Father’s Income Cut By Half – Can Support Arrears of More Than $70,000 Be Wiped Out?
Under the terms of a settlement agreement that had been confirmed in a court order, the father had been dutifully paying about $1450 a month in child support, and $450 in monthly spousal support, based on his income at the time of about $100,000 per year.
However, within a few years, he had amassed arrears to the tune of $47,000 in spousal support, and $25,000 in child support. The court explained the reason:
In 2015, [the father] lost his job. He was not able to find similar work. His current income at his new employment is substantially less. He has also taken on the responsibility of a new family. He has two stepchildren from the new marriage. Since 2015, given the change in his employment, he has been having problems making the support payments.
The court heard that the father’s current income was considerably reduced from his former six-figure mark: he was now earning around $45,000 per year.
In light of those changed financial circumstances, the father asked the court to eliminate his outstanding arrears entirely. In response, the mother claimed he actually owed another $40,000 more, over and above the arrears, to cover his unpaid share of one of their children’s university expenses.
The court confirmed that under the provincial Family Law legislation, it had the power to retroactively discharge or rescind child support arrears – but only if there has been a “change in circumstances” as that term is defined in the Child Support Guidelines. That threshold is met if the amount of child support, calculated using the current circumstances and the Guidelines, would result in a different mathematical figure than the one arrived at initially.
But as the court explained:
The accumulation of arrears without evidence of a past inability to pay is not a change in circumstances. As well, the present inability to pay does not by itself justify a change order. Such an order should only be granted if the payor can also prove a future inability to pay.
There remains a conceptual difference between situations where:
- The father was asking for relief from paying arrears due to his current inability to pay; and
- His arrears accumulated due to a change in circumstances that affected his ability to make the child support payments when they came due.
Although that distinction may seem esoteric, the court’s decision on whether to reduce or eliminate arrears was also to be influenced by various factors, including:
- Whether the father’s support obligations arise under contract, by statute, or by court order;
- The child’s ongoing support needs;
- The father’s ongoing financial capacity to pay, including his ability to reduce the arrears; and
- The father’s conduct, including any voluntary payments towards the arrears.
The court must also consider both the hardship endured by the father if he is ordered to pay the arrears, as well as the hardship to the mother if he is allowed not to.
In all cases, the paramount governing principles are firstly that the best interests of the couple’s children must be taken account, and secondly that the court should not provide either parent with incentive not to meet his or her child support obligations.
Here, the father was requesting a retroactive change to his support obligations based on his current income level. That being the case, the court would not typically agree to rescind or reduce his arrears unless he could establish, on the balance of probabilities, that he cannot and will not ever be able to pay them. The father failed to fully satisfy the court on that fundamental point.
In the end, the court decided not to vary the $24,000 in outstanding child support, since the payments were properly owed by the father throughout, in light of his duty to help with their child’s educational expenses. However, the court did agree to reduce some of the spousal support arrears, but only for only that period that the father was earning less than the mother. This still left him with $32,800 in outstanding arrears for spousal support and a total of almost $58,000 in arrears all-told.
For the full text of the decision, see:
At Russell Alexander Collaborative Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com