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  • Forced Employment Termination clause in a separation agreement

    Hello Forum,

    Ex and I are in process of amending my separation agreement. Ex wants to increase my extra-ordinary child expense ratio. My ex has done a number of nasty things to me and I'm trying to take the high road. I currently pay 65/35 and share custody of two kids.

    She wants me to pay more and I'm ok with it as long as I'm earning a decent living. However, with layoffs exasperated by COVID I'm not sure how secure my job is and I'm 48 in the financial industry. If I get laid off, there is a high chance I will no be able to get the same income or another job in the financial industry because of my age and the automation of the entire industry. At my current role, I've been tasked to automate my role for the last 2 years.

    Question 1
    My income is variable and can range from 200k-250k per year. If I get laid off, it will go to around 40k-60k of only investment income. With no income from employment, will I be expected to pay CS based on my income when employed.

    Question 2
    Has anyone ever put in an Forced Employment Termination Clause in their separation agreement to adjust their CS your support obligation based on a reduced income due to early/forced termination.

    thanks again.

  • #2
    I have never heard of that type of clause. If you lose your job you would need a motion to change child support.

    Section 7 is based on your income. If your split is 65/35 and you are making 250 a year then your cs is pretty high. If she isnt willing to take 65% then perhaps the kids are in too many activities. Thats pretty unfair to demand more when cs is already high.


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    • #3
      For section 7, what is her income? Compared to yours? Why does she want you to pay a higher share?

      Just put a clause in your agreement that child support payable will be re-calculated each year, and updated, based on each year's CRA Notice of Assessment and your line 150 income (before deductions).

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      • #4
        Originally posted by dad2bandm View Post
        Just put a clause in your agreement that child support payable will be re-calculated each year, and updated, based on each year's CRA Notice of Assessment and your line 150 income (before deductions).
        This is the normal clause but the problem becomes that if you are in a province with a maintenance agency (ie Family Responsibility Office), your ex can file the agreement for the higher cs amount with them and they will not update until they receive a new order.


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        • #5
          Originally posted by rockscan View Post
          This is the normal clause but the problem becomes that if you are in a province with a maintenance agency (ie Family Responsibility Office), your ex can file the agreement for the higher cs amount with them and they will not update until they receive a new order.


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          If it is FRO a clause can be put in to penalize the party not readily going along with changes to FRO and forcing unnecessary court dates. Not the best situation but what else can be done?

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          • #6
            Originally posted by pinkHouses View Post
            If it is FRO a clause can be put in to penalize the party not readily going along with changes to FRO and forcing unnecessary court dates. Not the best situation but what else can be done?

            Clauses like that aren’t enforceable. All agreements operate on the premise that parties will be reasonable. Family Law demonstrates that is not true. If a recipient is getting cs on $250,000 and it will drop to $50,000, they are more than likely to be unreasonable and keep the amount the way it is with an enforcement agency forcing the payor to file in court. They will then agree to it after a lengthy and expensive legal fight.

            There is nothing that can be done until a penalty is introduced to the unreasonable party preventing shit like this from happening. Won’t happen so we are stuck with this.


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            • #7
              A clause like that was put into my agreement. Court normally assesses costs but I understand that this is rarely 100%.
              It was put in to dissuade a party from being unreasonable.
              I do not know how Small Claims Court figures in if at all and I pray I don't wish to have to find out.

              I am being told now that the clause was a waste of money.

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              • #8
                Small claims court would not be involved in child support. Even for outstanding amounts. Each court has certain jurisdictions and normally stay in their lane.

                Based on what I have seen on this forum, in my husbands case and through research on canlii, when it comes to money, the probability of being unreasonable is high.

                My advice is simply be prepared to have to file a new motion to change when your income changes. Especially when it is a significant drop.


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                • #9
                  Originally posted by rockscan View Post
                  Small claims court would not be involved in child support. Even for outstanding amounts. Each court has certain jurisdictions and normally stay in their lane.
                  Not for CS but for costs involved with being forced to go through court to get the FRO change.

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                  • #10
                    Originally posted by pinkHouses View Post
                    A clause like that was put into my agreement. Court normally assesses costs but I understand that this is rarely 100%.
                    It was put in to dissuade a party from being unreasonable.
                    I do not know how Small Claims Court figures in if at all and I pray I don't wish to have to find out.

                    I am being told now that the clause was a waste of money.
                    You can put any clause in an agreement- the question of whether it would hold up in court is the real test. It is a fundamental rule in contract law that penalty clauses are prohibited. I don't know family law that well- but my guess is that it's the same there as well. There's a reason courts handle cost awards.

                    That being said- in your case, it's totally possible that it could work to dissuade the other party from being unreasonable. However, if they have a half-way decent lawyer- they probably already know that that clause is unenforceable.

                    Didn't your lawyer warn you against that?

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                    • #11
                      Originally posted by iona6656 View Post
                      You can put any clause in an agreement- the question of whether it would hold up in court is the real test. It is a fundamental rule in contract law that penalty clauses are prohibited. I don't know family law that well- but my guess is that it's the same there as well. There's a reason courts handle cost awards.

                      That being said- in your case, it's totally possible that it could work to dissuade the other party from being unreasonable. However, if they have a half-way decent lawyer- they probably already know that that clause is unenforceable.

                      Didn't your lawyer warn you against that?
                      They did not. Every time I learn more I shake my head a bit inside.
                      Things like contempt, perjury etc rarely matter. Disclosure can simply be ignored. It all seems crazy the lack of law.
                      I had figured courts award costs when the situation is a bit more complex.
                      In my case it would be black and white in at least one situation.

                      I think there are a lot of lawyers that don't explain things to their clients properly.
                      Last edited by pinkHouses; 10-06-2020, 05:53 PM.

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                      • #12
                        thanks for your responses.
                        With COVID, I imagine this year I will be on the low side closer to 200k and she is a steady 130k. We do recalculate our incomes every year and make a true up payment to actual income. But, if I lose my job, is there an expectation to maintain my CS payments based on my income when I was employed.

                        I already feel stressed, with living expenses, mortgage payments and CS payments there is very little left over for savings. I am "nofrills" because I can't afford to shop anywhere else if winter is coming.

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                        • #13
                          Originally posted by nofrills View Post
                          thanks for your responses.
                          With COVID, I imagine this year I will be on the low side closer to 200k and she is a steady 130k. We do recalculate our incomes every year and make a true up payment to actual income. But, if I lose my job, is there an expectation to maintain my CS payments based on my income when I was employed.

                          I already feel stressed, with living expenses, mortgage payments and CS payments there is very little left over for savings. I am "nofrills" because I can't afford to shop anywhere else if winter is coming.

                          If you lose your job then your new income is used for cs. You can either update when it happens and reconcile any outstanding amounts at the end of the year OR update on the tax update. Either way you are at the mercy of your ex. If she wants to be nasty she can file with an enforcement agency.


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                          • #14
                            Hypothetically, if my income goes to 200k to 50k and hers remains at 130k, and we adjust at year end, the table would turn and she would owe me money. (not sure how I feel about taking it)

                            Has this ever happened to anyone before?

                            Also, if I couldn't find an equivalent position because of my age and level, would I be considered intentionally under-employed.

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                            • #15
                              It depends on the position and what you did to find equivalent employment. Proving intentional underemployment is difficult and the onus is on her. However, you may need to prove what you have done to find employment. If you are sitting at home saying “well theres no point” then she could argue you aren’t trying. The problem for her though is if your current job becomes automated and there is no hope of employment then she would only be able to argue imputation at an income you could earn.


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