THE NEW CHILD SUPPORT REGIME
By DOUGLAS J. MANNING,
Family Law Department
Effective May 1, 1997, all periodic child support paid
pursuant to Orders and most agreements made after May 1,
1997 will not be taxable in the hands of the recipient nor
tax deductible to the payor. Existing orders and agreements
will not be affected by the new law unless one of the parties
to the agreement or order applies to vary the support pursuant
to the Divorce Act.
The new legislation affects orders made pursuant to the
federal Divorce Act. A similar change to orders
for child support under the provincial legislation came
into effect in November 1997.
The second major change in child support is the establishment
of child support guidelines that establish the amount of
child support to be paid based on the income of the support
payor. The implementation of the new legislation is deemed
to be a material change in circumstances thus allowing parties
with pre May 1997 orders to apply for a change in the amount
of support to be paid and the court is obliged to consider
adjusting the level of child support based on the new guidelines.
The hope of the government in bringing in guidelines, is
to reduce the number of cases in which parties argue child
support in the courts. The guidelines set out presumptive
levels of support - they are not merely suggestive of the
amounts of support to be paid.
The new guidelines are intended to reflect the average
cost of supporting children in each province at various
income levels. The actual amount of support is determined
by the number of children and the income level of the payor.
In addition to the amount of support to be paid according
to the guidelines, the court may impose an obligation on
the parents to contribute to "extraordinary expenses"
relating to child care, schooling, extracurricular activities
or medical or health needs.
In the interests of consistency, there will be very little
room for the exercise of judicial discretion in altering
the amount of support to be paid. Special circumstances
that might justify a level of support different from the
amount specified in guidelines might include unusually high
debts, extraordinary expenses associated with the exercise
of visitation with the children or financial obligations
to other dependents to the extent that the circumstances
give rise to undue hardship resulting in a lower standard
of living in the household seeking the relief than in the
other party's household.
A court could consider making an order different from what
the guidelines would provide if the other terms of the agreement
of the parties or court order contains special provisions
that directly or indirectly benefit the child and the application
of the guidelines would prove inequitable. For example,
if the payor parent transferred property to the recipient
parent for the benefit of the child, then a support figure
different from the guidelines may be appropriate.
An additional requirement in the new legislation is the
necessity of every parent against whom a child support order
has been made to provide to the recipient parent financial
information concerning their income on an annual basis.
Many payors will no doubt consider this to be an invasion
of their privacy by their former spouse. This requirement
may be avoided by keeping the child support obligation in
a separation agreement rather than a court order.
Current support payors and recipients are urged to obtain
a legal opinion as to whether they would receive better
treatment under the new regime with its tax treatment and
support guidelines than they currently receive under their
current arrangements.
<-Back
The above is not intended to constitute
legal advice. Please contact a lawyer to clarify your
legal rights.
