Child Support is not optional
Most separating or separated parents are aware that child support is mandatory. Unfortunately, fewer parents are aware of how the court can and should reach a decision regarding how much child support they should pay. The Federal Child Support Guidelines (the “Guidelines”) are meant to simplify the process of calculating child support, however, there are pitfalls for the unwary. This post will address one of these pitfalls, Section 3 support and its counterpart, the claim of Undue Hardship.
How child support is calculated – Federal Child Support Tables
The Federal Divorce Act mandates that courts must ensure reasonable arrangements have been made for the support of any children of the marriage, having regard to the applicable Guidelines. The Family Law Act (of Alberta) similarly requires a court to adhere to the Guidelines whenever making a child support order.
Section 3 of the Guidelines sets out the presumptive rule for calculating child support according to ‘Table’ amount set out in the province-specific Federal Child Support Tables (the “Tables”). The Tables are designed for separated parents, who have a parenting arrangement in which one parent has the child(ren) less than 40 percent of the time, to easily determine how much they should be paying in child support to the primary parent.
The Tables are designed to be straightforward. Simply find the Table that corresponds to the number of children of the relationship, follow the column down to your yearly income, look across to the corresponding child support column and the support amount is indicated. So, for example, a non-custodial parent in Alberta with two children making $60,000 per year, and who has care of the children less than 40 percent of the time, is required to pay $850 per month. A parent making $150,000 with 3 children is required to pay $2,736.
What if the Table amount of child support is more than you can pay?
While the Tables are, in a sense, user friendly, they do not consider the circumstances of the child support paying parent (the “Payor Parent”) beyond their income. The Tables do not consider the financial burdens of the Payor Parent, nor support from a partner of the Payee Parent’s household. As such, strict application of the Table amounts, without consideration of intervening financial circumstances of both parents, can become a highly prejudicial application of the law.
Fortunately, the Guidelines do leave the courts with a certain amount of discretion to consider the financial circumstances that may arise for separated parents that diminish the Payor Parent’s ability to pay or reduce the Payee Parent’s need for child support. This discretion falls under section 10 of the Guidelines and is referred to as Undue Hardship.
What counts as evidence of undue hardship?
Not all circumstances that diminish a Payor Parent’s ability will be considered relevant to a claim of Undue Hardship. Section 10(2) of the Guidelines sets out the circumstances that are considered relevant to an Undue Hardship claim including:
- unusually high levels of debt that were incurred prior to separation
- unusually high expenses in exercising access to the child(ren)
- a duty to support another person or child, or
- support for a person that is ill or disabled.
In essence, an Undue Hardship claim does not include poor money management following separation.
The “Standards of Living Test”
The Guidelines apply a further hurdle to a successful Undue Hardship claim, and that is the mandatory ‘Standards of Living Test’ (the “Test”). If the Test determines that the Payor Parent’s household standard of living is less than the payee parent’s household the court may reduce the amount of child support to be paid.
In basic terms, the Standards of Living Test calculates each household’s net income and deducts any amount that would fall under the considerations in Section 10 or equivalent considerations. The Test then adds the amount of child support that would be payable if the undue hardship claim was not made to the Payee Parent’s household and subtracts the same from the Payor Parent’s household. The Test then divides the net income amount by a ‘low income measure’ that factors in household size to arrive at a household income ratio. The higher household income ratio has the higher standard of living.
In sum, when calculating child support obligations that are applicable to the Guidelines in a divorce or separation, the analysis may start at the Tables, but it should not end there. Parents who are likely to have a child support obligation need to be aware of their legitimate expenses and also should be aware of the other parent’s household income before agreeing to a child support amount, or before an application to the court regarding child support.
The child support tables are helpful but they do not necessarily provide the full story
Child support is an essential component when separating parents undergo the difficult process of structuring a parenting relationship. Full disclosure of the financial circumstances of both households can ensure the financial obligations of each parent are fair, and assist the parties in maintaining a parenting relationship based on good faith in the best interests of the child(ren).
If you have questions about child support Contact Us. We can walk you through the process and our lawyers will ensure child support arrangements consider all relevant issues so that you can focus on what matters most – effectively parenting your children.