In this pamphlet we help you to understand how an appropriate amount of child support is determined when parents separate. What follows is general information only. We have prepared other pamphlets with specific information on specialized child support topics. You will need to discuss the specific facts of your situation with us to ensure that you have all the legal advice relevant to your situation.

Background
Parents are liable for the support of their children before and after separation. In Ontario, there are two laws that govern how the appropriate amount of child support is determined. The Divorce Act is a federal law that governs divorce proceedings. It provides for child support when parents are married and ask for child support as part of their divorce. The Family Law Act is an Ontario law. It provides for child support between parents when child support is an issue, but not as part of a divorce.

Child support can be ordered for:
• an unmarried child up to the age of 18 years
• a child 18 years or over if enrolled in a full-time program of education or if the child is unable to be self-supporting
• a child who is not your natural child if you treated that child as a child of your family
• there is no further obligation to support a child, 16 years of age or older, who has voluntarily withdrawn from parental control

Income tax changes to child support and the child support guidelines came into effect in 1997. Until 1997, the judge hearing a child support case would make a decision based on all the facts of the case. Although there were some minor differences in the wording of the two Acts, the Courts generally used the same approach. The amount of child support was based on the needs of the children and the ability of the parent to pay support. One approach used by the Courts was to:

• determine the actual expenses of the children and the total income available to the family from both parents
• apportion the expenses of the children between the parents in the proportion that their individual income was to the total family income
• consider the claimed expenses of both parents to see what amounts are reasonable
• once the support payment was determined, it was increased to allow for the income tax that the recipient will have to pay

Income Tax Changes for Child Support After May 1, 1997
As of May 1, 1997, child support received is no longer taxable income for the recipient and no longer a deduction for the support payor. This tax treatment applies to any order or agreement made after May 1, 1997. These changes will only affect pre-existing orders or agreements if they are changed after May 1, 1997.

Child Support Guidelines
Child Support Guidelines were introduced in response to criticism that child support awards were inconsistent. The stated objectives of the Guidelines are:

• to establish a fair standard of support for children that ensures that they continue to benefit from the financial means of both spouses after separation
• to reduce conflict and tension between spouses by making the calculation of child support orders more objective
• to improve the efficiency of the legal process by giving courts and spouses guidance in setting the levels of child support orders and encouraging settlement
• to ensure consistent treatment of spouses and children who are in similar circumstances.

The guidelines are a set of rules and tables for calculating the amount of support that a paying parent should contribute toward his or her children. The table amounts are based on the average costs of raising a child. The guidelines set the amount of support payable using a table based on the payor's income with no consideration of either the recipient's income or the actual expenses of the children. The guideline system applies to all support cases in Ontario Courts.

There are certain aspects of the Guidelines that should be highlighted:
The guidelines are presumptive - this means that a Court must award the table amount of child support. There are only seven circumstances where a Judge has discretion to award an amount of child support different from the table amount:

• the support payor earns income in excess of $150,000.00 per annum
• the child is over 18 years of age
• the parents have split custody (at least one child resides primarily with each parent)
• the parents have shared custody (the child resides at least 40% of the time with each parent)
• the parent against whom support is being claimed is not the biological parent
• the table amount is increased for special or extraordinary expenses (eg. daycare, medical or educational expenses, or extraordinary extracurricular activities)
• the table amount may be increased or decreased if the table amount results in undue hardship

The passing of the legislation is deemed to be a material change in circumstances - If you have an existing child support payment, either as a payor or recipient, you should speak to us to decide whether you should make an application to change the existing child support. It benefit you to apply to the Court to have the order changed to the guideline amount based on the payor's income and potential income tax implications.

The amount of child support awarded can be higher than the guideline amount - for certain special or extraordinary expenses, the court will "add-on" to the guideline amount. The cost of add-ons will be shared between the parents based on their incomes on a proportional basis.

The amount of child support can be lower than the guideline amount - To lower the support below the guidelines, judges must determine that the guideline amount of support would result in undue hardship. This will be very difficult to prove and will involve a comparison of the standards of living of the parents. The circumstances where the child support ordered will be lower than the guideline amount will be very limited. A Court will rarely order child support in an amount lower than the table. A Court also has the power to award support higher than the table amount under this section.

There are significant requirements for financial disclosure - both spouses could be required to provide:

• Copies of every personal income tax return filed for the 3 previous taxation years;
• Copies of every notice of assessment or re-assessment issued for the 3 previous taxation years;
• A statement of earnings or letter from the employer setting out the current rate of annual salary and remuneration;
• Financial statements of any business or partnership for the 3 previous taxation years;
• Financial statements of any corporation controlled for the 3 previous taxation years.

The guidelines are applied differently in cases of split custody or shared custody. "Split" custody is defined as the situation where each parent has custody of one or more children. In other words some of the children reside with the father and some of the children reside with the mother. "Shared" custody is defined as the situation where the spouses share physical custody of a child in a substantially equal way (the child is with each parent at least 40% of the time).

Priority is given to child support over spousal support. Courts must give priority to child support when determining child and spousal support obligations together.

There are circumstances under which the Court may impute income. The Court may impute income when the Court considers it appropriate in circumstances where:

• A parent is intentionally under employed or unemployed
• The spouse is exempt from paying Federal or Provincial income tax
• The spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada
• It appears that income has been diverted to affect the level of child support
• The spouse's assets are not reasonably utilized to generate income;
• The spouse has failed to provide income information
• The spouse unreasonably deducts expenses from income

After the court has made the support order, the support payments will be monitored and enforced by the Family Responsibility Office (FRO).

These changes in child support laws make it very important for anyone who is paying or receiving child support to speak to a lawyer regarding the changes and how they will be affected by them.

Revision Date: Oct. 30, 2001

Your choice of legal counsel is a critical and personal decision. The firm you select should be committed to your business and personal needs.

Since 1922, Pavey, Law, Wannop & Witteveen LLP has been providing its clients - large and small - with quality legal advice and services. Our purpose as a firm is twofold - to assist our business clients in the successful performance of their business, and to provide our individual clients with peace of mind through sound, understandable advice and advocacy.

We are a results-oriented firm. Our business clients receive our superior legal counsel that is practical, and guided as much by the potential impact on their businesses as by the law.

Equally, our individual clients are treated with respect and receive clear legal advice geared to resolve issues and find solutions.

For all of our clients, Pavey, Law, Wannop & Witteveen LLP is committed to delivering superior representation in a prompt, efficient and cost effective manner.

NOTE: This brochure provides general information and is not intended to be a legal opinion. Readers are cautioned not to rely on this information without obtaining legal advice with respect to their own circumstances.