B. Annual Income over $150,000

• Author: Julien D. Payne - Marilyn A. Payne
• Pages: 364-374

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See note ⁹

Section 4 of the Federal Child Support Guidelines provides two approaches to the assessment of child support where the annual income of the spouse against whom a child support order is sought exceeds $150,000. Pursuant to section 4(a) of the Guidelines, the amount of child support is determinable in accordance with section 3 of the Guidelines, whereby the amount will be ordinarily established by reference to the applicable provincial or territorial table, together with any additional amount that may be payable for special or extraordinary expenses falling within section 7 of the Guidelines.¹⁰The provincial and territorial tables establish a fixed monetary amount of support to be paid by an obligor whose annual income is $150,000. Insofar as the obligor’s income exceeds $150,000, the monthly table amount of child support is increased above that payable at the $150,000 level by a designated percentage of the obligor’s income over $150,000. Pursuant to section 4(b) of the Federal Child Support Guidelines, if the court considers the amount payable under section 3 of the Guidelines to be inappropriate, the amount of child support will be assessed as follows:

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(i) in respect of the first $150,000 of the spouse’s income, the amount set out in the applicable table for the number of children under the age of majority to whom the order relates;

(ii) in respect of the balance of the spouse’s income, the amount that the court considers appropriate, having regard to the condition, means, needs, and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children; and

(iii) the amount, if any, determined under section 7 with respect to special or extraordinary expenses.¹¹The court has no discretion under either section 4(a) or 4(b) of the Guidelines to interfere with the table amount payable in respect of the first $150,000 of the obligor’s annual income. The discretion conferred on the court by section 4(b) of the Guidelines applies only to the obligor’s annual income in excess of $150,000 and the narrow scope of this judicial discretion is not expanded or overridden by section 88(1) of the British Columbia Family Relations Act in cases to which that Act applies.¹²A court may be disinclined to deviate from the applicable provincial table amount of child support where the obligor’s annual income does not vastly exceed $150,000¹³or where the recipient spouse is unable to contribute towards the support of the children.¹⁴Deviation from the applicable provincial table amount of basic child support in cases where the obligor’s annual income exceeds $150,000 is only appropriate under section 4 of the Federal Child Support Guidelines if there is clear and compelling evidence to warrant doing so.¹⁵Although an obligor is not required to call evidence to rebut the presumption in favour of the table amount of child support, such a parent clearly takes the risk that a motions judge will see nothing in the evidence before him to call into question the appropriateness of the table amount.¹⁶The table amount must be ordered, unless it is found inappropriate. What is inappropriate must be determined on the facts of the particular case.¹⁷

A father’s obligation to support additional children born of his current marriage does not warrant deviation from the applicable table amount payable to the children of his previous marriage, where the lifestyle in his current household is higher than that in his previous wife’s household. Furthermore, the fact that the children of his former marriage did not

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enjoy a pre-separation lifestyle equivalent to that which will be achieved by an order for the payment of the applicable table amount of child support does not render the table amount inappropriate where the father’s income has substantially increased over the years following the divorce. A finding under section 4(b)(ii) of the Guidelines that the amount determined under section 3 is "inappropriate" should not be made lightly. The objectives of the Guidelines as defined in section 1 of the Federal Child Support Guidelines will not be promoted if determination of child support in accordance with section 3 is too readily departed from without clear and compelling evidence to warrant doing so. A spouse cannot avail himself or herself of section 4(b) of the Guidelines in the absence of material that satisfies the court that the table amount would be inappropriate. Section 4 of the Guidelines sets out a two-step process to be followed when dealing with an obligor whose annual income exceeds $150,000. First, the court must satisfy itself that the table amount of support respecting the income in excess of $150,000 may be deemed inappropriate. This is a threshold determination and a reason must be articulated why the strict table amount is inappropriate. Only if it is deemed inappropriate, will the court assess support on the income exceeding $150,000, having regard to the condition, means, needs, and other circumstances of the children and the financial ability of each spouse to contribute to that support. There is nothing in section 4(a), however, that precludes a court from considering the factors listed in section 4(b)(ii) of the Guidelines in determining whether the table amount is inappropriate. There is consequently some overlap of consideration in sections 4(a) and (b) of the Guidelines.¹⁸In Francis v. Baker,¹⁹the Supreme Court of Canada held that the meaning of the word "inappropriate" in section 4(b) of the Federal Child Support Guidelines is its ordinary dictionary meaning of "unsuitable" or inadvisable. Courts, therefore, have the discretion to either increase or reduce the amount of child support prescribed by a strict application of the provincial or territorial table insofar as the obligor’s annual income exceeds $150,000. Children must always receive at a minimum the table amount of child support payable on the first $150,000 of their parent’s annual income. They can further expect that a fair additional amount will be ordered with respect to that portion of the parent’s annual income that exceeds $150,000. The closer the paying parent’s income is to $150,000, the more likely it is that the table amount will be ordered.²⁰Child support undeniably involves some form of wealth transfer to the children and will often produce an indirect benefit to the custodial parent but the objectives specified for the Federal Child Support Guidelines do not displace the Divorce Act, which dictates that the maintenance of children, rather than household equalization or spousal support, is the purpose of child support. This is explicitly articulated in section 26.1(2) of the Divorce Act. Courts should not be too quick to find that the table amount of child support is excessive or that it constitutes an unwarranted wealth transfer or spousal support. Need is only one of the factors for the court to consider in determining whether the table amount is inappropriate. There may come a point, however, where the table amount is so much in excess of the children’s reasonable needs that it no longer qualifies as support.²¹The Federal Child Support Guidelines are predicated on a cost estimation of child rearing, rather than on an attempt to equalize familial resources and

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living standards as between the custodial and the non-custodial parent. The party who seeks deviation from the table amount has the onus of rebutting the presumption that the table amount is appropriate.²²This does not compel that party to testify or call evidence and no unfavourable conclusions should be drawn from a failure to do so. A party seeking deviation from the table amount may simply choose to question the evidence of the opposing party. Whatever tactics are adopted, the evidence as a whole must be sufficiently clear and compelling to warrant departure from the table amount. There must be an articulable reason for deviating from the table amount, but the relevant factors will inevitably differ from case to case. The condition, means, needs and other circumstances of the children and the financial abilities of both spouses are designated factors to be taken into account under section 4(b) of the Federal Child Support Guidelines. These factors are relevant both to the initial determination whether the table amount is inappropriate and to the quantification of the appropriate amount of support that should be paid in respect of the obligor’s income in excess of $150,000. Only after examining all the circumstances of the case, including the above designated factors, should a court find the table amount to be inappropriate. The court must be provided with all the necessary information and this will often require child expense budgets that provide some evidence, albeit imperfect, of the child’s needs. This is consistent with section 21(4) of the Federal Child Support Guidelines, which requires the custodial parent to provide certain financial information within thirty days after learning that the non-custodial parent’s annual income exceeds $150,000. There is no universal requirement, however, that custodial parents prepare child expense budgets in all cases in which section 4 is invoked,²³although the more a parent’s income exceeds $150,000, the more likely it is that budgets will be required.²⁴It is a matter that should be left for trial judges to determine on a case by case basis. Where a parent’s annual income exceeds $1 million, a court may conclude that it is unable to assess the appropriate amount of child support according to the criteria defined by the Supreme Court of Canada in Francis v. Baker until a child expense budget is filed.²⁵Where the obligor’s annual income does not greatly exceed $150,000, a trial judge may conclude that the added cost and delay of requiring a budget cannot be justified. Trial judges are not required...