High Income Earners – Child Support and Incomes Over $150,000
The Child Support Guidelines, which were first adopted federally in 1997, and subsequently shortly after in Alberta have become a strong source for the standardization of child support payments in family law.
There are however particular exceptions that are built into the Guidelines to provide the courts with greater flexibility to determine child support obligations. One such exception is S. 4 of the Guidelines dealing with incomes over $150,000 annually. While the table amount of the Guidelines are revised annually with adjustment for increased cost of living, S. 4 dealing with incomes over $150,000 has remained a static figure since the inception of the Guidelines. As incomes rise from year-to-year, a growing number of individuals are beginning to fall within this category.
There are three common misconceptions surrounding the use of S. 4 of the Guidelines that have significant implications for individuals earning more than $150,000. The first misconception is that per S. 4(b) of the Guidelines, in deferring from the table amounts set out in S.3, a child support payment made pursuant to this section is always a decrease from what the prescribed amount would be under the table amount. While often it may be the case that a court could deem that the table amount is too high, the court may also use its deference under S. 4 to select an amount higher than the table amounts based on the facts of the case. In dealing with this matter, the SCC in Francis v. Baker overturned the Ontario Court of Appeal decision which had interpreted “inappropriate” under S. 4 as meaning “inadequate”, and stated that the word inappropriate can either mean an increase or decrease to the table amounts of the Guidelines.
The second major misconception is that there is a “silver bullet” in determining how child support for incomes over $150,000 will be interpreted by the courts. Clients may be drawn to one case or another that aligns with their perception of how their case should be equally interpreted. A client may find it extremely frustrating to learn that characterization of their family law issue when in court can often be highly divergent to how they envisioned the case. In this regard, clients should be attuned to knowing how their case can be aligned with several comparable cases, dealing with specific sub-components of calculating child support, that their case will depend on the persuasive arguments of their lawyer, and finally, but not least, that a justice’s decision is based on their own reasoned interpretation of the case.
This lends itself to the third major misconception concerning the belief that the court shall follow the table amount of the Guidelines that creates a formula for income up to $150,000 and a subsequent formula for all income above that amount. While the intent of the Guidelines was to ensure practical application and consistency, S. 4 has given the courts the flexibility to apply these prescribed table amounts, as well as other methods for accounting for provision of the welfare of the child or children. Frequently, depending on the facts of the case, the courts have been quite creative in their methods in determining what “appropriate” on-going child support is or even awards for retro-active child support.
The recent Alberta Queen’s Bench case M. (D.G.) v. M. (K.M.), in dealing with retroactive child support on the basis of the father’s income that was over $150,000, the court made its calculation based on a methodology of an “off-set” in lieu of the table amounts. This off-set was calculated on the basis of what the mother had claimed she had spent on raising the children while they were in her custody, and what the father had paid, to date, in child support. This case directly depicts the high discretion that remains with justices to defer from using the table amounts of the Guidelines, in favour of their reasoned accounting.
To date there has been no standardization of when a court should defer from the table amounts in the Guidelines, nor is there an indication that a developing body of cases is being relied upon by justices when deciding to depart from the table amounts. Rather, there continues to be a contextual and liberal approach to dealing with incomes over $150,000, in lieu of a principled/legal theory approach.
The Divorce and Family Law Attorneys at the Calgary partnership of RCM LLP have experience and knowledge in advocating for your claims concerning child support. Our Lawyers are understanding, trained and highly efficient and are here to assist you during the difficult and emotional transition caused by your separation and Divorce. Please contact us today for an appointment.