Child support can be ordered pursuant to the Divorce Act (Canada) and/or the Family Law (Alberta). Child Support is the right of the child. Parents and/or guardians cannot contract out of a child support payment. The Court always maintains jurisdiction to determine child support issues.
Who's Entitled to Child Support
Child support is payable for children under the age of 18 and who have not withdrawn from the charge of their parents and/or guardians. Children over the age of 18 may be entitled to receive child support if he/she cannot withdraw from their parents' charge or obtain the necessities of life due to illness, disability or some other cause. The "other cause" usually refers to post-secondary education. Typically, the child is required to attend on a relatively full time basis. For adult children, the onus is on the parents seeking the support to establish entitlement.
Child Support Guidelines
The amount of child support payable is usually determined by the Federal Government Child Support Guidelines. The Alberta Child Support Guidelines determine the amount of child support payable when the parties lived in a common-law relationship, were not married but had a child together, or where a divorce action has yet to be started.
Regardless, the amount as set out in the appropriate guidelines are what is required to be paid by the payor parent.
There are two ways in which child support is paid pursuant to the guidelines:
The first is the section 3 or "base" amount of support. Once the income of the payor parent is determined, one simply looks at the tables to determine the proper amount of child support payable by that individual for the number of children that are dependants. For example, if someone makes $28,000.00 per year, the base amount of child support payable pursuant to the guidelines is $228.00 per month. This amount is not taxable to the parent who receives it nor is it tax deductible by the person who pays it. The amount of basic or section 3 child support does not automatically double in the event there is more than one child in the household. Accordingly, for the individual making $28,000.00 per year, the amount payable for two children is $411.00.
In addition to the base amount of child support payable, a payor parent may pay a proportionate amount of section 7 or "special" expenses. These additional amounts of child support include:
- the after tax cost of childcare which is required for a parent to maintain employment or go to school;
- the children's portion of premiums for medical/dental insurance coverage;
- the uninsured portion of healthcare costs (dental, medical, orthodontic, optometrist, etc.);
- extraordinary costs for a child to attend primary or secondary schooling (i.e. tutoring, private schooling, etc.);
- expenses for post-secondary education (including books, tuition, and living costs if the child is outside of the parent's home); and,
- "extraordinary" expenses for extracurricular activities.
What is an extraordinary extracurricular activity for one family may not be for another family; in these situations, the Court frequently takes a look at what the family's combined income is to determine if an expense is considered "extraordinary". For example, karate lessons may not be considered an extraordinary expense when an individual earns $75,000.00 per year; however, they may be considered extraordinary when a payor parent earns $25,000.00 per year. The amount that a parent pays for s. 7 or extra expenses is determined as a proportionate shared of the total income earned by the payor parent and the recipient parent. For example, if a payor parent earns $80,000.00 per year and the recipient parent earns $20,000.00 per year, their total income is $100,000.00. The payor parent would be responsible for 80% of the extra expenses and the recipient parent would be responsible for 20% of those extra expenses.
How is a Payor's Income Determined
In determining what a payor's income is, the Court uses the individual's gross income. For individuals who receive a salary and/or wage, the individual's income as reflected on line 150 of their Income Tax Return is used to determine the appropriate income upon which child support would be paid.
In situations where an individual is self employed or an individual who is paid by a corporation in which he or she has an interest, the determination of his or her income is more involved. The Court still looks at their personal income tax return and the amount reflected by line 150. However, in situations where an individual has some interest in a company, it is possible for the Court to add back to that individual's income the pre-tax income of the corporation. Furthermore, when an individual pays other people through his or her corporation, and if he or she does not have an "arm's length" relationship with that individual, some of that money can be added to the individual's income to determine the appropriate amount of child support. It is important to seek the advice of a lawyer/accountant when dealing with individuals who are either self employed or employed through corporations which he or she has an interest. Those individual's income is not necessarily that reflected on the personal income tax return.
At times, the Court can "impute" income or attribute income to an individual in certain situations. This occurs when:
- An individual is intentionally unemployed or under employed;
- An individual does not pay income tax on their income (i.e. they work outside of Canada);
- Income is being diverted;
- The individual has failed to disclose all of the relevant financial information;
- The individual is unreasonably deducting expenses from his/her income; and,
- Other relevant circumstances.
Collecting Child Support
In terms of the collection of support, many recipient parents register with the Maintenance Enforcement Program. Their website offers a step by step guide as to how to register with that program. Once a Court Order for child support is obtained, the recipient parent can take that Court Order and register it with the program. The payor parent then makes payment pursuant to that Court Order to the Maintenance Enforcement Program. If they are late with the payments or if they miss payments, the Maintenance Enforcement Program can take collection steps which include garnishing wages, suspending a person's drivers licence, putting a hold on a individual's passport, etc.
Applying for Child Support
To make an application for child support, a party files the appropriate form of application which is supported by a sworn statement outlining details relating to the child, where the child resides, the payor's income, employment and the recipient's income, etc.
In order to determine a payor parent's income, a further document entitled a Notice to Disclose/Application (Divorce Act) or Request for Financial Information (Family Law Act) can be filed. In those situations, the payor parent would have to produce pay stubs, copies of their last three income tax returns, financial statements for corporations in which they have a 1% or more interest, and additional income information as outlined in that form. If a Notice to Disclose/Application or Request for Financial information is filed, the person requesting the financial information must also disclose the same information.