NOTICE TO READER
The answer to each question below is a brief summary for informational purposes only and is only applicable in the Province of Ontario. It is not meant to be legal advice. If you require information or advice as it relates to your individual circumstances you are advised to consult with your own lawyer or retain the legal services of Veena Pohani.
How is Child Support Awarded?
Child support is awarded using the child support guidelines which were last updated in 2011. The guidelines are government enforced tables that tell us how much child support a payor has to pay based on the payor’s income for the previous year and the number of children the payor has.
Income has to be determined first before the child support guidelines can be used. A self employed payor will generally have a tougher time having his/her income accepted by the recipient due to the number of tax write offs the self employed payor will deduct against their income. Some deductions will be contested, and some are added back into the income. A self employed payor will argue their line 150 income on their previous year income tax return is the income to be used for the purpose of calculating child support.
A salaried employee’s income is easier to accept since they are institutionally employed and the income comes from one source which is the employer. The employer is legally required to complete a T-4 on behalf of the employee. There can be taxable and non taxable benefits an employee receives also. Taxable benefits are included in income such as gym memberships, housing, or a meal plan. Veena Pohani or her associates can help establish what are taxable and non taxable benefits.
When there are stock options, or RSU’s known as restricted stock units and they are cashed by an employee, this will get calculated as income as well unless they are being equalized as property.
Income can be averaged out using the last three years of income if a payor wants to establish that income was inordinately high one year due to a non recurring gain which was an anomaly. Of course this argument has to be pitched to a judge and accepted.
Once income is established which can be the toughest part of calculating child support, the payor simply reads his income on the child support guidelines in accordance with the number of children he has an obligation to support.
How do we determine the other parent’s income if he/she is self employed?
This can be a very contentious area of litigation protracting litigation depending on a number of factors. If the parents share custody, it can make it even more difficult. The courts will look at the support payors line 150 income on his/her income tax return from the previous year, while examining what is called the expenses deducted by the payor in order to determine if the expenses are reasonable. The expenses deducted are usually found in the statement of business activities, financial statements, corporate income tax returns, and any other relevant financial documentation to help convince the judge that the expenses are reasonable or are inflated.
There are certain tools that lawyers use in order to determine the support payor’s true income for support purposes.
We can obtain what is called an income analysis used by a professional called a Chartered Business Valuator.
We can serve Requests to Admit and Requests for Information which contain requests for admissions of facts, or documentation. If the recipient of the Request to Admit or Request for Information fails to provide a response then he/she will be deemed to admit all the facts contained in the forms. It is very important that the forms be answered.
We can conduct a Rule 20 questioning. This is where you question the suppport payor about his/her lifestyle, financial statement, and any other relevant questions about his employment income.
We can ask for a very exhaustive disclosure list of all the support payor’s income such as bank statements, credit card applications, loan and mortgage applications, income tax returns for the last three years, notices of assessments.
You can ask for an updated financial statement every 30 days.
Once we have determined income how do I know how much child support I should receive?
The Government has developed tables or guides that we use that give us an exact figure of what the child support should be in accordance with the support payor’s income. The monthly amount of child support is based on the income of the non-custodial parent, the number of children in the family and which province the children reside in. Tables are published that set out the amount that the non-custodial parent must pay to the custodial parent. The table amounts are for the children’s ordinary expenses such food, clothing and shelter. The custodial parent’s income becomes relevant where the children have special or extraordinary expenses such as daycare, extracurricular activities or private school tuition. In that case, the parents share these costs in proportion to their incomes.
Am I entitled to an increase in child support if the payor’s income has increased?
Yes. Support is dependant on the quantum of income earned from all sources including international income, business income, self reported income, investment income, and employment earnings. If there is an increase in a payor’s income for the previous year, than the recipient can apply to court for what is called a variation of support, or it can be done on consent if both parties agree to the support increase. The same format applies if there is a decrease in child support.