When Child Support Feels Overwhelming: Understanding Undue Hardship in Canada

By Amanda Marsden, Senior Family Lawyer & Estate Planning Lawyer

In Canada, parents have a legal obligation to financially support their children, even after a divorce or separation. However, what if making those payments feels less like a responsibility and more like an insurmountable burden? If you feel the child support amounts set out in the Federal Child Support Guidelines (the “Guidelines”) is unreasonable, you may wish to consider making a claim for undue hardship. But be warned: undue hardship claims are exceptional and not easily granted. In this blog, we'll delve into the complicated world of undue hardship, explaining what it means and how it could allow for deviations from standard child support payments.

Understanding Undue Hardship

Undue hardship is a statutory exemption that allows parties to deviate from the mandatory base child support payments outlined in Section 3 of the Guidelines. However, it is essential to note that merely being in financial distress is not sufficient to claim undue hardship. To qualify for this exemption, a party must meet specific criteria detailed in Section 10 of the Guidelines.

Defining Undue Hardship

The Guidelines do not provide a precise definition of undue hardship. However, the courts have characterized it as difficulty, suffering, or pain that is excessive or disproportionate. Simply saying you can't afford it or need more money to live usually won't be enough, and general financial stress from making support payments also won't qualify you for a claim of undue hardship.

For context, the Guidelines set the poverty line at $12,000 per year. This means that even if an individual earns only $12,000 annually, the court may still expect them to pay child support - despite their likely struggle to meet their own basic needs at that income level. It’s clear that someone earning $12,000 a year will experience severe financial challenges. However, these financial challenges would not automatically entitle them to a reduction in the support payable. A unique set of circumstances would be required for this extraordinary remedy to be applicable.

The court of appeal even overturned a finding of undue hardship in Henderson v. Micetich, 2021 ABCA 103. That case involved a payor father who was under a consumer proposal that required payments of $700 per month. Given that the mother had remarried, and her new spouse provided a high standard of living for the children, the father made a claim for undue hardship and the mother sought retroactive child support. The court of appeal emphasized that financial difficulty is not necessarily undue or unfair without more evidence. The court also noted that the father’s consumer proposal payments did not take priority over his support obligations and, while a lump sum retroactive child support order would cause immediate difficultly, it was not undue.

The Two-Step Test for Undue Hardship

If a party wishes to make an application for undue hardship, there is a two-step test that must be met.

First, the applicant must provide evidence proving they are facing financial hardship with the current child support payments, or they believe they will face such hardship if payments are required per the Guidelines. If the required child support payments are too high relative to the payor’s financial circumstances, they can file an application claiming undue hardship to request a reduction in child support.

The second part of the test involves demonstrating that the applicant's household would experience a lower standard of living than the other party's household if child support were paid in accordance with the Guidelines.

Reasons for Undue Hardship

In addition to demonstrating undue hardship, the applicant must provide a valid reason for experiencing such hardship. An application for reduced child support payments on undue hardship grounds might fail if the claimant spent their money recklessly or unwisely. The caselaw suggests some circumstances that may lead to undue hardship, including:

  • High levels of debt incurred to support the other parent or child before separation - if the debt is deemed necessary and substantial, it may be a factor in establishing undue hardship. For example, this can arise when one of the parties assumes more responsibility for marital debt. It’s unlikely to be a sufficient factor if debt was incurred due to poor choices on the part of the applicant.

  • Excessive expenses incurred to facilitate access with the child - if the parent paying child support has really high costs to exercise their access or to spend time with their child—like travel expenses because they live far away—courts in Alberta might see this as a valid reason to claim financial hardship. These expenses would need to be quantified in detail. Evidence of high access costs alone, without detailed documentation to substantiate the actual expenses incurred, will likely be deemed insufficient by the courts.

  • Legal obligations to support another adult or child – Alberta caselaw suggests that if a parent has a legal duty to support another adult or child (e.g., an aging parent or a child from a previous relationship), and this obligation creates a significant financial burden, it may be valid grounds for claiming undue hardship. Again, the evidence would need to be incredibly specific, simply stating that there are costs associated with other legal obligations will not result in a successful claim. If someone wants to claim financial obligations to their aging parent, they may need to provide evidence of caregiver/medical costs that their parent is unable to pay for themselves.

  • Substantial income disparity between households - courts in Alberta have considered cases where there is a significant income disparity between the households of the paying parent and the recipient parent. If the receiving parent's household enjoys a substantially higher standard of living, this income disparity may contribute to an undue hardship claim. If you're interested in learning more about income disparity and how it affects child support, be sure to check out the comprehensive section that follows.

  • Disability or health issues – the Alberta courts have also recognized that disabilities or significant health issues may limit an individual’s earning capacity and increase their expenses, which may provide valid grounds for an undue hardship claim.

The above list is not exhaustive and other valid reasons may be considered. Furthermore, even if one of the above situations is applicable, the case for undue hardship may not be established. Consideration of each case is contextual and relies on an assessment of the specific circumstances.

The Standard of Living Test

In circumstances where there is a substantial disparity between the household income of the paying parent and the recipient parent, the courts will apply the ‘standard of living test’. In essence, this test is used to assess whether the payment of child support according to the Guidelines would result in a significant disparity in the parties' respective standards of living. If it is determined that the household of the recipient of support enjoys a substantially higher standard of living, this may support a claim of undue hardship, justifying a deviation from the standard child support payments.

The test involves a multi-step process to evaluate the financial circumstances of both parties and compare their respective household incomes. Here are the key steps typically involved in the standard of living test for undue hardship claims:

  1. Determining annual incomes - the first step is to calculate the annual incomes of everyone living in both households. This includes not only the income of the paying and receiving parties but also any other individuals contributing to the household, such as new partners.
  2. Adjusting income - after calculating the parties’ annual incomes, the next step is to make necessary adjustments to those incomes. This involves deducting appropriate expenses and including the appropriate support from each person's income. The goal is to arrive at a fair representation of the available income for each household.
  3. Combining adjusted incomes - once the adjusted annual incomes for all individuals in both households has been determined, they are combined to calculate the total household income for each one. This step provides a comprehensive view of the economic resources available within each household.
  4. Low-Income measure amount - the next step involves determining the "low-income measure amount" for each household using the low-income measures table provided in the Guidelines. This amount is based on household size and the local low-income threshold.
  5. Household income ratio - with the low-income measure amount established for each household, the next step is to divide the household income by the appropriate low-income measure amount. This calculation results in a household income ratio for each household.
  6. Comparing ratios - finally, the two ratios are compared to determine which household has a higher ratio. If the paying party's household has a higher ratio, it suggests that they have a higher standard of living than the receiving party's household.

It's important to note that the standard of living test is complex and requires detailed financial information from both parties. Meeting this evidentiary burden requires thorough preparation and attention to detail. Parties seeking to establish undue hardship in Alberta family law cases should consult with a knowledgeable family lawyer who can guide them through the process and ensure that all relevant financial data is properly presented and considered by the court.

Undue hardship claims in child support cases offer a pathway for parties to deviate from standard support payments, but they are subject to stringent criteria. Understanding the two-step test, providing valid reasons for undue hardship, and successfully meeting the standard of living test are all crucial elements in building a strong case. It is essential to consult with experienced family law professionals to navigate this complicated area effectively. Ready to navigate this complex area of family law with confidence? Schedule your free 20-minute consultation with a family lawyer from Crossroads Law today.

The information contained in this blog is not legal advice and should not be construed as legal advice on any subject. The information provided in this blog is for informational purposes only.