Child support is calculated pursuant to the Federal Child Support Guidelines. It’s often relatively easy to calculate a parent’s child support obligations using an online calculator.
However, this calculation can become complicated if the payor of child support is self-employed or has a fluctuating income. A payor’s income might fluctuate due to the nature of their job, temporary unemployment, or non-recurring income, such as capital gains or a severance.
When a payor’s income fluctuates, the courts may use his or her most current income to calculate ongoing support, or the court may use the payor’s average income over the last three years.
Loss or Significant Reduction of Income
A sudden and unexpected loss of employment is always stressful. If you have child support (and/or spousal support) obligations, you may think that your support obligations should be suspended until you find new employment. Unfortunately for payors, it’s not that simple. If it were, it would be too easy for parents to avoid their support obligations by becoming intentionally unemployed or under-employed.
When a payor loses his or her income or it reduces significantly, that person needs to prove that the reduction in their income is not a just a short-term situation and that they are using their best efforts to find new employment with a similar salary. Whether the situation is short-term or ongoing is somewhat subjective. The courts have said that three months is not long enough, but nine months is. Anything over 6 months is arguably “ongoing” and warrants a review based on the material changes of circumstances.
To prove that your situation is long-term and out of your control, you will likely need to file an Affidavit. An Affidavit is a written declaration or statement that is sworn or affirmed before a person who has authority to administer an oath. An Affidavit typically includes several Exhibits to substantiate the deponent’s claims in his or her Affidavit. Your Exhibits might include a letter from your employer, proof of your job applications, or proof of an illness or injury that is preventing you from earning what you previous earned.
If you are successful in proving that the reduction to your income is significant, ongoing, and beyond your control, your child support obligation might be based on your current income or based on your average income over the last three years.
If you are unable to prove that the change to your financial situation is beyond your control, the court will likely “impute your income” to what you are capable of earning and child support will be ordered based on this imputed income.
If you do not pay child support pursuant to your most recent court order or signed written agreement, the other parent may enrol with the BC Family Maintenance Enforcement Agency (FMEP) to enforce your most recent order or agreement. The FMEP will not vary your child support obligations based on any evidence you may have. The FMEP will only vary your child support obligations if you can provide them with a new court order or signed written agreement that has been filed in a court registry.
“Effective Notice”
If a material change of circumstances occurs that results in a significant decrease in your income, it’s important that you give written notice to the other parent right away with the following information:
The date that you provide notice (including adequate disclosure) to the other parent is referred to as the “date of effective notice.”
Going to Court
It can be challenging for people who have legitimately lost their employment and can’t afford to pay child support, much less a lawyer for an expensive court application to reduce or suspend their child support obligations. If you need to wait to file a court application to reduce your support obligations, you can typically seek a reduction back to the date of effective notice, and up to three years before that date. This is why it is so important to promptly provide effective notice of your change of income.
Filing a court application in Provincial Court is more straight-forward and easier for self-represented litigants. However, if the Supreme Court of BC has made any previous orders regarding child support, you will be required to file your application in the Supreme Court because the Provincial Court does not have jurisdiction to vary Supreme Court orders.
Whether you go to Provincial Court or Supreme Court, you will need to file an application, financial statement, and affidavit.
Provincial Court:
If you go to Provincial Court, you will need to file:
Supreme Court:
If you go to Supreme Court, you will need to file:
Whether you go to Provincial Court or Supreme Court, you will need to attach your three most recent income tax returns, three most recent notices of assessment, and your most recent pay statement (if you are/were an employee) to your Financial Statement.
Going to court with a lawyer is always expensive, and it’s particularly expensive to file applications in Supreme Court. It’s important that you have a strong case in Supreme Court because, if you lose, you may be required to compensate the other party for a portion of his or her legal fees. This is called an award of costs. Costs are not awarded in Provincial Court.
It is time consuming to prepare for court and it often a much longer process than people expect. Delays and adjournments are common. The court system is backlogged, and we often find out at the last minute that our application has been bumped because there aren’t enough judges available. Delays are stressful and can be costly because your lawyer may need to prepare for a single application several times. Even if you win, your savings on child support may be trivial compared to your legal fees. If you retain a lawyer and win, you may get awarded costs, but this generally won’t cover 100% of your legal fees.
Alternative Dispute Resolution:
Alternative dispute resolution (ADR) is nearly always a better option than court. ADR may involve mediation, arbitration, or a combination of the two, which we refer to as “med-arb.” See our blog, Is Med-Arb Right For Me? to learn more.
The Law on Retroactive Child Support Variation:
The leading case on applications to retroactively increase or decrease child support is currently the Supreme Court of Canada decision, Colucci v. Colucci, 2021 SCC 24.
The following analysis summarizes the legal test when a payor applies to retroactively decrease child support under s. 17 of the Divorce Act::
(1) The payor must meet the threshold of establishing a past material change in circumstances. The onus is on the payor to show a material decrease in income that has some degree of continuity, and that is real and not one of choice.
(2) Once a material change in circumstances is established, a presumption arises in favour of retroactively decreasing child support to the date the payor gave the recipient effective notice, up to three years before formal notice of the application to vary. In the decrease context, effective notice requires clear communication of the change in circumstances accompanied by the disclosure of any available documentation necessary to substantiate the change and allow the recipient parent to meaningfully assess the situation.
(3) Where no effective notice is given by the payor parent, child support should generally be varied back to the date of formal notice, or a later date where the payor has delayed making complete disclosure in the course of the proceedings.
(4) The court retains discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair. The D.B.S. factors (adapted to the decrease context) guide this exercise of discretion. Those factors are: (i) whether the payor had an understandable reason for the delay in seeking a decrease; (ii) the payor’s conduct; (iii) the child’s circumstances; and (iv) hardship to the payor if support is not decreased (viewed in context of hardship to the child and recipient if support is decreased). The payor’s efforts to pay what they can and to communicate and disclose income information on an ongoing basis will often be a key consideration under the factor of payor conduct.
(5) Finally, once the court has determined that support should be retroactively decreased to a particular date, the decrease must be quantified. The proper amount of support for each year since the date of retroactivity must be calculated in accordance with the Guidelines.”
In the decision of Carriere v. Carriere, 2013 BCSC 2357, the BC Supreme Court said the following about the principles of child support:
“… The parents of a child have a joint and ongoing obligation to support their children. Child support belongs to the child. The amount of child support is based, not only on the parents’ earnings, but also on what the parent can earn – the latter of which is the imputing of income described in the Federal Child Support Guidelines (the “Guidelines”)
The court may impute income in accordance with s. 19(1) of the Child Support Guidelines …
Under s. 17(1) of the Guidelines, the court may have regard to the spouse’s income over the last three years in determining what amount is fair and reasonable in light of any pattern of income or fluctuation in income. Since there continues to be inadequate disclosure in this case, it would not be proper to use the average of the last three year’s income.”
Click here to ask us your questions about child support; or click here to schedule a free consultation.
This post was written by a verified lawyer with The Law Portal. Please see our Terms of Service.
