Family law can be a complicated area of legal practice, one that is characterized by intense emotion, personal conflict and at times confusion about how to proceed.
When two parents separate, the issue of child maintenance frequently arises. Will one of the parents be entitled to make a claim for the payment of child maintenance from the other? The general rule is that the parent with whom the child or children are residing will usually be entitled to make a claim for child maintenance from the “non-primary” resident parent. The problem is that it is not always easy to determine whether a parent is or is not the primary resident parent. A general rule of thumb is that if a child is residing with a parent for more than sixty percent of the time, that parent is usually the primary resident parent and is most likely entitled to claim child maintenance from the other parent.
If a child is residing primarily with one parent, then it is possible to look to the Federal Child Support Guidelines to get an idea of how much child maintenance may be payable by the non-primary resident parent. The Federal Child Support Guidelines provide a set of Tables which specify the amount of child maintenance payable by a parent based on the gross annual income of that parent as disclosed in Line 150 of his or her Income Tax Return. The Federal Child Support Guidelines for BC may be accessed on the internet at http://www.justice.gc.ca/. These Guidelines are legislated and are relied on by the Courts to determine the amount of maintenance payable in a given circumstance. Child maintenance is not a tax deductible payment from the income of the paying parent and is not taxable in the hands of the receiving parent.
Although the amount of maintenance payable in many cases may be fairly easily determined by reference to the Federal Child Support Guidelines tables, not all cases will fall within the amounts provided for in the Guideline tables.
For example, where the child routinely resides one week with one parent and the following week with the other, the table amounts provided for in the Federal Child Support Guidelines are not easily applied. In these circumstances, there is an argument to be made that the Guideline amounts should not be applied as both parents are contributing equally to the maintenance of the child. There may be a similar argument made regarding the application of the Guidelines where there are two children, with each parent having the care of one child. The question becomes whether the residency of the two children in such a case cancels out the requirement that either of the parents should pay maintenance for the children.
The solution in such scenarios is provided for in the Federal Child Support Guidelines by looking at the income of both parents and determining the maintenance table amount payable by each parent based on their respective incomes. The parent with the higher income will likely end up paying a “set off” to the parent with the lower income. The amount of the set off may be determined by subtracting the table amount payable by the lower income parent from the amount payable by the higher income parent. The higher income parent will end up paying the difference in these two table amounts. If both parents in such circumstances have the same gross annual income, then there will be no set off amount, and no maintenance payable.
An issue which frequently arises in child maintenance matters is determining what the income of a parent is for purposes of the Federal Child Support Guidelines. Parents who are self employed and run their own business may be able to claim expenses against their income which have the effect of reducing their reported taxable income. Self employment income is an area which causes much litigation in child support applications. In such cases a Court may make a finding that the income of that parent is higher than is being disclosed in Line 150 of his or her Income Tax Return and impute a higher income to the self employed parent. Perhaps, by way of example, a self employed parent has claimed 100% of a motor vehicle expense as a deduction from income, although a portion of that deduction also covers that parent’s personal use of the vehicle. In such a case, it would be reasonable for a Court to impute some additional income to the self employed parent in order to determine what his or her actual income is for purposes of the Child Support Guidelines. On the other hand, the income of a parent who receives a T4 for all of his or her income is determined by adding up the gross income in all of the T4s. If a parent has only one source of T4 income, then that income is relatively easy to determine and is likely to be accurately reflected in the Line 150 entry on his or her Income Tax Return.
There are many other issues which can impact child maintenance, such as whether a step parent should pay the full amount of maintenance prescribed by the Guidelines, whether a parent should pay more than the Guideline amount to cover a child’s extraordinary expenses, or even whether a particular child falls within the legal definition of “child” at all. Issues like these can make it difficult for separating parents on their own to come up with reasonable and appropriate maintenance arrangements for their children. A lawyer can review all the relevant facts in a particular case and give advice on what amount of child maintenance may be appropriate.