J. Judicial Discretion in Cases of Undue Hardship Circumscribed by Comparison of Standard of Living in Respective Households

• Author: Julien D. Payne - Marilyn A. Payne
• Pages: 347-355

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A finding of undue hardship within the meaning of section 10 of the Federal Child Support Guidelines does not require the court to deviate from the amount of child support that would be ordered in the absence of undue hardship. A finding of undue hardship simply provides the court with the discretionary power to deviate from the norm.²⁰⁶There will be cases where the court will be faced by circumstances in which both households are facing undue hardship. In these circumstances, the court might decide in favour of one of the affected parties, for example, the child, or it might seek to balance the competing interests of the respective households. However, it is not possible for the court to deviate from the norm under sections 3 to 5 or 8 or 9 of the Federal Child Support Guidelines, if the household of the spouse pleading undue hardship would, after payment of the normal amount under the Guidelines, have a higher standard of living than the household of the other spouse²⁰⁷or spouses.²⁰⁸Such a case would fall subject to section 10(3) of the Guidelines, which specifically provides as follows:

Standards of living must be considered

10(3) Despite a determination of undue hardship under subsection (1), an application under that subsection must be denied by the court if it is of the opinion that the household of the spouse who claims undue hardship would, after determining the amount of child

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support under any of sections 3 to 5, 8 or 9, have a higher standard of living than the household of the other spouse.

There is nothing in section 10(3) of the Guidelines to prevent a court from taking account of the relative cost of living in two countries but relevant evidence must first be available to enable the court to undertake the comparison.²⁰⁹Pursuant to section 10(4) of the Federal Child Support Guidelines, in comparing standards of living for the purpose of section 10(3), the court typically uses the comparison of household standards of living test set out in Schedule II of the Guidelines.²¹⁰Schedule II provides as follows:

SCHEDULE II

(Subsection 10(4))

COMPARISON OF HOUSEHOLD STANDARDS OF LIVING TEST

Definitions

1. The definitions in this section apply in this Schedule.

   average tax rate

   "average tax rate" [Repealed, SOR/2000-337, s. 7].

   child

   "child" means a child of the marriage or a child who:

   (a) is under the age of majority; or

   (b) is the age of majority or over but is unable, by reason of illness, disability or other cause to obtain the necessaries of life.

   household

   "household" means a spouse and any of the following persons residing with the spouse:

   (a) any person who has a legal duty to support the spouse or whom the spouse has a legal duty to support;

   (b) any person who shares living expenses with the spouse or from whom the spouse otherwise receives an economic benefit as a result of living with that person, if the court considers it reasonable for that person to be considered part of the household; and

   (c) any child whom the spouse or the person described in paragraph (a) or (b) has a legal duty to support.²¹¹taxable income

   "taxable income" means the annual taxable income determined using the calculations required to determine "Taxable Income" in the T1 General form issued by The Canada Revenue Agency.

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2. The comparison of household standards of living test is as follows:

   STEP 1

   Establish the annual income of each person in each household by applying the formula:

   A - B - C

   where:

   A is the person’s income determined under sections 15 to 20 of these Guidelines, and

   B is the federal and provincial taxes payable on the person’s taxable income. Where the information on which to base the income determination is not provided, the court may impute income in the amount it considers appropriate.

   C is the person’s source deductions for premiums paid under the Employment Insurance Act and contributions made to the Canada Pension Plan and the Quebec Pension Plan.

   Where the information on which to base the income determination is not provided, the court may impute income in the amount it considers appropriate.²¹²STEP 2

   Adjust the annual income of each person in each household by:

   (a) deducting the following amounts, calculated on an annual basis:

   (i) any amount relied on by the court as a factor that resulted in a determination of undue hardship, except any amount attributable to the support of a member of the household that is not incurred due to a disability or serious illness of that member;

   (ii) the amount that would otherwise be payable by that person in respect of a child to whom the order relates, if the pleading of undue hardship was not made;

   (A) under the applicable table, or

   (B) as is considered by the court to be appropriate, where the court considers the table amount to be inappropriate;

   (iii) any amount of support that is paid by the person under a judgment, order or written separation agreement, except:

   (A) an amount already deducted under subparagraph (i), and

   (B) an amount paid by the person in respect of a child to whom the order referred to in subparagraph (ii) relates; and

   (b) adding the following amounts, calculated on an annual basis:

   (i) any amount that would otherwise be receivable by the person in respect of a child to whom the order relates, if the pleading of undue hardship was not made;

   (A) under the applicable table, or

   (B) as is considered by the court to be appropriate, where the court considers the table amount to be inappropriate;

   (ii) any amount of child support that the person has received for any child under a judgment, order or written separation agreement.²¹³

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   STEP 3

   Add the amounts of adjusted annual income for all the persons in each household to determine the total household income for each household.

   STEP 4

   Determine the applicable low-income measures amount for each household based on the following:

   Low-income Measures

   Household Size Low-income Measures Amount

   One Person

   1 adult $10,382

   Two persons

   2 adults $14,535 1 adult and 1 child $14,535

   Three persons

   3 adults $18,688 2 adults and 1 child $17,649 1 adult and 2 children $17,649

   Four persons

   4 adults $22,840 3 adults and 1 child $21,802 2 adults and 2 children $20,764 1 adult and 3 children $20,764

   Five Persons

   5 adults $26,993 4 adults and 1 child $25,955 3 adults and 2 children $24,917 2 adults and 3 children $23,879 1 adult and 4 children $23,879

   Six Persons

   6 adults $31,145 5 adults and 1 child $30,108 4 adults and 2 children $29,070 3 adults and 3 children $28,031 2 adults and 4 children $26,993 1 adult and 5 children $26,993

   Seven Persons

   7 adults $34,261 6 adults and 1 child $33,222

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   5 adults and 2 children $32,184 4 adults and 3 children $31,146 3 adults and 4 children $30,108 2 adults and 5 children $29,070 1 adult and 6 children $29,070

   Eight Persons

   8 adults $38,413 7 adults and 1 child $37,375 6 adults and 2 children $36,337 5 adults and 3 children $35,299 4 adults and 4 children $34,261 3 adults and 5 children $33,222 2 adults and 6 children $32,184 1 adult and 7 children $32,184

   STEP 5

   Divide the household income amount (Step 3) by the low-income measures amount (Step 4) to get the household income ratio for each household.

   STEP 6

   Compare the household income ratios. The household that has the higher ratio has the higher standard of living.

   For the purpose of the comparison of the household standards of living test under Schedule II of the Ontario Child Support Guidelines, the portion of social assistance received on behalf of the children by the custodial parent is not to be included in the recipient’s adjusted annual income under Schedule III of the Guidelines.²¹⁴Use of Schedule II of the Federal Child Support Guidelines is not mandatory when a court undertakes the required comparison of the respective household living standards in light of a finding of undue...