Child Support in Ontario
Child Support Guidelines
To view the Federal Government's Simplified Table for Ontario:
A child support order is a document from a court stating when, how often, and how much the payor is to pay for child support. Historically, child support in Ontario and the rest of Canada was determined according to the child's needs and the parent's ability to pay. In 1997 the Child Support Guidelines were introduced across the country. At that point, child support payments were no longer tax deductible and the recipient did not need to declare receipt of child support in his/her income.
The Guidelines are based upon the income of the support payor and the number of children who are entitled to support.
The objectives of the Guidelines are as follows:
Calculating the Child Support Amount
The starting point for the court in calculating child support is the Child Support Guidelines chart. Having said that, the court has varying amounts of discretion to deviate from the Guideline amount in the following situations:
Defining the income to be used for calculating support amount
According to the Guidelines, the starting point in defining the income to be used for calculating the child support payment amount is the income reported under "Total Income" in the income tax forms.
However, in some cases simply applying this Total Income amount does not fairly represent the annual income of the support payor because of historical income fluctuations or other non traditional income sources. For this reason, the court may decide to use the average total income for the past three years.
A different situation may arise if a spouse is a shareholder, director or officer of a corporation, and the reported income does not fairly reflect the value of the services provided by the spouse to the corporation. In such a case, the court can assess the income up to the amount of the corporation's pre-tax income. The corporation's pre-tax income must not include any money or benefits given to people that aren't at arms length (e.g. relatives) - unless the spouse can prove that the payments were reasonable under the circumstances.
In addition, the court has a broad discretion to impute income in particular circumstances set out in the Guidelines. This includes situations where the spouse has been intentionally underemployed, unemployed, is exempt from paying federal or provincial income tax, or is paying income tax at a rate that is significantly lower than that in Canada or where there are unreasonable deductions of expenses from income or otherwise not generally utilizing his or her assets or capacity to earn.
Undue hardship and the living comparison test
Section 10 of the Guidelines is often invoked but seldom applied. It provides that the court may award child support in an amount different than the one set out in the Guidelines if the court finds that the spouse making the request would otherwise suffer undue hardship.
The Guidelines sets out circumstances that may cause undue hardship including: high debts incurred to support the family, high costs of exercising access to the child, an Order or contractual legal duty to support another person, rent, legal surety to support another child or a legal duty to support another person who is unable to care for themselves.
Satisfying one of these conditions does not automatically entitle the claimant to relief. Once that barrier is overcome, the next obstacle is to meet the threshold test to prove that the standard of living in the claimant's household is lower than the standard of living in the household of the other party. It is necessary to compare the income of all members of each household including the children when doing this calculation. This requires the parties to disclose the income of his or her other partner immediately. If undue hardship is proven and the claimant passes the standard of living comparison test, the court may then make a child support order in an amount that is different than that set out in the Guidelines. It is very rare in my experience that the undue hardship test is applied.
Termination of Child Support
Child support orders with a specified termination date
Most child support orders filed with FRO do not have specific cut off or termination dates set out. In those rare circumstances when the date of termination of child support is specified up front in the Order, FRO will stop enforcement when that date has passed.
Child support termination under the Family Law and the Divorce Act
In cases when child support termination date is not specified in the support order, determining termination of the support is directly related to the way the law - the Family Law Act or the Divorce Act - defines a child’s eligibility for support.
Under the Divorce Act, a child is defined as a child of the marriage. A child of the marriage legally means the child of two spouses who at the material time:
It is generally accepted that a child who is pursuing post secondary education is unable to withdraw from parental charge and as such qualifies for support. There is some suggestion that the Family Law Act obligation is somewhat more restrictive than the Divorce Act obligation because the child must be in a full-time program of education.
There are numerous decisions of the courts struggling with the child support termination date issue with respect to children who are in post secondary school education. Although a specific case analysis is required and no definitive rule is applicable on this issue, the courts have been flexible in these cases in giving latitude to children who are pursuing their education in a good faith manner and have had some difficulty attending "full time" in that pursuit.
These cases are all difficult to settle or predict and often create difficulty when FRO is enforcing the existing Order and the payor is of the view that the child no longer qualifies for the child support. FRO has a duty to continue to enforce the existing order until such time as that order is changed or the parties agree that the support obligation has terminated.
If the parties to a support order filed with FRO agree on the termination of the child support, each of the parties shall give notice of the termination of the support obligation under the Order. If there is a dispute between the parties as to whether or not your obligation has terminated, it is up to the parties to return to the court that made the Order to have the issue resolved. In the meantime, FRO will continue to enforce the existing Order.
After child support termination: repayment from the support receiver
If the court finds that a support obligation has terminated, it has discretion to order repayment in whole or in part from the person who received support after the obligation was terminated.
It is important to obtain legal advice in these cases early so that steps can be taken to obtain temporary relief from support enforcement while waiting for the resolution of the child support termination issue between the parties.
Motion to Terminate Child Support
Payors considering motions to termination of child support are often faced with claims for retroactive child support or section 7 expenses when the recipient is asked to terminate the obligation. Failure to pay child support in accordance with income will be addressed when the payor seeks to end the payments. Complex legal and evidentiary issues are often encountered at this stage of the process.
Motion to Change
Unlike ordinary debts (e.g. credit cards), child support arrears can be challenged and adjusted retroactively in certain cases. Statements of Arrears or demands for payment or collection of arrears are not the final answer on what is owed. Either party has the right to try to renegotiate arrears or to bring to the Court a Motion to Change child support. In a Motion to Change (also known as Motion to Vary) child support, the applicant requests the variation of child support and the arrears to more accurately reflect the situation of both or one of the parties over the period of time that the arrears accumulated.
This possibility to change child support arrears makes a support debt unlike any other judgment debt.
The basic law provides that a court of competent jurisdiction may make an Order varying, rescinding or suspending, prospectively or retroactively, on application of either or both former spouses.
For a court to make a variation order, the person seeking the change of child support - either an increase or a decrease - must show that there has been a material change in circumstances since the making of the existing order (as provided for in Child Support Guidelines).
An exception to this universal rule involves the Guidelines itself. Specifically, the introduction of the Guidelines in 1998 constitutes a material change in circumstances giving the right to either party to change a pre-Guideline Order.
Otherwise, any change in an existing Order requires the claimant to establish a material change in circumstances. Essentially, this involves a change in income, custodial arrangements, or cessation of dependency.
A variation in the order changes the child support enforcement as well. FRO may only collect the varied arrears. All enforcement actions must abide by the terms of the new varied order.
It is fundamental in any variation application that the person seeking the change of a child support order must establish what the situation was at the time the order was made. Therefore, financial statements and income details, including income tax returns and notices of assessment for both parties from the time the original order was made, are the starting point. Thereafter, the income tax returns and notices of assessment and supporting documentation proving the change (eg. severance or termination documentation regarding a job change or loss) must be gathered together as basic preparation for the variation application.
Variation of Ongoing Support and Arrears Based on Annual Income Changes
Historically, the Courts have permitted changes to arrears on a motion to change or motion to vary based on appropriate evidence. Each case is decided upon a consideration of a number of factors. Increasingly, a Support payor’s failure to prove compliance with annual income disclosure requirements has resulted in rejection of the request to change the arrears.
The Ontario Child Support Guidelines require parties to child support orders or agreements to exchange support information annually. Serious financial consequences may arise for those who fail to comply.
Section 24.1 of the Child Support Guidelines specify that the tax return for the most recent year, including any materials included in the return such as T4 slips and the Notice of Assessment or Reassessment from CRA MUST be supplied to the other party each year. There is no doubt that payors who do not comply with this requirement will be liable for retroactive child support based on annual income increases. Payor’s who experience an income reduction will not likely receive a retroactive arrears reduction on a motion to change if the annual income disclosure has not been provided.
Apart from these mandatory requirements in Ontario, most separation agreements contain clauses which require the parties to annually exchange tax information and special expense details.
The risk of ignoring this annual disclosure requirement can be financially devastating.
Retroactive Child Support
After the Child Support Guidelines were introduced there were numerous court decisions, many of which were conflicting, dealing with the issue of the right to claim retroactive child support based on the payor's annual increase in income since the making of the last child support order. In effect, the retroactive support question comes down to this: can a support payor be ordered to pay what in retrospect should have been paid annually?
The obligation to pay retroactive support has been clarified by the Supreme Court of Canada in the 2020 decision Michel v. Graydon 2020 SCC 24. The full decision should be reviewed:
Judicial decisions interpreting and applying Michel v. Graydon are just beginning to appear in the case reports as of the late winter of 2021.