Child support is money paid by one parent to the other for the support of the children. The amount of child support to be paid depends on the incomes of the parties, the number of children, and the parenting arrangements in place. The Federal Child Support Guidelines set the law for the amounts of child support to be paid in any given situation.
Generally, there are two basic types of child support, monthly child support and child support for special expenses. Monthly child support is calculated by determining the incomes of the parties and the number of children. If the parents are employees, calculating child support should be relatively simple and there are online support calculators that can assist with this.
If one of the parents is self-employed or receives their income through corporate dividends or shares, the calculation of child support can be more complicated. This is because business expenses can be used to artificially reduce income and dividends and shares may not accurately reflect employment compensation. Moreover, if one of the parents lives in another country where they are not taxed at the same rate that they would be in Canada, child support can be increased to reflect this reduced tax. In all of these situations, the income in a parent’s tax return may not accurately reflect the income that should be available for child support.
Special expenses include things like childcare, healthcare costs including dental work, school expenses and extracurricular activities. However, special expenses must be reasonable based on the needs of the children and the financial circumstances of the parents. Child support for special expenses is paid proportionately based on the incomes of both parents. This means that if the parents are both making the same income they both pay 50% of these expenses, but if their incomes are different the percentages will change.
Who pays and who receives child support is based on the parenting arrangements. If one of the parents has the children over 60% of the time they will receive the child support. However, if the children are on a shared parenting schedule, anywhere between 60% with one parent and 40% with the other, child support may be based on a set-off. In a set-off the amount of child support payable by each parent is calculated and the parent who would pay more pays the difference to the other.
Child support can also continue for a child who is over 18 or 19 but who is still dependent on their parents because they are attending University or because they have a disability. In these situations the amounts that are set out in the Child Support Guidelines may not be appropriate and child support may be determined by looking at other factors. These factors may include how much income the child is earning, any scholarships and bursaries available to the child, any RESP’s available, whether the child is living at home or at University, the cost of the child's tuition and living expenses, and the relationship between the child and the parents.
Therefore, sometimes child support is straightforward but often calculating child support can be very complicated. At Crossroads Law, our lawyers are experienced in determining child support in difficult situations. We have helped many parents sort through complex income determination and for our high net-worth clients we often consult with accountants and tax specialists. We have also helped many parents with international child support cases.
Contact us if you would like a consultation about your child support situation.