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 youre paying the table amount of child support based on an income of $250,000 per year, youre 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 Im not sure that its 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 couldnt 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. Theres 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 theres 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. Im already stocking up on espresso beans to prepare for the many late nights ahead.
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