Child and Spousal Support

1. Child and Spousal Support In partnership with the Edmonton Public Library

2. Agenda • Introductions • How this evening’s presentation will proceed • Housekeeping – washroom locations • You have three things in front of you: • A copy of this PowerPoint • A resource sheet • A feedback form that we ask that you fill out before you leave tonight to help us improve these sessions.

3. Disclaimer The information presented during this session may have limited application to your particular situation.  The lawyers who are here this evening CAN provide legal information that may give you a greater understanding of how the law might apply to your own situation.  The lawyers who are here this evening CAN NOT provide you with individual legal advice.

4. Contents • Spousal Support • Introduction • Who can apply • The Law of Spousal Support • Advisory Guidelines • Miscellaneous Issues • Child Support • Federal Child Support Guidelines • Basic Questions

5. Contents • Basic Questions • Which children are entitled to support? • Parenting arrangements • “Guideline incomes” • Adjustments • Special expenses • Other Issues • Maintenance Enforcement Program • Child Support Recalculation Program • Retroactive Child Support • Applications

6. 1. Spousal and Adult Interdependent Partner Support

7. A. Introduction • Spousal support is determined using a very different set of considerations than child support. • Spousal support is highly discretionary and is sometimes more challenging to predict and/or negotiate.

8. B. Who is Able to Apply for Spousal Support? • Married spouses can apply for spousal support under the Divorce Act or the Family Law Act. • Unmarried individuals can only apply under the Family Law Act.

9. B. Who is Able to Apply for Spousal Support? • An unmarried person must qualify as an “adult interdependent partner”. • Designation based on the following factors : • is the relationship conjugal? • is it exclusive? • what are the household and living arrangements?

10. B. Who is Able to Apply for Spousal Support? Interdependence factors (cont.): • do people hold themselves out as a couple? • have they, in some way, formalized their relationship with each other? • is there financial interdependence? • care and support of children? • ownership, use and acquisitioned property together?

11. C. The Law of Spousal Support • In cases involving children, child support always takes priority. • We look at both factors (what does the court consider?) and objectives (what are we trying to achieve)

12. C. The Law of Spousal Support • Factors include: • how long have the parties inhabited a residence together? • what functions did they carry out when they lived together? • is there any order or agreement in place between them?

13. C. The Law of Spousal Support • Factors(cont.): • what are their means (income and other financial resources)? • what are their needs (what do they need to live on)? • what are their conditions (i.e. presence of children, health, special needs etc.)?

14. C. The Law of Spousal Support • Objectives are: • to address and economic advantage or disadvantage either party experienced as a result of the marriage or the separation; • to relieve economic hardship;

15. C. The Law of Spousal Support • Objectives are: • to deal with financial consequences of looking after children, over and above child support; • to promote economic self-sufficiency of each person within a reasonable period of time.

16. C. The Law of Spousal Support • Four basic steps: • Entitlement: Should a spouse receive support? • Form: How should it be paid? Periodic or lump-sum?

17. C. The Law of Spousal Support • Four basic steps: • How much? - What amount seems appropriate? • How long? – How long should payments be continued? • Indefinitely • Time limited • Subject to review • Other options

18. D. What are the Spousal Support Advisory Guidelines? • Only advisory. • They offer some guidance about what a range of amount and duration might look like. • With or without child support.

19. E. Miscellaneous Issues • The court is able to make “interim” as well as “final” awards. • Spousal support orders are enforceable through the Maintenance Enforcement Program.

20. E. Miscellaneous Issues • In certain cases the Courts will consider awards of retroactive spousal support • The law is varying a spousal support order is complex and not straight forward; this is where legal advice is usually needed.

21. 2. Child Support

22. Child Support • A child support application can be made by: • the child; • a parent of guardian; • someone who has control or care of the child; and • a few others.

23. Child Support • Almost always identical regardless of whether parents are married, unmarried, or have never lived together. • There are two acts that govern Child Support, the Divorce Act and the Family Law Act.

24. A. Federal Child Support Guidelines • The rules for calculating the amount one parent must pay to the other parent to help support their child or children. • Based on studies of average costs of raising children; each province has their own tables because of different tax rates and costs of living. • These guidelines are mandatory with certain areas of departure and deviation.

25. Structure of the Guidelines • FCSG set out some tables to show how much child support parents should pay. • Amounts are: • based on number of children; • driven solely by income of payor (the party paying the support); • not taxable or deductible; • “global” amounts.

27. Section 7, Special Expenses • Based on the idea that not every household is the same. • S. 7 is an attempt to customize child support based on the presence of additional expenses. • Normally, parents are expected to share these expenses equally.

28. B. Basic Questions In any child support case there are some basic questions that need to be answered: • Which children are entitled to child support? • What is the parenting arrangement? • What are the “guideline incomes” of the involved parents? • Are there any adjustments needed to move off the amounts listed in the FCSG tables? • Are there additional “special expenses” to be considered?

29. i. Which Children are Entitled to Child Support? • Children under the age of 18 who have not withdrawn from the charge of their parents. • Children over the age of 18 may be entitled if they meet certain conditions, outlined on the next slide.

30. i. Which Children are Entitled to Child Support? • Under the Family Law Act: • if they are between the ages of 18 and 22; and • if they are in a full-time course of education.

31. i. Which Children are Entitled to Child Support? Under the Divorce Act: • if disability or illness that prevents them from living without the aid of their parents; or • they are enrolled in post-secondary education

32. i. Which Children are Entitled to Child Support? Under the Divorce Act: • Parents can be obliged to pay child support if they have “stood in the place of a parent”. • Step-parent obligations are subject to discretion.

33. ii. What is the Parenting Arrangement? • The FCSG are based on a traditional parenting arrangement where one parent has primary care of the child and the other sees them weekends or mid-week.

34. ii. What is the Parenting Arrangement? • When a parent has more than 40% of the time with the child, the simple table calculations may not produce a fair result. • Under s. 9 of the FCSG, these inequalities can be reduced.

35. iii. What are the “Guideline Incomes” of the Parties? • Federal Child Support Guidelines use the gross incomes. • All sources of income in a tax return are used. • Start by looking at Line 150 of tax return.

36. iii. What are the “Guideline Incomes” of the Parties? • Income determinization is easy for T-4’ed employees and harder for self-employed individuals or individuals who are paid by corporations they own. • The 3 most recent returns are used and patterns in income are observed.

37. iii. What are the “Guideline Incomes” of the Parties? • Is the payor a shareholder of a company? • Possible to include all or part of “pre-tax” income of that corporation. • Must consider if the wages or fees are paid to “non-arms length” individuals.

38. iii. What are the “Guideline Incomes” of the Parties? • Is the payor a shareholder of a company? • Possible needs involve accountant to provide guidance on more complicated income determinization cases.

39. iii. What are the “Guideline Incomes” of the Parties? • Income can be “imputed” or attributed to someone when: • they are intentionally unemployed or underemployed; • they aren’t taxed on their income; • income and been diverted;

40. iii. What are the “Guideline Incomes” of the Parties? • Imputed income (cont.): • they haven’t disclosed financial information when they were supposed to; • they are unreasonably deducting expenses from business income; or • other circumstances.

41. iv. Are there Adjustments Needed to Move off the Table Amounts? • Adjustments might need to be made if: • s. 9 applies, • a person is “standing in place of a parent”, • the income is over $150,000, • undue hardship, or • adult children.

42. v. Are the Additional Special Expenses to be Considered? • Important to remember that not every household with children is the same. • S. 7 is discretionary – necessity of expense in relation to child’s best interests, and “reasonableness” of the expense.

43. v. Are the Additional Special Expenses to be Considered? • S. 7 (special) expenses include: • after tax cost of child care needed for parent’s employment or schooling, • children’s portion of premiums for medical/dental insurance coverage, • the uninsured portion of health care costs (dental, medical, orthodontic, optometric, etc.)

44. v. Are the Additional Special Expenses to be Considered? • S. 7 (special) expenses (cont.): • extraordinary cost of primary or secondary school (e.g. some tutoring, some private schooling, etc.). • Expenses for post-secondary education. • Extraordinary expenses for extra-curricular expense.

45. C. Other Issues • Maintenance Enforcement Program • Child Support Recalculation Program • Retroactive Child Support • What is involved in making an application in Court for child support?

46. i. Maintenance Enforcement Program • A voluntary program to collect child support. • They only enforce court orders, not written agreements.

47. i. Maintenance Enforcement Program • If payments made privately are on time may be best to opt out. • But if payments are late, or causing strife, register.

48. ii. Child Support Recalculation Program • Administrative service to help parents recalculate child support based on current tax information. • Not useful for self-employed or complex income determinizations.

49. ii. Child Support Recalculation Program • Parents must have valid court order (or binding agreement). • Modest cost.

50. iii. Retroactive Child Support • The Supreme Court of Canada indicated that 4 things have to be considered: • Is there a reasonable excuse for what a recipient didn’t seek and order for child support earlier? • Has there been any “blameworthy conduct” on the part of the payor?