Can Private School Be a Necessary and Reasonable Child Expense?
In one interesting Ontario case recently, the court found that private school tuition was a reasonable and necessary expense for the two children of separated parents, despite the fact that it represented a “huge proportion” of the post-tax income for the family.
The couple met in 1995, married in 2003, and had three children together. The two youngest currently attended Lycée Français private school, and were able to do so on a reduced-fee basis since their mother was herself a teacher and enjoyed a tuition discount as part of her employment benefits.
Prior to separation, the parents tended to live beyond their means, and the financial strain contributed to the breakdown of their marriage. After they split up in 2012, the mother had custody of the children; in the context of requesting support from the father, she asked him to help pay for their ongoing private school fees. She pointed out that since the family had always sent the children to private school when they were together, they should continue to do so after they split up.
The father resisted, pointing out that he was no longer earning at the same level of income he had enjoyed during the relationship, mainly because post-separation he had been forced to suspend operation of his home-based business when the mother took sole possession of the matrimonial home as the parent with custody. And with his income now greatly reduced – and since there were now two separate households to keep financially afloat – private school tuition was not a reasonable “special expense” (as that term is defined under s. 7 of the federal Child Support Guidelines, which governs parents’ support obligations). The father also pushed to have the matrimonial home sold, so that he could resume his business and use the assets to upgrade his equipment; the mother objected to the sale on the basis that the children needed the stability of a familiar home and neighborhood.
The court was asked to resolve the dispute. It began by providing an overall positive assessment of both parties, as follows:
Both impressed me as decent, hardworking people who want the best for their children and whose worst failings may well have been a tendency to live somewhat beyond their means in order to provide their children with a decent standard of living and in particular a good education.
With that said, the court promptly ordered the matrimonial home to be sold, reasoning as follows:
I accept [the father’s] evidence that he requires new equipment to be competitive in his business and that without the cash from the sale of the home, he has no way to obtain it. Any disruption that the children might experience in moving from this home will be offset by the increased financial security of the family and particularly their father’s ability to re-establish his own business, earn more money, pay more child support and contribute to their tuition fees.
As for the private school tuition itself, under the Guidelines the court had to consider considered whether the fees were necessary and reasonable in the circumstances.
In this case, it was clear that during the marriage both parents agreed that a private school education was to be given a high priority, even though it was always a stretch for them. As such, it met the test of being “necessary” for this particular family.
However, whether the fees were considered “reasonable” depended on several things. Unless the matrimonial home was sold, the father’s income would remain around the $60,000 mark and even the reduced tuition of $10,000 amounted to a large proportion of after-tax income. However, since the court ordered the home to be sold, the financial impact would be different: While stopping short of concluding that private school tuition was reasonable for this family generally – or that it was automatically a necessary and reasonable expense for other families – the court found that all things considered the combination of the reduced tuition fees and the newly-available capital (ear-marked to fund the father’s return to operating the business) would bring the fees within the realm of what was reasonable for these particular parents in their unique circumstances.
The court accordingly ordered the mother and father to share the private school tuition at levels that were proportionate to their respective incomes.
For the full text of the decision, see:
