Criteria and Objectives of Child Support
| Author | Julien D. Payne - Marilyn A. Payne |
| Pages | 1-23 |
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 Ca nada indicate that a divorced custodia l parent was unlikely to
receive more than twenty percent of the net income of the paying spouse and parent as
spousal and/or child support. It is not surprising, therefore, that single mothers and their
children repre sented a dispropor tionate percentage of the poverty classes. is societa l
problem, which has not been confined to Canada, led to the implementation of mandatory
child support guidelines i n England, Australia, New Zealand, a nd the United States, as well
as in Canada. e guideli nes are premised on objectively based numerical indicators of the
specific amount of child support that an i ndividual should normally pay by agreement or
court order on marriage breakdown or divorce or to a single parent.
As of May , , child support rights a nd obligations under the Divorce Act underwent
a radical change. e previous chi ld support regime applying u nder the Divorce Act, which
was premised on the exercise of an un fettered judicial discretion, was reject ed by the gov-
ernment as unpredictable, inconsistent, cost ly, and unfair t o children. Recognition of these
limitations of the judicial d iscretionary regime led to major research studies being under-
taken by the Federal/Provincial/Territorial Fami ly Law Committee for several years prior
to the legislative and regulatory cha nges. ese studies produced changes in the following
four key areas. First, child support pa id 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 Suppor t Guidelines provide fixed table amounts of monthly child
support that help parents, lawyers, and judges to set fair and consi stent child support in
divorce cases. e table amounts take the new ta x rules into account. ird, the federa l
government has implemented several measures to promote the payment of support in full
and on time. Fourth, some of the saving s from the income tax changes have been applied to
assist the children of working po or fami lies.
CHILD SU PPORT GUIDELINES IN CA NADA,
Fixed schedules for the determination of child support ca n promote () simple and in-
expensive administ rative procedures for assessing the amount of child support; () con-
sistency of amounts in comparable fam ily situations; and () 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 poverty re quires more than piece meal reform of child suppor t rights and obligat ions, al-
though the Guidelines may reduce the economic plight of custodi al parents 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 an 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 agree-
ments made before May , unless () a court order or agreement made on or after May ,
changes the amount of child support payable under an existing agreement or court
order; () the court order or agreement specifically provides that the new tax rules apply
to payments made after a specified date which cannot be earlier than April , ; or ()
the payor and the recipient have both signed and filed a form with the Canada Revenue
Agency stating that the new tax r ules apply to payments made after a specified date that
cannot be earlier than Apri l , . e income tax consequences of child support agree-
ments and orders made before May , generated significant savings for many families
encountering divorce and will continue to do so unti l they are superseded by new agree-
ments executed or orders granted after May , . Variation of a pre-Guidelines agree-
ment after May , attracts the new income tax regime and payments falling due after
the variation are payable in af ter-tax dollars. With the implementation of the Federal Child
Support Guidelines, a cou rt is not authorized to vary a n order piecemeal by merely tack-
ing on special or extraordin ary expenses to a pre-existing order. e order, if varied, must
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 Can ada 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 t ax consequences
of amended agreement found to c onstitute sufficient reason to g rant order for child support in accor-
dance with the Fe deral Child Support Guidelines); compare Schipper v. Maher, [] M.J. No. (Q.B.)
(retroactive var iation of child support arrea rs that accrued before and af ter implementation of Federal
Child Support Guidelines). See al so Warbinek v. Canada, [] F.C.J. No. (C.A.), citin g Holbrook v.
Canada, FCA .
Baggs v. Baggs, [] O.J. No. (Gen. Div.); Dixon v. Hinsley, [] O.J. No. (Ct. J.).
Kovarik v. Canad a, [] 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 .
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