How is Child Support Calculated? Part 1 of our Commonly Misunderstood Family Law Concepts Series

There are a number of commonly misunderstood issues in family law. A good portion of first meetings between family lawyers and clients are often spent dispelling these misconceptions. A blog is an ideal place to very briefly address some of these misconceptions. One such misunderstood concept, and the topic of the first installment of the series, is how child support is calculated.

For the most part, determination of child support in Ontario is relatively simple. The first factor is the residential schedule of the child, meaning with whom he or she lives and when. If the child lives with either parent less than 40% of the time, then the party with the child less than 40% will generally pay child support to the other parent. The amount of child support is based on the income of the parent paying child support and the number of children for whom support is being paid. The Child Support Guidelines include tables for determining the amount of child support, based on the Province in which the support-paying parent lives. The most common disagreements on amount of child support arise when parents are self-employed and there is a question as to what their genuine income is or when they are intentionally not maximizing their income potential.

The income of the parent receiving child support is generally not relevant, meaning that even if the recipient parent has a significantly higher income than the paying parent and can easily meet the needs of the child without child support, the amount that the paying parent has to pay is not affected. This also means that regardless of whether either parent has a new partner (including one with a significant income), or any additional children, child support is generally unaffected.

Undue Hardship

In rare circumstances, a parent may be able to make what is called an ‘undue hardship’ claim, meaning that paying child support in accordance with the table amount based on his or her income would constitute undue hardship.  This is a very high standard and these claims are not often successful. The undue hardship cannot simply be that it would be difficult for the parent to afford the table amount, rather, it should be related to high debt incurred during the relationship, very significant expenses required to visit with the child (e.g. airfare), the parent’s legal obligation to support another person or a similar situation.

In an undue hardship claim, the incomes of both parents are relevant, along with the incomes of any other adults in the household, most often new partners of the parent. This is because an undue hardship claim involves a mathematical formula to determine the standards of living of the parents.

Shared Parenting

If the child lives with each parent at least 40% of the time, the parents have what is called a ‘shared parenting’ schedule. Child support in a shared parenting situation is more discretionary than in a primary residence set-up. However, the courts often take a ‘set off’ approach, meaning they determine what each parent would pay to the other parent based on their income and the number of children if the children lived primarily with the other parent and then set these amounts off against one another.

For example, Parent A and Parent B spend equal time with their one child. To determine the set off amount, first use the Child Support Guidelines to determine what Parent A would owe to Parent B in table child support if the child lived mainly with Parent B. Let’s say this is $500 per month. Then, you would do the same for Parent B and determine how much he or she would pay to Parent A in table child support if the children lived primarily with Parent A. Let’s say this is $700 per month. Using the set-off formula, Parent B would pay $200 per month to Parent A. Note that if you are in a shared parenting arrangement and considering set-off child support, it is imperative to seek both legal and tax advice, as there may be a means of structuring these payments in a tax-advantageous manner.

The family law lawyers at Mills & Mills LLP can provide advice on the child support you should be paying or receiving. Our team also includes tax experts who can assist when tax and family law issues overlap. Please do not hesitate to contact us at 416­-863-0125 or send us an email.

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