Even the most amicable divorce proceedings can hit a roadblock when it comes to the issue of child support. The reality is that it’s complex, and based on a variety of factors under provincial and federal law. While we can’t tell you what your support obligation or entitlement will be without delving into the details of your individual situation, we can explain how child support is calculated in Ontario.
Child Support Misconceptions
Some parents feel that, if they’re spending equal time with children, support should be split down the middle. But legislation known as the Child Support Guidelines, put strict formulas in place for most but not all situations.
All right, so we just plug our incomes into a calculator, and it’ll tell us the fair amount of child support, right? Not so fast! It’s more complicated. Here’s what you need to know:
Calculating Child Support
Most of the time, child support amounts are based on the Child Support Guidelines. These include:
- The “table amount” (because it comes from numbers on a spreadsheet or “table”). Each province has its own table, to take into account differences in income tax
- An amount for “special or extraordinary” expenses
Let’s tackle the table amount first. The Child Support Table shows the amount of contribution to the child’s living expenses. It is one big number. It is not broken down between food, clothing housing, transportation etc. It is based on the gross income of the payor (i.e. before taxes and most deductions) and the number of children in the family who qualify. The payor is the spouse who normally does not have the children primarily living with him or her. (Where time-sharing between parents is equal or close to it or where some children reside primarily with one parent and others primarily reside with the other, it is necessary to consider special provisions.)
It’s Not That Simple!
This formula is only as good as the numbers that are input, and this is where people can get off track. For example, do you use gross income from the previous year? Was that year typical or an anomaly? Do you project the current year? Do you average past years? Do you include bonuses? Are there non-cash benefits such as car allowance or stock options that should be considered as part of income? Does your income derive from a business which you own or have an interest in?
The formula can get even trickier if you’re in a “shared custody” situation and the child or children spend 40% or more of their time with one parent. Again, exactly how is 40% calculated? Is it waking hours? Does it include sleeping hours? Hours spent at daycare or school?
And just because Dad has the kids 60% of the time, for example, it doesn’t mean his grocery bill is 60% of what it would have been otherwise or, for that matter, Mom’s grocery bill is only 40%. The Guidelines require us to take into account.
In cases like this, we’d do a double calculation. What does Dad owe Mom in table amount based on his income? What does Mom owe Dad in table amount based on her income? If Dad owes Mom $1200 a month, and she owes him $500, it seems logical that they’d simply subtract and Dad would pay the difference of $700 a month. Then we might an adjustment for the extra costs to both parties of the shared arrangement.
But wait! When it comes to eligibility to share tax deductions and credits, we need to make sure that we are following government requirements including those from the Canada Revenue Agency (CRA).
An experienced family lawyer can help you understand the nuances and ensure the right information is entered into the calculation. This can make a significant difference in the amount of child support for which you are obligated or to which you are entitled.
Special or Extraordinary Expenses
Just when you thought it was complex enough! You have to take into account any special or extraordinary expenses. Under the Child Support Guidelines, these are:
- Extraordinary expenses for a child’s extracurricular activities
- Extraordinary expenses related to a child’s primary education, secondary education, or programs that meet their particular needs
- Child care expenses you incur as a result of your job, an illness, a disability, or educational requirements for employment if your child spends most of their time with you.
- The portion of your medical and dental insurance premiums that cover your child
- Your child’s healthcare needs that exceed $100 per year if those costs are not covered by insurance. Orthodontic care, for instance, is a common one.
Are these costs shared proportionally between parents based on their income? Well… you guessed it: it’s not that simple. We have to look at other factors, such as tax issues.
Say, for example, Mom pays $1400 a month for daycare and Dad is obligated to pay 60%. Ok, fine. But Mom also gets a tax deduction for the day care payment that works out to about $100 a month. They’d share the expense of $1300 a month, not $1400.
Quirks in the Law
There are a lot of intricacies — and quirks — in the child support formula. For example, you pay child support for a child until age 18 or after 18 if they are in school full-time or disabled and unable to live on their own. What if the child moves away from home to go to college? They’re no longer spending their primary time with one parent but not financially independent. So we have to look at different ways to determine proper support contributions for both parents.
These issues are tricky. The easy part is plugging in some numbers and getting a table amount, but don’t miss the subtleties. Many people don’t know how to deal with extraordinary expenses, shared or ‘split’ custody arrangements, and even inputting reliable income figures. And this is completely understandable: it is complicated.
A family lawyer can help you navigate this complex terrain, ensuring that you comply with Ontario and federal guidelines — and that your child/children receive the support they need.