What is the Alberta Child Support Recalculation Program?
Camille Boyer, Calgary Family Lawyer
The Alberta Child Support Recalculation Program assists eligible parents who decide to use to the Program to recalculate their child support each year. Rather than having to meet with family lawyers or go back to Court each year, the Alberta Child Support Recalculation Program offers an easy and affordable alternative. Despite its benefits, the Alberta Child Support Recalculation Program is under-utilized by separated parents in Alberta. This may be because most people are not aware of the Program, or they do not understand how it works.
Child support Orders granted in Alberta must contain one of two Child Support Recalculation Program clauses: either a clause indicating the Order can be recalculated by the Program, or one indicating that it cannot be recalculated by the Program. If an Order states that it cannot be recalculated by the Child Support Recalculation Program, but a parent wishes to use the Program, they will need to obtain a new Court Order.
Once a person has a Child Support Order stating that it can be recalculated by the Alberta Child Support Recalculation Program, either the payor or the recipient of support can register with the Program. There is a service fee of $77 per recalculation and the Child Support Order can only be recalculated by the Child Support Recalculation Program on or after the anniversary date of the Order each year. For example, if an Order was granted on April 20, 2019, the first anniversary of the Order is April 20, 2020. The parents can then continue to request a recalculation each year on or after April 20.
When a recalculation commences, the Alberta Child Support Recalculation Program requires income information. If both parents’ incomes are relevant to the recalculation, both must be provided. This would include the previous year’s income tax returns and notice of assessment. If a parent fails to provide their income information to the Program, they can be deemed to have an automatic income increase of up to 25%.
Once an Order is recalculated by the Alberta Child Support Recalculation Program, and so long as neither party files a Notice of Objection to the recalculation, the revised child support amount can then be enforced by the Maintenance Enforcement Program (“MEP”). However, registration with MEP is not required to utilize the Alberta Child Support Recalculation Program, as the parents may have elected to make payments of support directly to one another.
One of the difficulties with the Child Support Recalculation Program is that some of the eligibility requirements may mean that the parents are not able to use the Program, even if they would like to. Firstly, the Program requires that both parents reside in Alberta. The only exception to this rule is if the payor resides in Alberta and the recipient’s income is not applicable to the recalculation. This would typically result from a Child Support Order which has a flat-rate payable for section 7 expenses, or is silent on section 7 expenses (section 7 expenses are costs for children’s child care, health and dental needs, extracurricular activities and education). If the parents are sharing section 7 expenses the normal way which is proportionate to their incomes, then both of their incomes are required for a recalculation and they must both reside in Alberta to be eligible for the Child Support Recalculation Program.
The Alberta Child Support Recalculation Program also will not recalculate a Child Support Order where one of the parties’ incomes was imputed by the Court (when the Court makes up a person’s income). If this is the case, the parents will need to return to Court if they wish to review and recalculate their Child Support Order. Similarly, if the Child Support Order is an interim Order, has a specific Court date set for a review of the Order, or is “without prejudice” or “pre-disclosure”, the Child Support Recalculation Program will generally not recalculate the Order.
Also, if a parent earns non-taxable income or controls their earnings through a private corporation, the Alberta Child Support Recalculation Program will decline to recalculate their Child Support Order. Even if the parents attempt to structure their Order such that additional income information reflecting corporate or non-taxable income be provided to the Child Support Recalculation Program, the Child Support Order will still be ineligible for the Recalculation Program. This is because the Recalculation Program is limited in its ability to determine income to that which is reflected on a person’s personal tax returns and Notice of Assessment. Often, there are situations where someone’s income tax return does not accurately reflect their true income. In these cases, the Child Support Recalculation Program is not able to recalculate the Child Support Order and the parties will likely need to re-attend Court to ask a judge to determine income.
However, it is possible for a parent to still be eligible for recalculation if their income is not the standard employee/T4 income. If a party operates a business which is not incorporated and is only owned by that person (i.e., a ‘sole proprietorship’), and if there is minimal income or minimal expenses resulting from that business, the Alberta Child Support Recalculation Program may be able to recalculate support. An example would be a contractor who has minimal eligible expense deductions, meaning their gross income is likely a reasonable indication of their actual income for the purposes of child support. Another example would be a person who earns a small amount of supplemental income from a home-based business, in addition to their full time employment.
In either event, due to the nature of self-employment income, the Alberta Child Support Recalculation Program will likely require the other parent to consent to the use of the self-employed parent’s income when recalculating child support, particularly if the Recalculation Program notes that the self-employment income disclosed will not benefit the other parent, or their earnings or expenses are not considered minimal, or if their tax return reveals earnings from a partnership or corporation.
With the impacts of COVID-19 still being felt heavily by many parents in Alberta, and significant drops in income across the country, it is possible that while a recalculation by the Alberta Child Support Recalculation Program accurately captures a parent’s income from 2019, the new payment amount may be much higher than that parent is currently able to afford. If this is the case, it is imperative to speak with a lawyer as soon as possible. The Alberta and BC family lawyers at Crossroads Law have significant experience dealing with adjustments to child support during the pandemic as well as working with the Maintenance Enforcement Program. If you are seeking an adjustment to child or spousal support give us a call now for your free consultation.