Criteria and objectives of child support
| Author | Julien D. Payne, Marilyn A. Payne |
| Pages | 1-19 |
CRITERIA AND OBJECTIVES
OF CHILD SUPPORT
A. INTRODUCTION
Before the implementat ion of the Federal Child Support Guidelines i n Canada on May ,
, empirical data in Canada ind icate that a divorced custodia l parent was unlikely to re-
ceive more than percent of the net income of the paying spouse and parent as spousal a nd/
or child support. It is not surprising , therefore, that single mothers and their children repre-
sented a disproportionate percentage of the poverty classes. is societal problem, which
has not been confined to Canada, led to the implementation of mandatory chi ld support
guidelines in Engla nd, Australia, New Zealand, the United States, as well a s in Canada. e
Guidelines are premised on objectively based numerical indicators of the specific amount
of child support that an indiv idual should normally pay by agreement or court order on
marriage breakdown or divorce or to a single parent. As of May , , child support rights
and obligations under the Divorce Act underwent a radical change. e previous child sup-
port regime applying under the Divorce Act, which was premised on the exercise of an u n-
fettered judici al discretion, was rej ected by the govern ment as unpredictable, incon sistent,
costly, and unfair to chi ldren. Recognition of these limit ations of the judicial discretiona ry
regime led to major research studies being undertaken by the Federal/Provincial/Territor-
ial Family Law Comm ittee for several years prior to the legislative and regulatory changes.
ese studies produced changes in the following four key areas. First, child support paid
under orders or agreements made on or after May , is no longer taxed as income to the
recipient, nor is it tax deductible by the payor. Second, the Federal Child Support Guidelines
provide fixed table amounts of monthly child support t hat help parents, lawyers, and judges
to set fair and consistent chi ld support in divorce cases. e table amounts take the new
tax rules into account. ird, the federal government has implemented several measures to
promote the payment of support in full and on time. Fourt h, some of the savings from the
income tax changes have been applied to assist the ch ildren of working poor families. Fixed
schedules for the determination of child support can promote (i) simple and inexpensive
administrat ive procedures for assessing the amount of child support; (ii) consistency of
CHILD SU PPORT GUIDELINES IN CA NADA,
amounts in comparable fami ly situations; and (iii) higher child support payments that more
realistical ly reflect the actual costs of raising ch ildren. ey are unlikely, however, to resolve
the economic crises of separation and divorce for women and children. e war on povert y
requires more than piecemeal reform of child support rig hts and obligations, although the
Guidelines may reduce the economic plight of custodial pa rents to some degree.
B. RELEVANCE OF INCOME TAX
Prior to May , , periodic child support payments made pursuant to a court order or
written agreement after ma rriage breakdown were deductible from the taxable income of
the payor under sections (b), (c), and . of the Income Tax Act and were taxable as
income in the hands of the payee under sections ()(b) and (c), provided that such pay-
ments were made to the custodial parent and not to the child ren directly. As of May , ,
Canada shifted to a n income tax system whereby the payor no longer receives a deduction
for payments made and the receiving parent no longer pays tax on child support received
under any new order or agreement or pursuant to any variation made after April , of
a pre-exist ing order or agreement.
e new tax rules do not apply to orders or agreements made before May , unless
(a) a court order or agreement made on or after May , changes the amount of child
support payable under an existing agreement or court order; (b) the court order or agree-
ment specifically provides that the new ta x rules apply to payments made after a specified
date which cannot be earlier than April , ; or (c) the payor and the recipient have
both signed and filed a form with the Canada Revenue Agency stating that the new tax
rules apply to payments made after a specified date that cannot be earlier than April ,
. e i ncome tax consequences of child support agreements and orders made before
May , generated significant savi ngs for many families encountering d ivorce and will
continue to do so until they are superseded by new agreements executed or orders granted
after May , . Variation of a pre-Guidelines agreement after May , attracts the
new income tax regime and payments fal ling due after the va riations are payable in after-
tax dollars. With the implementation of the Federal Child Support Guidelines, a court is
not authorized to vary an order piecemeal by merely tacking on speci al or extraordinar y
expenses to a pre-existing order. e order, if varied, must be varied in accordance w ith the
Guidelines and this automatical ly triggers the new tax regime u nder which child support
R.S.C. (th Supp.), c. .
ibaudeau v. Canada (Minister of Nat ional Revenue), [] S.C.R. .
Del Puppo v. Del Puppo, [] B.C.J. No. (S.C.); Hilchie v. Hilchie, [] N.S.J. No. (Fam. Ct.);
Acorn v. DeRoche, [] P.E.I.J. No. (T.D.). But see Fung-Sunter v. Fabian, [] B.C.J. No. (S.C.),
citing Revenue Canad a Pamphlet on Support Payments, P(E) Rev. at .
Fontaine v. Fontaine, [] B.C.J. No. (C.A.); Gordon-Tennant v. Gordon-Tennant, [] O.J. No.
(Gen. Div.); Richard v. Richa rd, [] S.J. No. (Q.B.) (unintended income ta x consequences of
amended agreement found to c onstitute sufficient reason to g rant order for child support in accord ance
with the Federal C hild Support Guidelines); compare Schipper v. Maher, [] M.J. No. (Q.B.) (ret-
roactive vari ation of child support arrea rs that accrued before and aft er implementation of Federal Child
Support Guidelines). See also Warbinek v. Can ada, FCA , citing Holbrook v. Canad a, FCA
; Chadwick v. Cana da, FCA .
Baggs v. Baggs, [] O.J. No. (Gen. Div.); Dixon v. Hinsley, [] O.J. No. (Ct. J.).
Kovarik v. Canada, [] T.C.J. No. ; Callwood v. Canada, [] F.C.J. No. (C.A.); W.J.H. v.
C.T.C., [] A.J. No. (Q.B.); C. v. S., NBQB .
To continue reading
Request your trial