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Parents - Child support

The Federal Method of Calculating Child Support

Things aren’t going well between you and your spouse, and you’ve decided to break up. You have one or more children together. In general, child support will be calculated according to the Québec model for determining child support. But if one of the spouses resides outside of Québec, child support will be determined according to the federal guidelines.

In this Infosheet, Educaloi explains when federal child support guidelines apply and what they entail.

When do the federal child support guidelines apply?

In Quebec, federal child support guidelines apply when both of the following conditions are met:

• child support is requested in the context of a divorce proceeding;
  
• one of the parents resides outside Quebec.

Here’s an example: Mario and Claire want to divorce. They have two children. Mario has been living in Ontario with the children for the last five years while Claire remained in Québec. Child support will be calculated according to the federal guidelines.

Here’s another example: Nathalie filed for divorce in Québec. Her spouse, Simon, has been living in France for several months. They have a two-year old daughter. The child support that Simon will pay for his daughter will be calculated according to the federal guidelines.

Remember, child support payments will be calculated according to the Québec method if both parents live in Québec, whether the parents were married, in a civil union or living common-law. For more information, consult the Infosheet entitled the Québec model for determining child support.

Like the Quebec model, the federal guidelines are used only to calculate child support payments and cannot be used to determine future spousal support.

What are the principles governing the federal child support guidelines?

The principles underlying the federal guidelines are set out in the Divorce Act and the Federal Child Support Guidelines:

• Unlike the Quebec model, the federal guidelines take into account only the payer’s income when determining basic child support. The support creditor’s income is only considered when calculating “special expenses”, which will be distributed in proportion to the parents’ income.
  
• The amount of basic child support is established using tables that vary according to the province or territory. Child support depends on income level and the number of children. A method for calculating support is indicated in the tables when income is greater than $ 150,000 per year.
  
• As a general rule, the payer’s place of residence will determine which table applies; if he resides outside Canada, the table for the recipient’s home province will be used.

In the example of Claire and Mario, the Quebec table will be applied: Mario has custody of the children and is living in Ontario but Claire, who will be paying support, lives in Quebec – the table from her province of residence will apply.

In the example of Nathalie and Simon, Nathalie resides in Quebec while Simon lives in France. The Quebec table will also apply because Nathalie has custody of the child and Simon will pay support. Since he lives outside Canada, the table for Nathalie’s province of residence will be used.

Remember that child support is now tax-exempt: the recipient need not include it as income and the payer cannot claim it as a deduction. The sole exception to this rule concerns child support orders made before May 1, 1997: unless both parents consent, or unless a variation order has been rendered, support remains taxable in the hands of the recipient and deductible for the payer. For more information, consult the Infosheet Taxes and Support Payments  (http://www.educaloi.qc.ca/en/loi/parents/163/)

What income do the federal guidelines take into account?

First of all, note that the calculation is based on the payer’s gross annual income, that is, before tax.

The payer’s income is considered when calculating basic child support. The recipient’s income is taken into consideration only if there are special expenses regarding the children.

Specifically, annual income is that listed on your tax return: the “Total Income” indicated in Revenue Canada’s T1 General Form represents all the various sources of income that are considered when calculating child support. If the payer lives outside Canada, his income is evaluated as if he still lived in Canada. But adjustments could be made based on the taxes he already pays in the country where he lives, if these taxes affect his ability to pay.

The court has a wide discretion to establish or increase a parent’s income in order to determine child support (for example, if the parent refuses to work or works under the table).

According to the federal guidelines, what is a special expense?

Basic child support is supposed to cover a child’s essential needs. The amounts indicated in the tables represent the average costs incurred by a parent: the greater a parent’s income, the more he or she will spend on a child. It is presumed that the custodial parent also contributes financially to the child’s expenses, regardless of the support paid by the non-custodial parent.

As with the Quebec model, some expenses are not considered basic needs for the child and therefore must be calculated apart.

Special expenses include, but are not limited to:

• net childcare expenses;
  
• medical and dental insurance;
  
• costs related to post-secondary education;
  
• extracurricular activities;
  
• health care expenses;
  
• certain costs related to primary or secondary studies or for any other specific educational programs.

Childcare expenses refer to expenses that the custodial parent must pay:

• while at work;
  
• while enrolled in training courses;
  
• if he or she has health problems.

It does not refer to childcare expenses paid during the custodial parent’s leisure time, which are included in basic support. Net childcare expenses are assessed, that is, once related tax credits and exemptions have been deducted.

As for other special expenses, parents must show that they are necessary and reasonable considering the parents’ resources and pre-separation lifestyle.

Will the amount of support vary depending on the type of child custody?

Child custody refers strictly to custody of minor children. The term custody does not apply to adult children, even if they are still dependent on their parents.

Unlike the Quebec model for determining child support, the federal guidelines do not provide for several types of custody. The tables determine support based on sole custody. Only two other situations can influence child support:

• sole custody granted to each parent: if there are two or more children, both parents may be given sole custody (more than 60% of the time) of at least one child;
  
• joint custody: both parents have custody of the child for at least 40% of the time (146 days or more per year).

In the first situation (sole custody granted to each parent), the amount each parent should normally pay the other is calculated: child support represents the difference between these amounts.

In the second situation (joint custody), child support may be adjusted to take into account the time the child spends with each parent, the particular costs incurred due to joint custody, as well as the needs and means of the parents and children.

You should note that parents are not encouraged to obsess over calculating every single minute of custody! If a parent spends just a little more or a little less time with his child, a judge won’t automatically decide that there has been a change in custody and modify child support payments as a result. As always, the child’s best interest is the main concern.

Do the federal child support guidelines apply to adult children?

First of all, it’s important to remember that the federal guidelines only apply to divorces.

An adult child is considered a “dependent” under the Divorce Act if he is unable to provide for himself, for example, if he is ill or studying. In such situations, the parent who is housing the youth can seek child support from the other parent.

The federal guidelines can be used as a starting point from which to calculate support payable for an adult child. The amount can then be adjusted according to the child’s resources, needs, or overall situation. The parents’ financial capacity will also be taken into consideration.

Obviously, a young adult cannot rely indefinitely on his parents for financial support. The general rule today is that it is reasonable for a youth to receive an undergraduate degree and that his parents should financially support him during this period. Still, all depends on the parents’ level of education as well as their income. Furthermore, the courts expect youths to contribute to their expenses (for example, by working part-time), to take their studies seriously and to keep their parents informed of their grades.

Because every situation is different, it is recommended that a family lawyer be consulted to determine whether your adult child is “dependent” within the meaning of the Divorce Act and to calculate the support that may be payable on his behalf.

How long must I pay support determined according to the federal guidelines?

You must pay child support until your child has reached the age of majority and is no longer dependent on his parents.

The parents may agree to change the amount of support if there is a major change in the parents’ or child’s living situation. If they cannot reach an agreement, they can ask the court to decide.

In Quebec, child support is automatically indexed on January 1 each year, unless the order stipulates otherwise.

The order may also require both parents to give each other copies of their income tax returns or other proof of income every year. This way, they can evaluate whether it is necessary to negotiate or modify the support. If your order does not contain such a clause, you can nonetheless ask your ex-spouse in writing to provide you with these documents. If you do so though, you can expect your ex-spouse to ask the same of you.

It would be wise to consult a lawyer if you are having difficulty getting this information from your ex-spouse, or if you want to vary the amount of child support.

Can parents agree that the amount of child support will be different than that indicated in the guidelines?

Yes, as with the Quebec model, the law permits parents to agree to a different amount of child support. The court must consider the guidelines, and it can refuse to ratify an agreement it considers unreasonable. It is therefore important that the parents demonstrate clearly why they have agreed to a different amount. Obviously, if the parents agree to an amount that is higher than the amount in the guidelines, it will be much easier to have the agreement approved than if the amount is lower.

Department of Justice Canada publishes information booklets on the federal child support guidelines. You can obtain free copies on their website  (http://canada.justice.gc.ca/en/ps/sup/grl/glp.html)

Can I contest the amount of child support determined under the federal guidelines?

As with the Quebec model, parents who believe that the amount of child support is causing them “undue hardship” can ask the court to reduce or increase the amount.

The law offers examples of situations that might cause “undue hardship”:

• access-related costs: for example, if the parents reside a considerable distance from each other;
  
• other support obligations: for example, if one of the parents has custody or supports a child born of a different relationship;
  
• abnormally high debts incurred to support the family: for example, if one of the parents is solely responsible for paying debts taken on for the needs of the family while they were still living together.

To convince the court to reduce or increase support, you must show that undue hardship is caused by the application of the child support formula. This does not mean simply a lower standard of living, but an inability to pay the required amount or to make ends meet.

The court must refuse a request based on undue hardship if it finds that, after applying the child support guidelines, the household of the parent claiming hardship will have a higher standard of living than the household of the other parent. The court could then consider a new spouse’s income because the term “household” includes all people living with the concerned spouse who contribute financially (by sharing expenses, etc.). But this definitely doesn’t mean that a new spouse could be required to pay support for the other spouse’s child.

What documents must the parents provide during an application for child support?

The parent who applies for child support must provide the following documents:

• copies of his or her income tax returns and notices of assessment for the last three years;
  
• his or her most recent pay slip;
  
• his or her financial statements for the last three years if he or she is an independent worker or self-employed.

The parent from whom support is being sought must provide the same documents.

I obtained a child support order before May 1, 1997. Would it benefit me to apply for a variation of the support according to the federal guidelines?

You are not automatically subject to the new child support guidelines whether you are paying or receiving child support awarded before May 1, 1997. You must apply to have child support varied in order to benefit from these guidelines.

One of the major differences between the new system and the former one is the tax consequences of support. Before May 1, 1997, child support was tax deductible for the payer and taxable income for the recipient: these tax implications were most likely taken into account when determining the original amount of child support.

For this reason, it is advisable that you consult a professional to determine whether the new guidelines would benefit your particular situation.

Furthermore, an application for variation will not be granted automatically. The courts have rejected applications, specifically where the new guidelines would have little impact or would penalize the children.

For more information, consult the Infosheet on Taxes and support payments  (http://www.educaloi.qc.ca/en/loi/parents/163/)

My ex-spouse got a raise a few months ago. Can I ask retroactively for the amount of support that my children should have received?

Yes. The income of the payer is one of the elements on which child support is based (See the question “What are the principles governing the federal child support guidelines?”). That means that the amount of child support can increase or decrease with the income of the payer. However, child support is not automatically adjusted when the payer’s income changes. One or both parents must ask for a change in the initial child support judgment.

Since child support doesn’t automatically change, a parent may pay the wrong amount of child support for months, or even years. In those situations, the other parent can ask the court to go back (retroactivity) and give her the difference between what should have been paid in terms of child support, and what was actually paid.

For example, Maya earns $60,000 a year and pays $492 per month of child support for her son Kyle. Kyle lives with his dad, François, in New Brunswick. In June, Maya’s company does very well, and her salary gets increased to $75,000 a year. Maya only tells François about her raise in September. With her new salary, Maya should have been paying $617 a month in child support, a difference of $125 a month. In September, François can ask the court to have Maya pay to him the $125 difference in child support for every month during which Maya was paying the wrong amount of support.

While keeping in mind the best interests of the child, the court will make a decision on whether or not to order a retroactive payment of child support after considering:

• Whether the parent receiving the child support has offered a reasonable excuse for his delay in applying to change the judgment (e.g. Maya didn’t tell him about the raise);
  
• The payer’s behaviour (e.g. did Maya try to hide her raise? Or, on the contrary, did she immediately bring it up with François?);
  
• The circumstances of the child;
  
• The difficulties (hardship) that the retroactive payment might cause to the payer;

If the court considers that a retroactive child support payment is appropriate, it may use the date on which a demand letter was sent by the parent asking for the change. When the parent asking for the change did not send a demand letter  (http://www.educaloi.qc.ca/en/loi/other_infosheets/31/), the court can use the date of the application to the court. In our example, the judgment would say that the child support of $617 a month is retroactive to September, the month in which François asked the court for a change.

However, in some situations, the court can decide that the child support order should go back to another date like the date on which the salary changed (so, June in the example involving Maya and François). The parent asking the court to use a different date must prove that it was impossible for him to act any sooner than he did. A court using a different date will generally not go back more than 3 years in time.

Can I apply for child support without a lawyer?

Yes. In recent years, the Quebec and federal guidelines for determining child support have been simplified and harmonized, tempting many people to apply themselves to the courts for child support without the assistance of a lawyer. It is their undeniable right to do so.

On the other hand, while the guidelines may seem simple at first glance, the amount of child support is likely to vary according to the particular circumstances of each couple. It is recommended to at least have a family law specialist verify your calculations.

For more information, consult the section on the Superior Court, Family Division   (http://www.educaloi.qc.ca/en/cotecour/superior_court/family_matters/)in Côtécour.