J. Cost of Living Indexation

Author:Julien D. Payne - Marilyn A. Payne

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Under the former judicial discretionary regime of child support, a court had the statutory jurisdiction to index a periodic child support order against inflation in order to provide for a child’s needs.308It is questionable how far the judicial discretion to include an annual cost-of-living adjustment in a child support order has survived the implementation of federal and provincial guidelines, whereby a court must presumptively apply the provincial or territorial table in order to quantify periodic child support, because these tables are not conditioned on the cost of living but on the obligor’s income. As that income changes, so too does the amount of child support prescribed by the applicable table. The Federal Child Support Guidelines are, therefore, self-sufficient and do not require the judicial imposition of a cost-of-living index.309Indeed, as one judge has pointed out, any such addition could result in double recovery.310Nevertheless, some courts have used cost-of-living indexation, perhaps to offset the possibility that former spouses will not avail themselves of the right to annual disclosure under section 25(1) of the Federal Child Support Guidelines or any provincial equivalent.311Different considerations may apply to consensual arrangements that provide for child support payments. In such cases, cost-of-living indexation clauses may be attractive to the spouses or former spouses, although they may become less common except in cases where the child support arrangements were negotiated under the former tax deduction/inclusion regime.

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A cost-of-living indexation clause in a separation agreement does not prevent the finding of a material change of circumstances sufficient to warrant an order for the basic amount of child support under the provincial child support guidelines in addition to designated special or extraordinary expenses.312In Sleiman v. Sleiman,313wherein lump sum child support was ordered, full cost-of-living indexation of the annual income attributed to the obligor was incorporated in actuarial calculations and was judicially endorsed because of the impossibility of determining anticipated increases in the obligor’s annual income.

[308] Weise v. Weise (1992), 44 R.F.L. (3d) 22 (Ont. Ct. Gen. Div.); Reyes v. Rollo, [2001] O.J. No. 5110 (S.C.J.). See, generally, Julien D. Payne, Payne on Divorce, 4th ed. (Scarborough, ON: Carswell, 1996) at 246-47.

[309] Fein v. Fein, [2001] O.J. No. 4554...

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