications for income disclosure.
Parents have a legal obligation to earn as much as they reasonably can to meet their obligation to support their children. Under section 19 of the Guidelines the court can impute income when someone who is required to pay child support is voluntarily unemployed or under-employed. Courts will not assess the amount of income a spouse is actually earning, but what they could earn if they were working to capacity. The court will assess the individual’s level of income in light of their age, education, health, work history, availability of employment, and their physical and mental capacity to work or undergo job training.
The duty to pay child support generally continues until the child turns 19 years old. If a child is still dependent after they turn 19, then the right to financial support continues. For example, the child may have an illness or disability, or may still be in school or university.
If a spouse cannot afford to pay child support, they may be able to claim “undue hardship” under section 10(1) of the Guidelines. The obligation to pay child support must cause more than inconvenience and rise to the level of an "exceptional" or "excessive" burden. Section 10(2) of the Guidelines provides a list of circumstances which may give rise to a finding of undue hardship, including:
If a court finds that an award of support would cause undue hardship, an order can be made for a different amount of support than the Guideline amount. However, even if the court finds that a spouse would experience hardship under section 10 of the Guidelines, the court must deny a spouse’s application for relief if that spouse’s household would have a higher standard of living after departing from the Guidelines.
Both the Divorce Act and the Family Law Act address obligations of step-parents to provide support for children. Under the Family Law Act, "stepparent" means a person who is a spouse of the child's parent who has lived with the child. A child's stepparent does not have a duty to provide support for the child unless 1) the stepparent contributed to the support of the child for at least one year, and 2) a court application for the stepparent to pay support has been brought within one year since the stepparent last contributed support. The stepparent's duty is secondary to that of the child's parents and guardians and is limited to the standard of living experienced by the child when living with the stepparent and by the length of time that the child lived with the stepparent.
To determine whether or not a person “stands in the place of a parent” the court will also assess the following:
Though this is a common concern, courts rarely define how child support must be spent. This is because a parent is generally presumed to make decisions in the best interests of their child.
You must have an order or a family law agreement for child support before you can enforce payment of child support. If time has passed and you want to recover child support that should have been paid, you will need an order for retroactive child support.
You can get a court order for child support by bringing a court application, in either Provincial Court or Supreme Court, for an order under section 149 of the Family Law Act or for enforcement of an Agreement under section 148 of the FLA.
The court has power under section 230 of the Family Law Act to enforce child support orders and agreements by requiring a person in breach of an agreement to 1) provide security for future compliance; 2) pay expenses caused by the breach; 3) pay up to $5,000 to the other party, or to a child or spouse who was affected by the breach, or 4) pay up to a $5,000 fine. The court also has “extraordinary enforcement powers” under FLA s. 231 to imprison the person in breach for up to 30 days.
Additional enforcement for agreements about child and spousal support is available through the Family Maintenance and Enforcement Program (“FMEP”). The FMEP provides a free enforcement service and has power to garnish wages from the payor of support and can also seize passports and driver’s licenses to encourage payment.
The test for retroactive child support is set out in the 2006 Supreme Court of Canada decision D.B.S. v. S.R.G. (“D.B.S.”). D.B.S. provided four factors that must be considered when deciding whether to award retroactive child support:
None of these factors is decisive and the courts should take a “holistic view” of the circumstances. The court will also ask whether it is fair to disrupt any status quo agreement between the parties. A retroactive order for child support will usually be limited to no more than three years before the date on which formal notice of their support obligation was given to the payor parent.
The Family Maintenance Enforcement Program (FMEP) is a free service of the British Columbia Ministry of Attorney General that each year collects over $200 million in child and spousal support for over 37,000 BC families. The legislation that governs the FMEP is the Family Maintenance Enforcement Act (“FMEA”).
Filing a support order with the FMEP director is voluntary, except for interjurisdictional support orders which the court may file under the Interjurisdictional Support Orders Act (“ISOA”) .
A support order can be filed by either the payor or the receiver of support and does not have to be in arrears before it is filed. If support falls into arrears, FMEP will take action to enforce the order.
The FMEP offers advantages over enforcement of support orders through litigation.
For example:
1. Enforcement through FMEP is free and does not require a lawyer.
2. FMEP enforces payment without contact between the parties, which can help lower the emotional stress involved in enforcing support orders.
3. The FMEP has unique enforcement tools, including:
However, there are circumstances when enforcement through the FMEP may not be appropriate. For example:
The court can replace child support terms in a family law agreement if they depart from the Federal Child Support Guidelines in a way that is unreasonable, pursuant to section 148 of the Family Law Act. The court can also replace child support terms if the family law agreement provides for inadequate child support, or if after the agreement is signed:
Mills Family Law has extensive experience with changing child support agreements and child support orders. We can help.
