Mediate BC Launches Program Addressing Support for Adult Children

Mediate BC has announced the launch of a new pilot project — the Child Support Eligibility Mediation Project — intended to address the often contentious issue of child support in respect of children who have reached or are approaching the age of majority. According to the society's statement, the aim of the program is to "help separated families resolve disputes concerning the eligibility of adult children for child support and special expenses" by creating an educational plan with the assistance of a mediator.

The service free and is available to separated parents whose children are either in Grade Twelve or are nineteen and older and enrolled in a post-secondary program.

The Child Support Eligibility Mediation Project is being carried out in collaboration with the Family Maintenance Enforcement Program and is funded by the Law Foundation of British Columbia and the Director of Maintenance Enforcement.

Claims for Retroactive Child Support and Spousal Support

Speaking of the recently concluded National Family Law Program (see the post below), I was fortunate enough to be asked to present a paper at the conference reviewing the case law on retroactive child support and spousal support. Since my paper is too dull to hold any reasonable person's attention for more than twenty seconds, I'll just give you the Coles Notes version.

The two really important cases on this subject are D.B.S. v. S.R.G., a 2006 decision of the Supreme Court of Canada on retroactive child support, and Kerr v. Baranow, a 2011 decision of the court which addresses retroactive spousal support. A "retroactive" order is an order that has a start date before the date the order is made, like an order made in July for child support payments beginning in March.

The key points of the court's analysis in D.B.S. are these:

• An obligation to pay child support exists independent of any order or agreement on child support.
• The amount of child support is determined by the Child Support Guidelines. The Guidelines base the amount of support owing on the income of the payor. 
• The payor's child support obligation is the amount payable based on the payor's income and the Guidelines, but changes as the payor's income fluctuates.
• An order or agreement may correctly state the amount of child support payable when the order or agreement is made, but if the payor's income changes the order or agreement stop being correct.
• When an order or agreement is no longer correct, a court can make an order requiring the payor to make up the difference between the amount of child support that was paid and the amount that should have been paid.

D.B.S. then says that four factors should be taken into account when a court is asked to make a retroactive order:

1. the reasons for the recipient's delay in asking for an order updating the amount of child support;
2. any misconduct on the part of the payor, such as hiding income, lying about income or pressuring the recipient not to ask for more support;
3. any hardship suffered by the children as a result of the payor's short support payments; and,
4. any hardship that the payor might suffer if forced to pay a retroactive child support order.

Courts should consider these factors and the facts of each case in a "holistic" manner.

When a court is prepared to make a retroactive child support order, the start date of the order should be the date the recipient let the payor know that child support needed to be updated, to a maximum of three years from the date of the recipient's application to court. However, if the payor has engaged in misconduct of some sort, then the start date can be as long ago as the date when the payor's income changed.

In Kerr, the court held that these same considerations also apply to claims for retroactive spousal support, with two modifications. First, the reasons for the recipient's delay are more important in claims for spousal support than in claims for child support. Second, the sort of misconduct that is relevant is misconduct relating to the support application itself.

After reviewing how Canada's courts of appeal have treated D.B.S. and Kerr, it seemed to me that orders and agreements for child support no longer offer blanket security against claims made in respect of the period covered by the order or agreement. Payors of spousal support are somewhat better off, subject to the propriety of their behaviour and the adequacy of their disclosure, but the period elapsing between separation and the first payment of support seems to be fair game. It also occurred to me that the issue of misconduct has become the dominant factor in deciding claims for retroactive support orders, despite the court's caution that it is only one of the four factors to take into account and that none of the factors are predominant.

At the end of the day, I concluded that the only reasonable court of action for people paying support, child support in particular, is to make voluntary disclosure of any changes in income and to update the amount of child support being paid whether the recipient asks for the change or not.

Managed Financial Disclosure Service Launched

I've spent the last few days at the Federation of Law Societies of Canada's fantastic national Family Law Program where I learned of a nifty new service designed to facilitate document disclosure where child support is paid.

In Ontario, I understand, recent legislative amendments have made the annual disclosure of certain financial documents — tax returns, notice of assessment, pay stubs and so forth — mandatory where there is an order for child support. (The point of this is to give everyone the information they need to keep the amount of child support up to date, as well as the parties' shares of the children's special expenses.) This same obligation exists in British Columbia and all other provinces as a result of s. 21 of the Child Support Guidelines, which gives the recipient of support, and sometimes the payor, the right to demand the production of certain documents not more than once per year, but the obligation only arises when the demand is made unless an order or agreement makes annual disclosure mandatory. (The agreements I draft normally include an automatic disclosure provision to protect both parties against arrears building up.)

Given the new regulatory climate in Ontario, the new service, Support Information eXchange, run by Ontario lawyer Michael Marra and found at www.yoursix.ca, makes a certain amount of sense. As understand it, the service acts as an online repository where the parties can post and print their financial documents over the life of the child support order. The service will send an alert by email when new documents are posted and keeps a record of when the documents were posted. The cost is $50 per year.

Tax Court Rules on Deductibility of Legal Fees to Claim or Enforce Support

Ron Hooge, a respected Vancouver chartered accountant and business valuator with SmytheRatcliffe, has distributed a commentary on a recent Tax Court case, Sarophim v. Her Majesty the Queen, concerning the tax deductibility of legal fees incurred in relation to support payments to be made following separation.

The basic rule, as I had understood it, is that legal fees incurred to obtain or enforce a spousal or child support entitlement are tax deductible whereas legal fees incurred to defend a support claim are not. The taxpayer in Sarophim argued that this distinction was unconstitutional.

As Ron says in his commentary, the taxpayer lost:

"The Court found that it is now settled law that legal fees incurred by the payer of support (for example, to establish or increase, or decrease or terminate it) cannot be considered to have incurred for the purpose of earning income, and therefore not deductible. The Court referenced Interpretation Bulletin, IT-99R5, paragraph 21. 

"Except where there is a specific provision in the [Income Tax Act] dealing with legal or accounting fees, legal and accounting fees are deductible only to the extent that they 

a) are incurred for the purpose of gaining or producing income from business or property, and 

b) are not outlays of a capital nature."

Ron then quotes paragraphs 17 to 21 of the Interpretation Bulletin, which are indeed worth the effort to read if you can make it through the heavy legal prose. What the Interpretation Bulletin says is this:

1. Legal fees incurred to establish a right to spousal support are not deductible.
2. Legal fees incurred to establish a right to child support are deductible.
3. Legal fees incurred to obtain an increase in the amount of child support or spousal support paid are not deductible.
4. Legal fees incurred to enforce a right to child support or spousal support established in an order or agreement are deductible.

My thanks to Ron for his commentary and to Megan Ellis, QC for bringing it to my attention. My extra thanks to Kathleen Packard for helping me find and correct an error in this post.

New Legislation Will End Limitation Period for Claims on Arrears of Support

The provincial government today introduced new legislation to replace the Limitation Act. The proposed legislation, Bill 34, will tidy up a lot of the complexities of the current act and, along the way, repeal the limitation period presently governing actions for the enforcement of arrears of child support and spousal support.

Under ss. 3(1) and 46 of the new legislation, no limitation will apply to claims for arrears accumulating under a court order, or under an agreement filed in court pursuant to ss. 121 or 122 of the Family Relations Act or ss. 148 or 163 of the Family Law Act; once arrears have accumulated, they can always be enforced. Payors beware!

Appeal Heard on Unsual Stepparent Child Support Decision

In July 2011 the British Columbia Provincial Court released a very odd judgment on steppparents' liability to pay child support in a case called K.A.L. v. J.P.R. To be clear, it wasn't the court's decision that was odd but the circumstances in which the action was brought.

K.A.L. was followed up a few months later in September with an unreported Provincial Court judgment rendered in an almost identical situation involving parties surnamed Faint, McFayden and Godin. The Supreme Court has just released its decision in the appeal of the unreported case, a decision that might just resolve any appeal brought from K.A.L. as well.

Background

As I pointed out in my post on K.A.L., "Stepparent Caught by Hole in Family Relations Act," the current legislation on family law matters in this province contains one very significant omission:

"The Family Relations Act, British Columbia's primary law on domestic relations, is missing something very important: a triggering event for applications involving custody, guardianship, access, child support and spousal support. Nothing in the law restricts how soon an application on these issues can be made; in particular, nothing says that an application can't be brought while a couple are still together."

The surprising conclusion this led to in both K.A.L. and the unreported case was that a stepparent in an intact relationship with a biological parent was successfully sued for child support by the other biological parent. Both judges found that once the hapless steppparent met the statutory definition of steppparent, he became liable to pay child support to the parent with the primary care of the child, even though still in a relationship with the child's other parent.

K.A.L. came as a bit of a shock to many family law lawyers, yet was well within the plain reading of the Family Relations Act:

1. Each parent of a child is responsible to support a child. (FRA, s. 88(1))
2. The fact that one parent is ordered to pay child support support doesn't stop the other parent from being ordered to pay child support. (FRA, s. 88(2))
3. "Parent" includes biological parents and steppparents, as long as the stepparent has contributed to the support of the child. (FRA, s. 1(1))
4. A "stepparent" is someone who is married to a parent or someone who is in a common-law relationship with a parent (FRA, s. 1(2))

And that's all there is to it. It just took the enterprising parents in K.A.L. and the unreported case to notice it.

The Appeal Decision

In McFayden v. Faint, Ms. McFayden and her husband Mr. Godin appealed the Provincial Court order requiring Mr. Godin, the stepparent of Ms. McFayden's child, to pay child support to Mr. Faint, the child's other parent and the parent with primary care of the child. Cutting to the chase, the Supreme Court upheld the lower court order and gave Mr. Faint his costs to boot.

Here is how the Supreme Court analyzed the situation, and I can do no better than quote from the judgment:

"[16] Section 88 of the FRA describes the obligation of a parent to provide for the support of the child, stating:

(1) Each parent of a child is responsible and liable for the reasonable and necessary support and maintenance of the child.

(2) The making of an order against one parent for the maintenance and support of a child does not affect the liability of another parent for the maintenance and support of the child or bar the making of an order against the other parent.

"[17] Section 1 of the FRA defines 'parent' as including:

(b) a stepparent of a child if

(i) the stepparent contributed to the support and maintenance of the child for at least one year, and

(ii) the proceeding under this Act by or against the stepparent is commenced within one year after the date the stepparent last contributed to the support and maintenance of the child;

"[18] Section 1(2) of the FRA defines 'stepparent' as follows:

(2) For the purpose of paragraph (b) of the definition of 'parent' in subsection (1), a person is the stepparent of a child if the person and a parent of the child

(a) are or were married, or

(b) lived together in a marriage-like relationship for a period of at least 2 years and, for the purposes of this Act, the marriage-like relationship may be between persons of the same gender.

"[19] The Guidelines created by the federal government were adopted for use in B.C.’s FRA through the CSG. The latter defines how the Guidelines and the FRA are to work together.

"[20] Section 1 of the Guidelines sets out its objectives which includes:

(a) to establish a fair standard of support for children that ensures that they continue to benefit from the financial means of both parents after separation. [Emphasis added]

"[21] Mr. Godin submits that s. 1(a) of the Guidelines should be interpreted as being applicable to a stepparent only if he or she is separated from the biological parent. Since he is still married and living with Ms. McFayden he asserts that he is not obligated to pay such child support.

"[22] Mr. Godin acknowledges that he falls within the definition of parent as found in s. (1) and 1(2) of the FRA which leads to the question of whether s. 1(a) of the Guidelines should be interpreted as obliging a stepparent to pay child support as sought by Mr. Faint only if the stepparent is separated from the biological parent.

"[23] In K.A.L., Judge Dickey succinctly addresses the interpretation and application of s. 1(a) of the Guidelines where the stepparent is not separated from the biological parent of the child, stating at para. 18 of his reasons:

[18] In analyzing the issue of whether the 'Objectives' of the Guidelines should guide the interpretation of the FRA, it must be remembered that this is an application under the FRA and not under the Divorce Act and Guidelines. The Divorce Act and Guidelines apply to persons who are, or were, married to each other. The FRA is much broader in scope in that it applies to persons married to one another, persons in a marriage-like relationship, and stepparents. The 'Objectives' of the Guidelines relate to the more restrictive Divorce Act. The Regulation broadens the scope of the Guidelines by adopting them, and then expanding their application by broadening the definitions; see s. 1(3)(h) of the Regulation, in which reference to 'spouse' in the Guidelines is to be read as a reference to 'parent' as defined in the FRA, except for s. 5, in which it is to be read as a reference to 'person'. I also find that the 'children first perspective' of the Guidelines should be used as an interpretation guide to broaden and not narrow the obligation to provide child support, unless the obligation is clearly limited. I find, therefore, that the restrictive nature of the 'Objectives' of the Guidelines does not limit the child support obligations as found in the FRA.

"[24] The approach taken by Judge Dickey in K.A.L. is consistent with that found in Adler v. Jonas, a case involving a stepparent’s obligation to pay child support to his wife’s child. Mr. Justice Hardinge wrote at para. 20:

... I think it appropriate to note here that the provisions of the Family Relations Act should be given a liberal interpretation wherever its provisions relate to children. In Prichard v. Prichard, Spencer J. of this court said at paragraph 6:

The Act as a whole should be given an interpretation consistent with its objective of regulating the affairs of families in the broad sense. Where it deals with children it should be construed liberally in their favour to provide for their 'reasonable support'.

"[25] I concur with the liberal interpretation adopted by Judge Dickey in K.A.L. and affirmed by Judge Donegan in Faint when he concluded that Mr. Godin had a legislated obligation to pay child support for [the child], and that it was not relevant that Mr. Godin and Ms. McFayden were still married and living together."

In other words, the analysis in K.A.L. was bang on and accurately interpreted the more liberal provisions of the Family Relations Act as appropriately capturing stepparents in ongoing relationships with the parent of a child.

New Child Support Tables in Effect

Brand new child support tables came into effect today, just in time for the new year. As discussed in my post "New Child Support Tables for 2012," the new numbers aren't terribly different than the old and lots of payors will see their child support obligations actually decrease.

The new tables are available in the version of the Child Support Guidelines presently published by the Department of Justice. You can also use the Department's nifty child support calculator based on the new tables.

You can read the notice from the Department of Justice on the new tables; the regulation enacting the new tables is available from Canada Gazette website, and the tables for British Columbia can be found here.

New Child Support Tables for 2012

The federal Department of Justice has announced new child support tables for the Child Support Guidelines which will take effect on 31 December 2011. The tables were last updated in 2006.

According to the Department's notice, the same formulas were used to determine the new amounts as were used in 2006, and any changes in the new tables are the result of changes in federal and provincial tax rules.

The changes are relatively minor. Some payors with incomes below $50,000 per year may see their child support obligations decrease:

$25,000 income
one child = $213 per month ($230 under 2006 tables)
three children = $533 per month ($525 under 2006 tables)
six children = $680 per month ($751 under 2006 tables)

$50,000 income
one child = $458 per month ($465 under 2006 tables)
three children = $998 per month ($994 under 2006 tables)
six children = $1496 per month ($1482 under 2006 tables)

Most payors, however, will see their child support obligations increase:

$75,000 income
one child = $701 per month ($698 under 2006 tables)
three children = $1483 per month ($1459 under 2006 tables)
six children = $2205 per month ($2162 under 2006 tables)

$100,000 income
one child = $921 per month ($906 under 2006 tables)
three children = $1923 per month ($1875 under 2006 tables)
six children = $2848 per month ($2770 under 2006 tables)

The Department has also published a great child support calculator for the new tables. Note that the old tables will remain in force until the new tables take effect at the end of December.

Court of Appeal Releases Decision on Child Support Liability of New Parent to First Family

The Court of Appeal has just released an interesting decision on a payor's application to suspend her child support obligation to her first family as a result of being on maternity leave for a new child in her second family. (As you might imagine, it is usually men who are the payors of child support and the situation before the court in McCaffrey v. Paleolog requires the happy coincidence of a mother paying child support while becoming pregnant in a new relationship.) The appeal in this case was complicated by legal issues concerning the history of the proceedings, but the reasons from the Court of Appeal are clear enough that we can focus on the law that will be of more general interest.

When a mother paying child support takes maternity leave as a result of a pregnancy in a new relationship, she will usually want relief from the child support obligation to her first family for at least the period she is in receipt of reduced income from maternity benefits. This raises three critical questions for the recipient.

• Is the pregnancy a "material change in circumstances" justifying the payor's application to vary her child support obligation?
  
• If child support will be reassessed, should income be imputed to the mother under s. 19(1)(a) of the Child Support Guidelines on the basis that she is underemployed while on her reduced income?
• To what extent should the first family suffer as a result of the payor's choices in a subsequent relationship?
  

Normally, the courts would leap to impute income to a payor who decided to take a year off work or voluntarily took a position with lower pay. In cases like this, however, there is arguably some necessity to the payor's choice, and the answer to these questions lies in the case law interpreting s. 19(1)(a) of the Guidelines.

This is what that subsection says (I've put the important part in italics):

19. (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:

(a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;

And this is what the Court of Appeal said (you should read the case yourself for the background to the court's analysis):

Imputing Income

Income may be imputed to a parent who is intentionally underemployed unless the parent establishes under s. 19(1)(a) of the Guidelines that the needs of the new child require her to remain at home.

Exception for Children Under the Age of Majority

Having a newborn child or a child of very young age will generally suffice to meet the Guidelines requirement, however "childbirth does not provide an automatic relief from a parent’s child support obligations," and the circumstances of the payor must be examined to determine eligibility in each case.

Guidelines for Imputing Income

The circumstances of the payor should be evaluated using the following factors, which the Court of Appeal, in a 2004 case called Watts v. Willie, borrowed from a 2000 case from the Manitoba Court of Appeal, Donovan v. Donovan:

"1. There is a duty to seek employment in a case where a parent is healthy and there is no reason why the parent cannot work. It is 'no answer for a person liable to support a child to say he is unemployed and does not intend to seek work or that his potential to earn income is an irrelevant factor' ...

"2. When imputing income on the basis of intentional under-employment, a court must consider what is reasonable under the circumstances. The age, education, experience, skills and health of the parent are factors to be considered in addition to such matters as availability of work, freedom to relocate and other obligations.

"3. A parent’s limited work experience and job skills do not justify a failure to pursue employment that does not require significant skills, or employment in which the necessary skills can be learned on the job. While this may mean that job availability will be at the lower end of the wage scale, courts have never sanctioned the refusal of a parent to take reasonable steps to support his or her children simply because the parent cannot obtain interesting or highly paid employment.

"4. Persistence in unremunerative employment may entitle the court to impute income.

"5. A parent cannot be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations.

"6. As a general rule, a parent cannot avoid child support obligations by a self-induced reduction of income."

Limit to Relief from Child Support

Where a payor is found to be entitled to the exception for a newborn or very young child, any suspension of her child support obligation must be only for a reasonable period of time, bearing in mind:

1. the financial situation of the payor's present family, since it is the needs of that child which support the s. 19(1)(a) exception, and
   
2. the financial situation of the first family, where the non-payment of support has a particularly harsh effect.

"The circumstances may compel an almost immediate return to work or may provide for full or part-time in-home assistance."

Summary

I can do no better than the court's own summary of its reasoning, found at paragraph 58 of the decision.

"In summary in a case like this:

"1. income may be imputed to a parent who is intentionally under-employed or unemployed unless the parent establishes under s. 19(1)(a) of the Federal Child Support Guidelines that the needs of a child require the parent to remain at home;

"2. it is recognized that generally a newborn child or a child of very young age is a child who needs care at home in the context of s. 19(1)(a), but

"3. childbirth does not provide an automatic relief from a parent’s child support obligations;

"4. the circumstances of each situation must be evaluated using all of the criteria articulated in Donovan v. Donovan ... ;

"5. any period of non-support must be reasonable in the circumstances."

Stepparent Caught by Hole in Family Relations Act

Important Update: The Family Law Act was introduced on 14 November 2011 and contains a number of provisions which are critical to the comments made in this post. See my post "Family Law Act Introduced!" for more information.

The Family Relations Act, British Columbia's primary law on domestic relations, is missing something very important: a triggering event for applications involving custody, guardianship, access, child support and spousal support. Nothing in the law restricts how soon an application on these issues can be made; in particular, nothing says that an application can't be brought while a couple are still together.

This isn't usually a problem, of course, since people are usually pretty annoyed when they decide to sue one another, and if they haven't split up by the time litigation commences, the commencement of litigation will usually do it. However, there can be odd consequences when other people, like grandparents or former spouses, step into the picture, since nothing says when they can and can't make applications of their own. (I made some comments about this during the consultation phase of the Family Relations Act Review, and there's a chance that the new legislation will correct this issue.) The legislative chickens came home to roost for one stepfather after an application by the child's biological father in a case recently before the Provincial Court and brought to my attention by my friend Agnes Huang of Schuman Daltrop Basran Robin.

In K.A.L. v J.P.R., the biological father brought an application for an order that the mother's new spouse - his child's stepfather - pay child support. So far this is fine, since stepparents are also liable to pay child support. The catch, though, is that the stepfather and the child's mother were together when the father brought his application!

The judge made a very thorough review of the Family Relations Act and the Child Support Guidelines for the following basic principles:

1. Each parent of a child is responsible to support a child. (FRA, s. 88(1))
2. The fact that one parent is ordered to pay child support support doesn't stop the other parent from being ordered to pay child support. (FRA, s. 88(2))
3. "Parent" includes biological parents and steppparents, as long as the stepparent has contributed to the support of the child. (FRA, s. 1(1))
   
4. A "stepparent" is someone who is married to a parent or someone who is in a common-law relationship with a parent (FRA, s. 1(2))
5. Child support orders are to be made using the Child Support Guidelines tables. (FRA, s. 93(1))
6. Child support orders can be made in a different amount than the Guidelines tables, but only when there is an order or written agreement that provides a benefit to the child in some way and it would be unfair to apply the Guidelines tables. (FRA, s. 93(2))
7. Child support orders against stepparents can also be made in a different amount than the Guidelines tables as a result of "any other parent's legal duty to support the child." (CSG, s. 5)
   

And there you have it. Parents are liable to pay child support, stepparents are liable to pay child support for the benefit of a child, more than one "parent" can be required to pay child support at the same time, and nothing says when an application can and can't be made or restricts when a parent can bring the application. As a result:

"I, therefore, find that when one reads the legislated scheme for child support as a whole, and give the wording its 'grammatical and ordinary sense', a stepparent who satisfies the definition of 'parent' and lives with the parent of a child, is still obligated to make child support payments. This obligation occurs despite the fact that the parent of the child is also obligated to make child support payments."

"The [father] is entitled to bring a claim against the respondent stepfather for child support pursuant to s. 5 of the Guidelines."

Now, the judge didn't make an order against the stepfather at this point, and nor did the judge comment on who might be the recipient of the child support order. That will be the subject of a future application, and I expect that some interesting arguments will be advanced. I also wonder whether, some time before that application, the mother and the stepfather will enter into a written agreement under which the stepfather provide sufficient indirect benefits to the child that his child support obligation will be exhausted.

Court of Appeal Releases Decision on the Cancellation of Arrears of Child Support and Special Expenses

The Court of Appeal has just released its decision in Semancik v. Saunders, a helpful case which reviews and summarizes the law on many common issues relating to applications to cancel arrears of child support and the payment of children's special expenses. Here are the highlights of the court's review of the law:

• Under s. 96 of the Family Relations Act, the court may only reduce arrears of child support if it would be "grossly unfair" not to do so.
• A 1999 decision of the Supreme Court called Earle v. Earle held that this requires an applicant to prove (1) a significant and long lasting change in circumstances, and (2) that it would be grossly unfair not to cancel the arrears. Arrears will usually only be cancelled if the applicant proves that he or she is unable to pay “now and in the future.”
• The principles given by the Supreme Court of Canada in D.B.S. v. S.R.G. on orders involving retroactive child support under the Divorce Act also apply to retroactive child support orders under the provincial Family Relations Act.
• The D.B.S. principles also apply to orders involving retroactive payment for children's special expenses.
  
• There is, however, an important distinction between orders for child support and orders for special expenses. "In the case of child support, the payor parent’s income is determinative. That parent knows what his or her income is and can determine the amount of the child support obligation from the [Child Support] Guidelines. In the case of [special] expenses, it is the recipient parent who knows the details of the expenses. If that parent does not communicate that information to the payor parent, the payor parent cannot fulfill his or her legal obligation to contribute."
  
• Adult children should be required to make a reasonable contribution to the costs of their post-secondary education when those costs are claimed as a special expense. A "reasonable contribution" does not mean that an adult child should be expected to cover the cost entirely or to contribute all of his or her income to these costs.

Separated with Children Financial Workshop

The Justice Education Society is hosting two workshops in the new year to help parents deal with the legal, emotional, social and financial turmoil of separation. The workshops will deal with:

• becoming financially independent
• dealing with your ex and children about money
• budgeting and debt issues
• child support, spousal support and property divisions issues

The workshops are free. You just need to register ahead of time. Call the society at 604-775-0856 in the lower mainland or at 1-800-775-0856 from elsewhere.

Vancouver
Monday 21 February 2011, 6:30 to 9:30 pm

Port Coquitlam
Wednesday 23 March 2011, 6:00 to 9:00pm

Child Support and the Income of Payors

G.H. from Vancouver sent me an email with a question that has an interesting answer:

"I understand the application of the child support guidelines and these have been built into my divorce order. I do not, however, understand the logic of having the formula based only on the payor income and number of children, and not the payee's income. ... My ex and I make about the same income, we split assets [and] we have joint custody ... yet her income is irrelevant to the size of my payment. I just can't see the logic of that and in situations like ours, it seems extremely inequitable."

To understand where the Child Support Guidelines are coming from, you have to understand how child support was calculated before the Guidelines came into force in 1997.

Before the Guidelines, the amount of child support paid was based on the children's needs, the amount of money necessary to meet their basic living expenses, and on the parents' means, the amount of disposable income available to the parents to meet those needs. This resulted in a budgeting exercise that was often expensive, always acrimonious and sometimes capricious.

The Child Support Guidelines were intended to address these problems, and they say as much at s. 1:

The objectives of these Guidelines are:

(a) 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;

(b) to reduce conflict and tension between spouses by making the calculation of child support orders more objective;

(c) 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; and

(d) to ensure consistent treatment of spouses and children who are in similar circumstances.

The Guidelines try to achieve these goals by establishing a scheme for the determination of child support which is mandatory throughout Canada. Most importantly, the Guidelines set out a series of tables for each province which say how much support should be paid based on only two factors: the number of children support is being paid for, and the income of the person paying support.

The choice of these factors and the amounts in the child support tables are, to some extent, arbitrary. Certainly other factors could have been picked and different figures chosen; the Guidelines could equally have determined support using a some sort of calculation rather than tables. It isn't particularly obvious to me, however, that any other arrangement would be better than what we wound up with.

Basing the amount of child support on figures set out in tables stops people from engaging in bitter and costly debates about need and means. The tables amounts are presumed to be a complete indemnification of the payor's obligation, and in addition to preventing arguments about that, they prevent arguments about how the recipient has chosen to spend the support received. Indexing the tables to the payor's income means that only one person's income needs to be analyzed and eliminates arguments about the adequacy of the recipient's contributions to the costs of the children's upkeep.

Whether these are good and appropriate objects and values is a better subject for politicians and social policy theorists. The end result, I think, has been a fairer, more predictable and less expensive means of determining child support for most, but certainly not all, parents, and I would be just as happy with any other system of child support which achieved the same effect.

In fairness, there are occasions when the rigid application of the Guidelines works an injustice and relief is available to remedy that in the "undue hardship" provisions of s. 10 of the Guidelines. As well, there are a number of circumstances in which the recipient's income is a factor applied in the calculation of support, including where:

1. the parents have "shared custody" as defined by s. 9;
2. custody of the children is "split," under s. 8;
3. the child is over the age of majority, under s. 3(2)(b);
   
4. the payor's income is over $150,000 per year, under s. 4; and,
5. the parents are required to the child's special expenses pursuant to s. 7.

At the end of the day, the arbitrariness of the Guidelines seems to me to work well for most of the people most of the time, although it's entirely possible that another system would work better. The Department of Justice likely has some of the background and research papers for the Guidelines available, and there will be Hansard transcripts for any Parliament discussions on the subject.

BC Supreme Court Issues Important Judgment

Varga v. Varga, 2009 BCSC 416 concerns, among other things, the determination of a husband's obligation to pay child support for two children of his wife's previous relationship and child support for a child of their own relationship when custody of that child was shared.

This case involves two tricky questions about child support: how child support should be calculated when custody is shared; and, how a step-parent's child support should be calculated when someone else also has a responsibility to pay child support. Normally, child support is calculated simply by referring to the Child Support Guidelines tables and looking up the amount payable at the payor's level of income. The issues in Varga involve two exceptions to this general rule which allow the court to pick an amount of child support different than what the Guidelines tables require...

1) Under s. 5 of the Guidelines, the court can order a step-parent to pay a different amount of support if there is someone else, like another biological parent, who also has a responsibility to pay for the kids. As long as the other parent is actually paying child support, the court will usually treat the step-parent's obligation as a kind of "top up" to the biological parent's obligation, and the step-parent is rarely required to pay the full table amount of child support.

2) Under s. 9 of the Guidelines, the court can order a parent to pay a different amount of support if the parents share the children's time equally or near-equally. Although there are different ways of calculating how much child support should be paid, in general the court will make the payor pay the full table amount minus the full table amount the recipient would pay; this is called the "set off" approach.

In Varga, the court decided that the set off approach for the one child of the parties' relationship wouldn't do because it would result in too great a difference in the standard of living in the child's two homes, and too great a decline from the standard of living the child enjoyed when the parties' were still together. The court ordered the husband to child support of $650 per month, a bit less than the husband's child support table obligation of $755 and a lot more than the set off amount of $376.

With respect to the other two children, the court described the task required by s. 5 of the Guidelines: the court must consider the legal duties of the biological parent and quantify the amount of support the parent should pay, and the amount of the biological parent's child support obligation should presumptively be the full amount owing under the child support tables. The problem, however, was that the child had left the wife to live full time with the father about a year and a half after the husband and wife separated. The court decided that the husband would have no child support obligation from the date the child began to live with the father, however, he would hate to pay arrears of child support accumulating between the date of separation and the date the child went to live with the father.

New Random Answers to Random Search Terms

I am able to review the search terms that lead people to my website. Every now and then, a search term is particularly unusual or suggests an answer that doesn't, and perhaps shouldn't, appear in the website. In this irregular feature, I will randomly reply to these search terms. New Random Answers will reappear at unpredictable intervals.

(Remember, the law that's being applied here is the law of British Columbia, Canada, and the laws of one jurisdiction are often very different from the laws of the next.)

>> paying for university after separation

>> child support college special expenses

>> do I still pay child support if the child is at university in another town

These questions all deal with one of the more difficult issues in family law, the payment of child support and special expenses for adult children who are studying at university or college.

The law behind this issue is simple. The Divorce Act and the Family Relations Act say that child support is payable for all kids under the age of majority, and for kids older than the age of majority of they are "unable to withdraw from the charge" of their parents. "Unable to withdraw" usually means that the child is unable to support him- or herself because of illness or disability, or because the child is engaged in post-secondary studies.

On top of the base payment of child support, parents are often also required to pay towards the cost of the children's "special and/or extraordinary expenses." Where an expense qualifies as a special expense under s. 7 of the Child Support Guidelines, both parents must contribute to paying the expense, and they contribute in proportion to their incomes. University and college costs almost always qualify as a special expense.

Here's where it can get a bit complicated.

Child Support

Normally, the table amount of child support is what gets paid for the support of an adult child.

Despite this, the court has the discretion to order that a different amount of child support should be paid, under s. 3(2)(b) of the Child Support Guidelines, if there is some objective reason why a different amount should be paid. In Hickman v. Hickman (2003 BCSC 116), the court talked about this issue at length and said that good objective reasons might include income from things like RESPs, scholarships, student loans, trust funds or inheritances, or disability payments. Whether the court will allow an exception to the tables will always depend on the circumstances of the case.

The person who receives the child support payments is usually the same person who has received them all along, the other parent. This can sometimes seem unfair, especially when the child is going to school in another city and lives in that city.

It is possible for a parent to pay child support directly to an adult child. This usally happens where the parents agree such an arrangement is appropriate; the court rarely makes orders to this effect. In general, the court will require that child support be paid to a parent as long as that parent maintains a room in his or her home for the child and the child stays there from time to time during school holidays.

Special Expenses

There are two conflicting lines of cases on the circumstances in which parents must pay the costs of post-secondary education and which costs the parents must cover.

The strict line of cases say this: post-secondary expenses should only be paid if the child is enrolled in a full-time course of study, and even then the course of study must be targetted to employment (unlike philosophy, for example my undergraduate focus).

The less uptight line of cases make post-secondary expenses payable whenever the child is enrolled in post-secondary studies, regardless of what the child is studying. Under these cases, children can drop out and return to school, or take a part-time course load or switch majors every year, and still have their expenses covered.

The costs that qualify as special expenses under the strict line of cases are limited to tuition fees, student fees and textbook costs. Other expenses may qualify under the less uptight line of cases, including for things such as residence, meal plans and the like.

The amount of the special expenses which the parents must contribute to is the net cost of these expenses, after all contributions from other sources have been applied to reduce the over all cost, such as student loans, scholarships, bursaries, fellowships, awards, grants and the like. Under the strict line of cases, children have been required to contribute earnings from their summer employment to these costs, obtain student loans, and provide proof that all available scholarships and grants have been applied for.

Additional information about child support and children's expenses, including a child support calculator and a special expenses calculator, can be found at www.bcfamilylawresource.com.

2008 In Review, Part 3: Case Law Roundup

This is an overview of some of the more interesting cases decided in 2008. The summaries below aren't a proper digest of each case, they just focus on the one or two issues which made the case interesting.

H(SM) v. P(R), 2008 BCSC

This case is a nice update on the law of retroactive child support. The wife sought a retroactive order going back to 2002 based on undisclosed increases in the husband's income. The court said that the simple payment of child support, which the husband had been doing all along, creates a presumption that the payor had discharged his duty. Given the wife's delay in bringing her application and the absence of any evidence that the child had suffered, the court only made an order with retroactive effect commencing mid-2007, the date when the parties exchanged financial statements.

Gonabady-Namadon v. Mohammadzadeh, 2008 BCSC

In this case, the husband, who lived most of the time in Iran, had been sending about $12,000 a month back to Canada to support his wife and children here. Following separation, the husband stopped supporting his family, pleading poverty. The court found that the husband hadn't made sufficient disclosure and imputed income to him of $250,000 a year for the purposes of support. The moral? If you're trying to duck a support obligation, you must make full and complete financial disclosure.

Loesch v. Walji, 2008 BCCA

In this case, the husband was found at an interim application to have an income of $1,600,000 per year, which figure was used to calculate a spousal support obligation of $50,000 per month, even though the Spousal Support Advisory Guidelines suggested that only the first $350,000 of the husband's income should be used to calculate his support obligation. The decision was upheld on appeal, partly on the basis that appellate courts should be very, very reluctant to interfere with interim orders.

Sihota v. Sihota, 2008 BCSC

The court in this case confirmed the dire consequences to one parent when the other parent has sole custody and sole guardianship. The mother had previously obtained an order for sole custody and sole guardianship and decided to send the child to school overseas. The husband objected and the court held that as the mother was the only person with custody and guardianship she alone had the right to make decisions about the child's living arrangements.

Majhenic v. Majhenic, 2008 BCSC

This is case is important for its discussion of the idea of "foreseeability" in variation applications. Where an order has been made about support or the care and control of children, it is usually open to someone to try and change the order where there has been a unforseeable change in circumstances. In this case, the husband had agreed at age 62 to an order requiring him to pay spousal support of $1,000 per month. On the husband's retirement at age 66 he applied to cancel his support obligation. The court required his support payments should end in three years on the basis that the husband's retirement was plainly foreseeable and it was unreasonable for the wife to assume his support payments would be permanent.

Trif v. Trif, 2008 BCSC

This case is remarkable for its unsual parenting arrangements. After separation, the wife sought to move from the Lower Mainland to Vancouver Island to pursue a new relationship and she applied for sole custody of the child. The father opposed the application and said that either the child should live with him or they should share the child's time on a rotating weekly basis. The court, after seriously criticizing a custody and access report, said that the child's time would be shared on a rotating yearly basis.

Stein v. Stein, 2008 SCC

This case is a bit complicated, but essentially the Supreme Court of Canada decided that a judge at trial can allocate responsibility for debts relating to the marriage that may or may not come into existence in the future and be for an unknown amount. The debt in question related to a tax shelter the parties had invested in during the marriage which was subject to unknown future tax consequences.

Francis v. Logan, 2008 BCSC

This is another variation-of-spousal-support-on-retirement case. Unlike Majhenic, however, the husband applied to reduce or end his spousal support obligation on retirement at age 63. The court refused the application as the husband's early retirement was entirely discretionary and not due to some illness or economic cause, and was done in the face of his spousal support obligation. The court allowed the husband to reapply when he turned 65.

Label v. Albanese, 2008 BCSC

The interesting part about this case concerns an application for retroactive child support made after the child had ceased to be a dependent minor child. The court dismissed the claim, saying that a child had to be a "child" as defined by the Family Relations Act at the time an application for child support is made, including an application for retroactive child support.