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  • When Do You Calculate Child Support Based On Average of Last 3 Years?

    Does anyone know in what circumstance it is best to calculate child support based on the average of the previous 3 taxation years?

    According to the guidelines (which I read a while back, now I cannot find a working link) I recall it being when the yearly incomes are inconsistant.

    Would this apply to a year when the payor had lost his job and was unemployed for half the year? (Yet continued to pay support in the previously ordered amount based on his previous year's income.)

    I guess what I'm asking is... which way is the "correct" or "right" way to calculate:

    1. Calculate support based on the previous year's total income, despite the drastically reduced income due to unemployment; or
    2. Calculate support based on the average income of the previous 3 taxation years (2 years fully-employed and 1 year part-time employed due to unemployment).

    Any thoughts? Any knowledge on links or resources where I could find this information?

    Thank you kindly in advance.

  • #2
    (sorry for the acronyms... NCP = Non custodial parent, the payor paying CS (child support).....CP = Custodial parent, the payee receiving CS)

    Both methods are fair in a situation where the CS is adjusted yearly (based on previous year, or 3 year average) and the CS is for a long period of time - by fair I mean that the payor pays according to their actual income over time, which is what the tables are all about.

    I think I prefer adjusting based on previous year income only, though this can result in more volatile changes in CS, it more closely matches the actual volatility of the parent paying CS. Also if the child were living with that parent, they would exeperience that volatility without delay.

    In the case of an extreme change in income, becoming unemployed for example, the CS payee has a year to prepare for the change (aka save/reduce spending), where as the CS payor, probably had no time to plan for the change. So in the this case it must be emphasized that the payor plans for such volatility by having access to savings or credit in the case when CS payments have yet to catch up with the new reduced income level.

    These are just my thoughts, and not based on CS guideline readings etc.

    As a side note, if the NCP (the payor of CS), has no income, or insufficient income to live on and draws from other sources such as loans/gifts/savings etc, then it does not seem fair that they pay CS strictly according to their income, as they are finding money to support themselves, so they need to share that with their kids.

    As a further thought, maybe it would be fair if someone used a loan to supplement their income while under employed, that loan should be treated as income for the purpose of calculating CS. Subsequently, paying off that loan should be removed from income for the purpose of calculating CS. Gifts should be considered as income for the purpose of calculating CS also. This may be too complicated to watchdog or implement, but it seems to me this would solve the problem of calculating CS when someone is underemployed or unemployed temporarily and supplementing their income in some other way.

    Alternatively it may be fair for the under/unemployed situation to base CS on actual income (adjust yearly as mentioned in the original post) and allow the CP (the payee), to handle the volatility of the CS, even to the point of no CS coming in for a time (if the NCP was unemployed for a whole year). This would avoid getting into the NCP business with respect to how they handle their unemployment, and in the end all CS is based on actual income, which is utimately the goal. Gifts though should always be considered as income, and of course all parents should be as gainfully employed as possible at all times to the best of their abilities.
    Last edited by billm; 09-14-2009, 04:54 PM.

    Comment


    • #3
      Thank you Bill. I appreciate your response.

      What you write makes PERFECT sense. It is the fairness that my husband and I are striving for, yet are failing to achieve... even in court.

      According to the Department of Justice, "if your income changes a lot from year to year, you can look at your income over the last three years to calculate your average annual income for the guidelines if that would most closely reflect your actual income."

      The thing is, my husband's income doesn't "change a lot from year to year." Only THIS year, has there been a change, and a drastic one, to say the least. Yet, he is neither voluntarily unemployed or underemployed. Many people have experienced job loss over the past year thanks to the October '08 market crash and recession. Why penalize these people... these parents... further? KWIM?

      Unfortunately, in our situation it goes like this: Dad - the CS payor - wants to provide his fair contribution without going into debt; while Mom - the CS recipient - wants as much money as she can possibly get, without regard of the financial difficulties it causes Dad. And from our experiences in mediation, meetings with lawyers, and court... Mom always wins and Dad always pays.

      FYI - My husband and I have been keeping track of his child support payments... what he has been paying, and what he should have been paying according to the guidelines and tables. So far, he has overpaid by more than $6,000. Yet when this gets brought up in court, judges shrug and call it "a gift." Go figure! It's as if he walks around with a giant sign on his back that reads "CS Guidelines don't apply to me! Go ahead and take every penny!" Heck, if it weren't for me... he'd probably be living in a box on the street - and what's frightening is that such an outcome is not that uncommon!

      Is it not in the child's best interest to have a Father that is able to support himself (and his children) financially... a Father who can provide them with a safe and welcoming home... a Father who does not have to work 24/7 in order to maintain a semi-acceptable standard of living so that his children don't get taken away from him?

      *SIGH* Please don't think I'm bitter, because I'm not. I'm just ashamed of our "justice system" when it comes to Family Law.

      Comment


      • #4
        I think most Family Court judges (if it even gets to that) will look at CS obligations of the NCP based on their previous year's income. This usually applies to self employed NCP whose incomes may vary considerably from one year to the next. Taking an average of the last 3 years can make CS payments overshoot or undershoot the correct amount.

        Comment


        • #5
          Originally posted by Stargate View Post
          I think most Family Court judges (if it even gets to that) will look at CS obligations of the NCP based on their previous year's income. This usually applies to self employed NCP whose incomes may vary considerably from one year to the next. Taking an average of the last 3 years can make CS payments overshoot or undershoot the correct amount.
          It is important to distinguish between establishing CS amounts that will not be changed (unless there is a significant change in circumstances and you go back and fight it out in court etc), or establishing CS and adjusting it annually (with whatever formula you like - previous years income, average of 3 years, it does not really matter).

          If you are trying to establish CS amount that will not change, then a 3 year method makes more sense.

          In my opinion establishing CS that is not autmatically adjusted each year based on actual tax returns (or whatever formula one agrees to), make no sense at all. This is always unfair to the NCP or CP as income always varies eventually. One might argue that the NCP will simply manipulate their tax returns to minimize CS, but if they do that, then you take them to court and come up with a different solution. To fix the amounts for that reason makes no sense as it screws the rest of us who simply want to pay/receive CS relative to what we/they actually earn - no arguments, no lawyers, nothing to fight about.

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          • #6
            Originally posted by Stargate View Post
            I think most Family Court judges (if it even gets to that) will look at CS obligations of the NCP based on their previous year's income.
            If only this were true! We've been to court 3 times for child support purposes. Each and every time, the "previous year's income" was overlooked because my husband got "a new job that pays more" and so his CS was based on his higher current income instead of his previous year's income. Then the following year, when we went to change it to an amount based on the previous taxation year's income (the "higher, current income" from the previous court date), it was the same case again... "but his annual salary at this job is $40,000 and his total income from last year is only $36,000" ...and so his child support was once again based on his "higher current income." Oh, and let's not forget when my husband lost his "higher current income" job and went for a reduction... and the judge ordered that he continue paying the same amount because "he is only unemployed for 3 months, so he could possibly find a job tomorrow." And let's not forget the legal costs he was ordered to pay for bringing a motion for a reduction... "prematurely!" I'm sorry, but that just isn't fair. Putting a paying father into debt is not in the child's best interest... especially while good ol' mom is taking the child to Disney every year, buying herself new luxury vehicles, and taking island vacations with friends while the child is on holidays with us... meanwhile, we count pennies to see if we can afford the gas and admission to the zoo. :-S

            Comment


            • #7
              Originally posted by #1StepMom View Post
              I... meanwhile, we count pennies to see if we can afford the gas and admission to the zoo. :-S
              there with you, upcoming motion to reduce CS retro to when not receiving income. Hoping for the best, knowing the worst will happen..gas to get to work...using points for groceries and the generosity of family of friends

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              • #8
                Believe it or not...

                We asked the support recipient what, in her opinion, is the best and fairest way of calculating child support on an ongoing basis.

                (We asked this because she has opposed every proposal we have offered in accordance with the guidelines. We know that she wants to calculate support in whichever way will get her the most money, without regard to guidelines and maintaining the same calculation practice year-to-year. So, we decided to put the onus on her.)

                Her response: Find and maintain a full time job.

                How does this answer the question? It doesn't. So we asked her again to answer the question.

                Meanwhile, she's demanding to know about upcoming child support payments. Ha! If she wants that information... she'll need to answer the question first!

                This shall be interesting.

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                • #9
                  Ha ha ha... her response: Child support should be based on your household income until you are able to find and maintain a job.

                  Seriously?!

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                  • #10
                    I still think she is trying to make a case for your income... crazy.... be careful

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                    • #11
                      Originally posted by representingself View Post
                      I still think she is trying to make a case for your income... crazy.... be careful
                      Crazy is right!

                      My husband and I actually have a prenuptial agreement that specifically states that I shall not be responsible for child support of his son, nor shall my income be taken into account when determining his support payments and ability to pay.

                      What is frightening is that when we brought our prenup up with duty counsel on our last court date, she told us that the judge can very easily over-rule the prenup, and that in all honesty, the prenup meant nothing when it comes to family law.

                      Upon hearing that, I burst into uncontrollable tears.

                      How "just" is that?!

                      Comment


                      • #12
                        That's bullsh*t..... but probably true, nonetheless.

                        Our Family Court Judges seem to be able to do whatever they want, whenever they want...
                        You would think that a legal contract such as a prenup would hold some water in court, but not if they can just "set it aside" whenever they want. Grrrrr.

                        Your case makes me a little sick to my stomach.

                        Clearly the CP is using anything and everything she can to make your lives miserable, and using the child for personal monetary gain.. which is so WRONG.

                        By going after support from a person who has zero biological ties to a child, a CP could possibly destroy the NCP's new marriage. AND destroy the lives of any new children in that relationship, (people often fight/divorce because of financial issues).

                        I know that if a CP marries a new spouse who is filthy stinkin' rich, the NCP doesn't get a deduction in their CS payments...??? Why should a CP be able to reach into the pockets of the NCP new spouse???

                        So should these NCP's be alone until their children reach the age of majority???? How is that fair????

                        Unfortunately, our system is flawed to the point that if chickie poo can prove that your standard of living in your household is better than hers, she could win a judgment against you, and who's to say that when your husband IS back to work, that she won't just increase her demands to include both of your incomes permanently??

                        Frustrating.... Good Luck

                        Comment


                        • #13
                          What is most frustrating is that for someone who lied about birth control and got pregnant (accidentally, but still) on a one-night-stand... she feels that she is entitled to everything my husband has, and everything he has access to through me, through his family, through his friends, etc.

                          Just because she wasn't able to get on with her life post pregnancy (ie: unable to find a significant other who'd give her the time of day, unable to have a family of her own, a place of her own, etc.) she feels that my husband should be penalized for having a life.

                          My husband stepped up to the plate as the Father of this child, willing to fulfill the responsibilities of parenthood. He always exercises his access and has been consistantly doing so since the birth of his son. He has also been consistantly paying child support... even in amounts higher than the tables claim he should pay.

                          And now, when all he wants is to have a normal life, while fulfilling his paternal responsibilities, he is getting castrated for it... by the child's mom and by the courts.

                          What's most frustrating is that we have no leg to stand on... as quoting the guidelines and family law rules and begging to abide by them seems irrelevent in the eyes of the judges we get. Now that makes me sick to my stomach.

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                          • #14
                            maybe take it all the way to appeals, whats the worse they can do?, they have already done it and just maybe it will get better

                            what do the courts say when she gets a gift from family friends (her vacations), are they not supposed to include it as income if they are counting loans from family and friends as income for the NCP

                            Comment


                            • #15
                              Originally posted by #1StepMom View Post
                              What is most frustrating is that for someone who lied about birth control and got pregnant (accidentally, but still) on a one-night-stand... she feels that she is entitled to everything my husband has, and everything he has access to through me, through his family, through his friends, etc.

                              Just because she wasn't able to get on with her life post pregnancy (ie: unable to find a significant other who'd give her the time of day, unable to have a family of her own, a place of her own, etc.) she feels that my husband should be penalized for having a life.

                              My husband stepped up to the plate as the Father of this child, willing to fulfill the responsibilities of parenthood. He always exercises his access and has been consistantly doing so since the birth of his son. He has also been consistantly paying child support... even in amounts higher than the tables claim he should pay.

                              And now, when all he wants is to have a normal life, while fulfilling his paternal responsibilities, he is getting castrated for it... by the child's mom and by the courts.

                              What's most frustrating is that we have no leg to stand on... as quoting the guidelines and family law rules and begging to abide by them seems irrelevent in the eyes of the judges we get. Now that makes me sick to my stomach.
                              I am sorry to hear about your woes. It just underscores how the Courts and Family Law in Canada is blind to the facts and how it always seems that the NCP gets shafted while the CP is busy painting her toes nails or powdering her face all the while expecting someone else to foot the bill.

                              Yea, it turns my stomach as well.

                              Comment

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