K. Income Information

• Author: Julien D. Payne - Marilyn A. Payne
• Pages: 219-229

Page 219

See note ⁶⁹⁰

Sections 21 to 26 of the Federal Child Support Guidelines provide as follows with respect to the acquisition and disclosure of information concerning income.

Obligation of applicant

21. (1) A spouse who is applying for a child support order and whose income information is necessary to determine the amount of the order must include the following with the application:

    (a) a copy of every personal income tax return filed by the spouse for each of the three most recent taxation years;

    (b) a copy of every notice of assessment or re-assessment issued to the spouse for each of the three most recent taxation years;

    (c) where the spouse is an employee, the most recent statement of earnings indicating the total earnings paid in the year to date, including overtime or, where such a statement is not provided by the employer, a letter from the spouse’s employer setting out that information including the spouse’s rate of annual salary and remuneration;

    (d) where the spouse is self-employed, the following documents for the three most recent taxation years, namely

    (i) the financial statements of the spouse’s business or professional practice, other than a partnership, and

    (ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm’s length;

    (e) where the spouse is a partner in a partnership, confirmation of the spouse’s income and draw from, and capital in, the partnership for its three most recent taxation years;⁶⁹¹(f) where the spouse controls a corporation, for its three most recent taxation years

    (i) the financial statements of the corporation and its subsidiaries, and

    (ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation, and every related corporation, does not deal at arm’s length; and

    (g) where the spouse is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust’s three most recent financial statements.

    Page 220

    Obligation of respondent

    (2) A spouse who is served with an application for a child support order and whose income information is necessary to determine the amount of the order, must, within 30 days after the application is served if the spouse resides in Canada or the United States or within 60 days if the spouse resides elsewhere, or such other time limit as the court specifies, provide the court, as well as the other spouse or the order assignee,⁶⁹²as the case may be, with the documents referred to in subsection (1).

    Special expenses or undue hardship

    (3) Where, in the course of proceedings in respect of an application for a child support order, a spouse requests an amount to cover expenses referred to in subsection 7(1) or pleads undue hardship, the spouse who would be receiving the amount of child support must, within 30 days after the amount is sought or undue hardship is pleaded if the spouse resides in Canada or the United States or within 60 days if the spouse resides elsewhere, or such other time limit as the court specifies, provide the court and the other spouse with the documents referred to in subsection (1).

    Income over $150,000

    (4) Where, in the course of proceedings in respect of an application for a child support order, it is established that the income of the spouse who would be paying the amount of child support is greater than $150,000, the other spouse must, within 30 days after the income is established to be greater than $150,000, if the other spouse resides in Canada or the United States or within 60 days if the spouse resides elsewhere, or such other time limit as the court specifies, provide the court and the spouse with the documents referred to in subsection (1).

    Making of rules not precluded

    (5) Nothing in this section precludes the making of rules by a competent authority, within the meaning of section 25 of the Act, respecting the disclosure of income information that is considered necessary for the purposes of the determination of an amount of a child support order.

    Failure to comply

22. (1) Where a spouse fails to comply with section 21, the other spouse may apply

    (a) to have the application for a child support order set down for a hearing, or move for judgment; or

    (b) for an order requiring the spouse who failed to comply to provide the court, as well as the other spouse or order assignee, as the case may be, with the required documents.

    Costs of the proceedings

    (2) Where a court makes an order under paragraph (1)(a) or (b), the court may award costs in favour of the other spouse up to an amount that fully compensates the other spouse for all costs incurred in the proceedings.

    Adverse inference

    Page 221

23. Where the court proceeds to a hearing on the basis of an application under paragraph 22(1)(a), the court may draw an adverse inference against the spouse who failed to comply and impute income to that spouse in such amount as it considers appropriate.⁶⁹³Failure to comply with court order

24. Where a spouse fails to comply with an order issued on the basis of an application under paragraph 22(1)(b), the court may

    (a) strike out any of the spouse’s pleadings;⁶⁹⁴(b) make a contempt order against the spouse;⁶⁹⁵(c) proceed to a hearing, in the course of which it may draw an adverse inference against the spouse and impute income to that spouse in such amount as it considers appropriate;⁶⁹⁶and

    (d) award costs in favour of the other spouse up to an amount that fully compensates the other spouse for all costs incurred in the proceedings.

    Continuing obligation to provide income information

25. (1) Every spouse against whom a child support order has been made must, on the written request of the other spouse or the order assignee, not more than once a year after the making of the order, and as long as the child is a child within the meaning of these Guidelines, provide that other spouse or the order assignee with

    (a) the documents referred to in subsection 21(1) for any of the three most recent taxation years for which the spouse has not previously provided the documents;

    (b) as applicable, any current information, in writing, about the status of any expenses included in the order pursuant to subsection 7(1); and

    (c) as applicable, any current information, in writing, about the circumstances relied on by the court in a determination of undue hardship.

    Below minimum income

    (2) Where a court has determined that the spouse against whom a child support order is sought does not have to pay child support because his or her income level is below the minimum amount required for application of the tables, that spouse must, on the written request of the other spouse, not more than once a year after the determination and as long as the child is a child within the meaning of these Guidelines, provide the other spouse with the documents referred to in subsection 21(1) for any of the three most recent taxation years for which the spouse has not previously provided the documents.

    Obligation of receiving spouse

    (3) Where the income information of the spouse in favour of whom a child support order is made is used to determine the amount of the order, the spouse must, not more than once a year after the making of the order and as long as the child is a child within the meaning of these Guidelines, on the written request of the other spouse, provide the other spouse with the documents and information referred to in subsection (1).

    Information requests

    Page 222

    (4) Where a spouse or an order assignee requests information from the other spouse under any of subsections (1) to (3) and the income information of the requesting spouse is used to determine the amount of the child support order, the requesting spouse or order assignee must include the documents and information referred to in subsection (1) with the request.⁶⁹⁷Time limit

    (5) A spouse who receives a request made under any of subsections (1) to (3) must provide the required documents within 30 days after the request’s receipt if the spouse resides in Canada or the United States and within 60 days after the request’s receipt if the spouse resides elsewhere.

    Deemed receipt

    (6) A request made under subsections (1) to (3) is deemed to have been received 10 days after it is sent.

    Failure to comply

    (7) A court may, on application by either spouse or an order assignee, where the other spouse has failed to comply with any of subsections (1) to (3)

    (a) consider the other spouse to be in contempt of court and award costs in favour of the applicant up to an amount that fully compensates the applicant for all costs incurred in the proceedings; or

    (b) make an order requiring the other spouse to provide the required documents to the court, as well as to the spouse or order assignee, as the case may be.

    Unenforceable provision

    (8) A provision in a judgment, order or agreement purporting to limit a spouse’s obligation to provide documents under this section is unenforceable.

    Provincial child support services

26. A spouse or an order assignee may appoint a provincial child support service to act on their behalf for the purposes of requesting and receiving income information under subsections 25(1) to (3), as well as for the purposes of an application under subsection 25(7).

    The obligation of a parent to provide income information is triggered by section 21(2) of the Federal Child Support Guidelines at the time when the parent is served with an application for a child support order. This is in contrast to the case where a child support order has already been made, where the obligation arises simply upon a written request being made in accordance with the provisions of section 25 of the Guidelines.⁶⁹⁸The aforementioned provisions establish a new minimum standard for financial disclosure in child...