In her comments on my post about the so-called Roe v. Wade case for men, Jenny raises a number of interesting questions about what rights and responsibilities an unwed father in Canada has in regards to his unborn children when he is no longer in a relationship with the mother.

Child Support
Once a child is born, the father has an obligation to pay child support. The amount of child support is the same regardless of whether the parties were married or not or whether the child was expected or not or whether there was any fraud or deception.

Jenny asks whether a man may be required to pay child support before the child is born to cover prenatal expenses. The answer is yes: section 34(1)(h) of Ontario’s Family Law Act permits a court to order “payment of expenses in respect of a child’s prenatal care and birth”.

Spousal Support
In Ontario, unmarried couples don’t have the right to spousal support unless they fall under the definition of “spouse”. This means they must have lived together for three years or have been living in a relationship of some permanence and be the parents of a child. In other provinces the time limit is different than the three years.

However, in one case in Ontario, where a couple had only been dating 9 months – they lived separately and only slept together on weekends – an appellate judge ordered spousal support be paid to cover half of the prenatal costs the mother incurred. The judge found that this was a marriage-like relationship and so the father fell within the definition of “spouse” under the Family Law Act.

Right to Know About the Child
Jenny states quite correctly that if the mother doesn’t let the father know about the pregnancy, then the father doesn’t really have any parenting rights. There is no law to compel a mother to inform the father about a pregnancy.

Adoption
Jenny asks: “If the woman chooses to give the child up for adoption does the man not have a say – does he not have to sign away his parental rights at the same time?”

If the man doesn’t know about the child, obviously there’s not much he can do to prevent the adoption.

However, if the mother wants to give the child up for adoption and the father wants custody, the father would have a good chance of getting custody.

Abortion
A man can’t force the mother of this child to have an abortion.

Miscellaneous
There have been some suits for fraud and other creative torts in cases with facts along the line of the “Roe v. Wade for men” case. Damages claimed usually include the total amount of child support the father would be estimated to pay over the course of the child growing up. As far as I know, none of these cases have been successful in Canada.

Conclusion
Don’t have sex. No, just kidding!! But you should be aware that if a pregnancy occurs, your legal obligations are pretty close to what they’d be if you were married.

Most people involved in a family law case in Canada know that the amount of spousal support or child support that must be paid is based on income. However, income for family law purposes is not the same as income for income tax purposes.

The question that often arises is what is income for family law purposes. Often people receive income in a year that they don’t normally receive – this is known as non-recurring income. Should this be considered as income for purposes of calculating child support or spousal support?

The answer is, as always, it depends on the facts of your case. The Child Support Guidelines give judges a discretion to decide whether to include or exclude one-off payments in income. However, over time, certain patterns emerge in judges’ decisions. While they are not “rules” they can provide guidance as to your particular case.

There is a bias in the courts towards including non-recurring income in income for child support and spousal support purposes. The philosophy behind this is that if you can pay more support, you should be required to do so, as this is what’s best for the children. There’s also another guiding principle in the courts, which is that a child’s standard of living should be about the same at each parent’s household.

Some of the most common types of non-recurring income that courts deal with are:

1. RRSP Redemption. Even though RRSP redemptions are included in your income for tax purposes, a one-off RRSP redemption normally would not be considered part of your income for child support or spousal support purposes. However, if you had a pattern of cashing in a certain amount of RRSPs each year, the results might be different.

2. Stock Options. The law about including stock options in income is less clear. If you exercise stock options on a regular basis, the chances are that they will be included in your income. However, if you exercise stock options only once, and this is not part of your normal pattern of income, there are leading cases that say this should be included in income and also that say this should not be included in income. If you have a significant amount of one-off income from stock options, get a good family law lawyer and be prepared to roll the dice.

3. Severance Packages. These are normally included in income for support purposes, even if you find a job right away and so have an unusually high income in the year the severance package was paid.

4. Personal Injury Awards. Generally, if the damages you receive in a personal injury award are for pain and suffering, this does not need to be included in your income for purposes of calculating support. If the damages you receive are for loss of income, these generally do get included in income for support purposes. If you’re negotiating an out of court settlement of your personal injury suit, you can guess how you want the settlement to read.

5. Capital Gains. The treatment of this type of income is all over the map, but generally one-off capital gains are considered income for purposes of calculating support. On the other hand, generally one-off capital losses are not used to reduce income for purposes of calculating support. The most usual case where capital gains will not be included in income is where the gains are immediately re-invested. For instance, if you sell a business, and re-invest the proceeds into a new business, then generally the capital gains from the sale of your business won’t be considered as part of your income for purposes of calculating child support and spousal support.

So, somebody’s made a complaint to the Law Society about my web site and, in particular, about this page that deals with child support.

While I haven’t yet received a copy of the complaint, apparently the essence of the complaint is that this page encourages fraud and encourages people to evade their child support obligations.

The reality though is that numbers 1 through 4 are simply statements from the Federal Child Support Guidelines.

In particular, #1 is just a restatement of section 10 of the Child Support Guidelines, #2 is based on section 3(2) of the CSGs, #3 is a restatement of section 4 of the CSGs, #4 is a restatement of section 9 of the CSGs.

Number 5 is from the Divorce Act and is based on section 15.1(5).

Numbers 6 and 7 are certainly more aggressive, but are based on my experience. In particular, in Ottawa it is common for people in the high-tech industry to take low salaries and receive stock options that hopefully will result in a large payout in the future.

The final paragraph mentions a web site where people can buy a book on the subject.

I think as a lawyer I’d be negligent not to inform people of what the law is, or of ways in which they can accomplish their goals. If the page had been entitled “7 ways to pay less income tax” I wonder if it would have generated such a complaint. People have the right to arrange their affairs within the boundaries of the law so as to accomplish their financial goals.

When I recommend to people that they should get a marriage contract to reduce any future equalization payment, am I also encouraging fraud?

Finally, I’d like to think that one of the reasons people like my divorce web site is because I tell it like it is, regardless of whether the reality is pleasant or not. The goal of my web site is to present as much divorce information as possible to people, so that they can make their own choices and aren’t so dependant on lawyers.

What do you think? Is this page inappropriate? Let me know by adding your comment below.

On February 13, 2006, the Supreme Court of Canada heard arguments about whether child support should be varied retroactively when the support recipient has delayed requesting an increase in child support. The case has even garnered international attention.

The issue has previously been dealt with by Courts of Appeal in Ontario, Alberta and British Columbia. The 3 courts have come to different conclusions. The Supreme Court will be resolving this conflict between the lower courts.

I’ve previously discussed the awarding of retroactive child support in Ontario.

Under the statutory scheme, support recipients have the right to request support payors’ income information on an annual basis. This would normally be done around May, after a person has completed and filed their income tax return. Based on this updated information, the support recipient can request a variation of child support.

As a practical matter, the language from the statutory scheme regarding annual requests for income information and for annual variations of child support is incorporated in separation agreements as standard practice. As well, many final court orders also include this language. This helps ensure that both parents are aware of their financial and legal obligations in this regards.

The issue is that often support recipients wait several years to make the request for financial disclosure. If variations of child support can be made retroactive for many years prior to the request for varying child support, the amount of arrears can be staggering. In one case, the amount totaled around $100,000.

Frankly, I believe that the statutory scheme is quite clear and easy for support recipients to follow. Support payors shouldn’t be penalized simply because the support recipients don’t follow the statutory scheme. All that the support recipient must do is annually mail the payor (preferably with proof of posting) a letter requesting the payor’s updated income information.

If the payor does not comply with this request, the payor will run into trouble for breaching the Guidelines by failing to provide financial disclosure, and get hit with retroactive child support as a result. If the payor does comply, and the payor’s income has increased, the recipient can preserve their right to an increase in child support simply by mailing a letter to the support recipient making a request for the increase.

A lot has been made of the fact that support recipients often do not have the financial or emotional resources to request more child support. It’s no doubt true that legal proceeding are expensive and emotionally draining. Litigation is certainly not something that should be entered into lightly. But it is fairly easy under the current statutory scheme to preserve your rights without starting litigation simply by creating a proper paper trail until you are ready to litigate (and it’s a lot cheaper than litigating all the way to the Supreme Court of Canada).

Some critics of the current statutory scheme state that a further step should be added to it — namely, annual adjustments to child support. Annual adjustments can be cost prohibitive. The reality is that determining a person’s income for child support purposes is often not straightforward. Entire chapters of family law texts are devoted to this subject. I think that the drafters of the Guidelines were wise to require that the parties exchange all the information that they need to determine whether child support should be adjusted, but to leave the final decision as to whether an adjustment should be made in the parties’ hands.

As well, the issues involved in this appeal have been cast as an issue of wealthy male payors shafting helpless female payees. But the reality is that the law cuts both ways. Many times in my practice, I’ve seen men, due to tough economic times, take lower paying jobs, and continue to pay the same amount of child support as they did at their previous higher paying jobs. Or, they have been unemployed for a few months, and not had the financial resources to request a reduction of support while they were unemployed. And in one case of mine, a father waited for 3 years after a child died to request a reduction in child support due to this. The mother took the position that there could be no reduction prior to the date of the father’s request, and that she should pocket the extra child support paid for the last 3 years.

Update: This case has received further international attention.

In May 2006, there will be some sweeping changes to Canada’s child support laws.

There are basically 3 major changes, as follows:

1. Since the Guidelines have come into effect, there has been a lot of litigation over what are know as “special or expenses” or “section 7 expenses” or “add-ons.” These are additional amounts that support payors must pay on top of the table amount of child support. Examples of section 7 expenses are private school tuition, orthodontist bils, etc.

In the past, “extraordinary expenses” has not been defined, and different judges have interpreted the phrase differently. Take as an example horseback riding lessons. The impact of paying for your children to take these lessons will differ greatly depending on whether your income is $50,000 per year or $250,000 per year.

The argument is that if you’re paying the table amount of child support based on an income of $250,000 per year, you’re paying so much support that things like horseback riding lessons should be included in the table amount. Some judges would agree with this; others not.

This amendment is supposed to clarify things by defining “extraordinary expenses.”
The new definition is:

“(1.1) For the purposes of paragraphs (1)(d) and (f), the term “extraordinary expenses” means:

(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or

(b) where paragraph (a) is not applicable, expenses that the court considers are extraordinary taking into account

(i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,

(ii) the nature and number of the educational programs and extracurricular activities,

(iii) any special needs and talents of the child or children,

(iv) the overall cost of the programs and activities, and

(v) any other similar factor that the court considers relevant.”

Well, this definition certainly gives judges and lawyers a framework on which to make a decision about whether an expense is extraordinary. But I’m not sure that it’s going to reduce litigation. I can see caselaw developing under each of the 5 prongs of the part (b) test. As well, part (b)(v) really leaves the door open for argument. So many things can fit into a category of “other.”

2. In the past, under section 19 of the Child Support Guidelines, a court could take into account the fact that a child support payor living abroad may pay lower taxes than if the payor were living in Canada, and increase child support because of this.

However, the reverse was not true. People living in countries where there were higher taxes than Canada did not get a break on child support. I once had a client in Germany where this was a really difficult issue which I couldn’t do anything about. The new section 20 now allows a judge to decide whether a person living in a high-tax country can pay less child support as a result of the higher taxes.

3. The third change is that new child support tables are going into effect. The new child support amounts are higher than the old ones, by between 10% and 20%. For high income earners, the increases tend to be higher in percentage terms than for low income earners.

In my opinion, this is unfair. As inflation increases the cost of living, peoples’ salaries increase, and so the amount of child support is increased, which compensates for the increased cost of raising children due to inflation. There’s no need to change the table amounts.

The child support tables were supposed to reflect the cost of raising children and the amount of money people would be using to raise their children had they not separated. So, if there’s an increase in child support, to justify this there should be substantial evidence that the costs of raising children have significantly increased.

In any event, the new table amounts are a boon to family law lawyers across Canada. The coming into effect of the new table amounts constitutes a material change in circumstances justifying a chance to change child support. In other words, come May 2006, support recipients will be heading en masse to their lawyers to get this increase in child support. I’m already stocking up on espresso beans to prepare for the many late nights ahead.

David Giles responds to my comments on his analysis of the Contino decision. David states: “The point I was trying to make, and perhaps it didn’t come across clearly, is that the ‘dollars for days’ argument may be more easily rebutted.”

What I’ve seen prior to the Supreme Court decision is that in almost every case where a father requests shared custody, the mother responds by saying that he’s just doing it to reduce child support. While I think that the Supreme Court decision probably makes it harder to get that reduction, the fear of mothers about the reduction in child support will still be there, and so they will still continue to resist shared custody, and still continue to accuse the father of seeking it to reduce child support.

Another factor to consider is that child support is fairly easy to change, whereas changing an access schedule is difficult. So, a support payor who parents the children over 40% of the time can initially agree to pay the full table amount of child support, knowing that in a year or two there may be an opportunity to reduce child support, or at least not increase it as his or her income increases. On the other hand, it will be next to impossible for the support recipient to cut access down once it has been in place for a year or two.

Another thing to consider is that for relationships in which spousal support is payable, which is the case in most relationships that last a few years, the trend in the courts, now formalized in the Spousal Support Guidelines, has been to divide up the family income using certain percentages. So, even prior to the Supreme Court decision, it was pretty much the case that most savings you might get from a reduction in child support due to shared custody would be offset due to an increase in spousal support payable. So, in cases where spousal support is payable, which is very many cases, the Supreme Court decision might not make a big difference.

David also explains further his position that, “a valid argument may now be made in the determination of the proper amount of child support to be paid below the 40% threshold using the pro-rated set-off amount.” However, the language of the Child Support Guidelines is very clear: the table amount is to be used except in specifically enumerated cases.

David Giles did a write up of the Contino decision. Overall, I think it’s a pretty good analysis. However, I disagree with him on a couple of points.

David says that the decision has “opened the door to shared parenting by removing the reduction in child support argument.” With respect, I disagee. While there’s no longer an automatic presumption of a reduction in child support in cases of shared parenting, there’s still the possibility, and people will be alert to this.

David also says “I think the SCC has opened up a new controversy by confirming that the table amounts do not take into account any child related expenses (shelter, food, clothing, etc.) incurred by the payor parent at any level of access.” This always has been clear – it’s not new. See family law lawyer Gene Colman’s analysis of the Court of Appeal decision in which he eloquently states:

“In truth, the Federal Child Support Guidelines (and by consequence, the provincial counterparts) assume, in the actual design of the numerical entries for the table amounts, that the access parent incurs absolutely no costs for the child. (This has enormous ramifications with respect to the manner in which section 9 should be interpreted.) To prove the point that the Guidelines do indeed assume that the payor parent has absolutely no costs associated with the children, one need search no further than an overlooked publication authored by the Child Support Team from the Department of Justice Canada, Formula For the Table of Amounts Contained in the Federal Child Support Guidelines: A Technical Report (CSR- 1997-1E) (Child Support Team, December 1997):[20] Indeed, the philosophical and theoretical underpinning of the entire standard table amount is premised upon the fact that the payor parent incurs absolutely no child-centred costs.”

In any event, it will be very interesting to see how trial and motions judges deal with this decision. In a sense for shared custody cases, we’re back to the pre-Guidelines calculation of child support, with all the benefits and problems that this situation means.