Skip to content

Posts tagged ‘finance’

10 Things You Should Know About Ontario Child Support in 2019

One of our most popular articles 10 Things You Should Know About Child Support was published nearly ten years ago in 2010. We challenged ourselves to provide deeper information for each topic. Family law can be a very tricky terrain to navigate. Understanding one’s responsibilities with respect to child support raises a lot of questions for parents and guardians, which we hope to outline and answer here.

father and child hands

  1. What is Child Support?

All dependent children have a legal right to be financially supported by their parents. When parents live together with their children, they support the children together. Parents who do not live together often have an arrangement in which a child lives most of the time with one parent. That parent is said to have custody of the child.

This arrangement can be written in a separation agreement or court order (sometimes called legal custody), or may occur without a written agreement or court order (sometimes called “de facto” custody). Either way, the parent with custody has the main responsibility for the day-to-day care of the child and has most of the ordinary expenses of raising the child. The other parent should help with those expenses by paying money to the parent with custody. This is called child support.

Learn more about Child Support:

Common Questions About Child Support in Ontario

Child Support in Ontario: An Introduction to Child Custody

Introduction to Ontario Child Custody: How do Decisions Get Made

Child Support 101: The Details of Ontario Child Support

 

  1. Parents and Guardians

Parent or guardian can be the birth mother or father, an adoptive parent, or step-parent, who has been married to someone with children, or who has lived as a couple with someone with children, and who has shown an intention to treat those children as members of his or her own family.

Learn more about Parents and Family Law:

Ontario Custody and Access: Who is Entitled to the Child?

Ontario Child Custody: Who is Considered a Parent?

When a Non-Parent Wants Custody of a Child

 

  1. Who Pays Child Support

Child Support is the legal responsibility of parents or guardians to provide financial support for all dependent children. When there is an arrangement in which a child lives primarily with one of the parents or guardians they are assumed to have “custody” of that child and bear the day-to-day expenses of raising them; however, they may be entitled to receive child support from the other parent. This entitlement to child support may continue even if the custodial parent remarries or starts to live with someone else.

The amount of child support is usually set according to the Child Support Guidelines. More than one parent can have a legal duty to pay child support for the same child. For example, if a parent with custody of a child separates from their marriage or common-law spouse who is not the child’s birth parent, both the child’s other birth parent and the step-parent may have a legal duty to pay child support.

Learn more about the legal responsibility to pay child support:

Who Pays Child Support in Ontario?

Top Four Questions About the Children of Common-Law Relationships

Can an Ontario Support Agreement or Order be changed?

Business Owners Beware: Court Can Force Your Hand to Compel Appropriate Child Support

Can a Parent Replace Child Support…with Gifts?

 

  1. When to Apply for Child Support

Applying for child support is usually done right after separation or when applying for a divorce but can be applied for at any time thereafter. It is usually best to deal with these matters as early as possible and when sorting out the custody of the children. In the beginning, parents and guardians may feel they don’t want or need the support but as time goes on and the expense of raising children increases the need may arise at which time they can apply, even after divorce or settlement of matters arising from the separation have been dealt with. Under some circumstances the court has awarded custody and support while the parents or guardians are living separately under one roof but the court usually doesn’t make an order until one of the parents or guardians have physically moved out.

If the social and emotional relationship between the step-parent and child have disbanded for a lengthy period of time, it is less likely that the court would order the step-parent to pay child support.

Learn more about application:

• Video: When Can a Parent Apply for Child Support?

• Video: When do the Child Support Guidelines Apply?

 

  1. When Does Child Support End?

Child support must be paid if a child is still a dependant and they are under 18 years of age.  However, the following circumstances and criteria can terminate responsibility of child support:

  • the child has married;
  • they are 16 or older and have voluntarily left parental control;

There are situations where even if the child has turned 18 years of age they are still considered a dependant. For instance, any situation where the child is unable to support themselves due to any of the following:

  • they have a disability or illness;
  • they are attending school full-time;

In a situation where the child is 18 years of age or older and is living away from home because they are attending school, child support may have to be paid if the child’s primary residence is with the parent with custody. This circumstance usually requires child support to be paid until the child is 22 or receives a post-secondary degree or diploma.

In some of these situations, a judge can order the child support to continue past this point. If the judge decides child support must be paid past the age of 18, they will take into consideration how much the child has in earnings or income before determining the amount of child support to be paid.

Learn more about criteria for child support:

Does the Age of the Child Affect Child Support in Ontario?

What Happens if Kids Skip School?

How Long Does Child Support Continue in Ontario?

 

  1. What is a Child Support Agreement?

How the child support is paid and how much is paid, is determined with a Support Agreement. There are three different ways parents can obtain a Support Agreement such as:

  • In a situation where the parents can work together to form a Support Agreement, it is encouraged that they look at the Child Support Guidelines to find out the amount a judge would likely order. The paying parent will have to give complete and true information about their income. It is suggested that one parent should have a lawyer put the agreement in writing and that the other parent get a different lawyer to review it, before signing it. This way, both parents will know the agreement says what they intended it to say, while also protecting their rights and their children’s rights.
  • If the parents need help working out a Support Agreement then they can see a mediator who will help them come to an agreement they both can accept. The mediator is an unbiased party that does not offer legal advice. In this situation it is still recommended that the agreement is reviewed by both parent’s independent lawyers before signing, and filing with the court.
  • If the parents cannot agree on a Support Agreement then both parents should hire their own lawyer. The lawyers can then attempt to negotiate support terms that both parents can agree upon. If no agreement can be reached then they will go to court and ask a judge to determine support. The judge will then make a court order that states how much child support is required to be paid.

Learn more about paying for child support:

• Video: Ontario Child Support: How do you arrange for Support to be paid?

• Video: How Base Child Support is calculated

• Video: How are Child Payments Taxed?

 

  1. Access When Child Support is Not Paid

Even if child support is not paid, a parent should not keep the child from seeing their other parent. It is assumed that it is generally good for a child to have a relationship with both parents. Keeping the child from seeing their other parent is considered punishing the child and the law will not punish the child due to their parent failing to pay child support.

Parents who do not have custody are usually given “access” to the children so that they can spend time together and maintain their relationship. The only way access can be refused or limited, is if the parent’s behaviour is likely to cause harm to the child, or harm the child in anyway. The courts will not refuse access because the parent fails to pay child support, and the parent with custody should not refuse access for this reason either. There are ways to obtain child support from a non-paying parent without refusing access.

Learn more about Child Support and Access:

Can parents be kept from seeing their children if they do not pay their child support?

Child Support and Access Rights in Ontario

 

  1. Enforcement of Child Support in Ontario

Enforcement in Ontario is done through a provincial government office called the Family Responsibility Office (FRO). The court automatically files all support orders made after July 1, 1987 with the FRO.

The parent who is to pay support is told to make all support payments to the FRO. When the FRO receives a payment, it sends a cheque to the parent with custody, or deposits the money directly into that parent’s bank account. It only does this after it has received the money from the paying parent.

If a payment is missed, the FRO takes action to enforce the order or agreement. To do this, the FRO needs as much up-to-date information about the paying parent as possible. The information about the paying parent goes on a Support Deduction Information Form which is available at the court. This form is given to the FRO along with the support order or agreement. It is important to update this form whenever the information changes.

Learn more about child support enforcement:

• Video: Enforcement of Child Support in Ontario

The Role and Power of FRO

 

  1. How Can FRO Collect Child Support?

The FRO (Family Responsibility Office) uses different ways to get the payments that are owed. It can:

  • get the payments directly from the parent who is supposed to pay support
  • have the payments automatically deducted from the parent’s wages or other income (other income includes things like sales commissions, Employment Insurance, Workers’ Compensation, income tax refunds, severance pay, and pensions)
  • register a charge (a lien) against the personal property or real estate of a parent who fails to pay the support that he or she owes
  • garnish (take money from) the bank account of a parent who fails to pay support
  • garnish up to 50% of a joint bank account that he or she has with someone else, or
  • make an order against another person who is helping a parent hide or shelter income or assets that should go toward support

The FRO can put more pressure on parents who do not make their support payments by:

  • suspending their driver’s licences
  • reporting them to the credit bureau so that it will be difficult for them to get loans, or
  • cancelling their passports.

Once the order or agreement is filed with the FRO, then it is the FRO, not the other parent, that is responsible for any actions taken to enforce it.

Sometimes parents receiving support withdraw from the FRO because it is easier to receive payments directly from the other parent. But if problems arise later, and they want to re-file with the FRO, they might have to pay a fee to do this.

Learn more about the FRO:

Top 5 Facts About the FRO

Top 5 Tips for Dealing with the Family Responsibility Office

 

  1. How to Reduce Child Support

Parents who have an obligation to pay support should also know that the FRO cannot change the amount that the order or agreement says they have to pay. If they think that a change in their financial situation justifies a reduction in the amount of support they should pay, they must get a new agreement or go to court to get the support order changed.

FRO can be contacted by calling 1-800-267-7263 or you can also visit their website.

Learn more about reducing child support:

Varying Child Support – How long is Too Long to Wait

Could Trucker Dad Avoid Child Support Due to Dizziness?


Russell Alexander Collaborative Family Lawyers has been providing answers and solutions to child support questions for over twenty years. If you need assistance determining whether you should be receiving child support for your child or collecting your support from the other parent, or if you believe that you should no longer be paying child support, we are here to help.

What Constitutes “Hardship” When You Are Well-to-Do?

What Constitutes “Hardship” When You are Well-to-Do?

In determining the proper amount of spousal support that should be awarded after a married couple divorces, the court is guided by various established legal and policy-based principles. One of them is that the support should seek to alleviate economic “hardship” on the part of the spouse who is entitled to receive it.

As with many of the other factors, the concept of “hardship” is relative:  What amounts to hardship in one family setting will be vastly different to what is considered hardship in another.

This dichotomy was well-illustrated in Plese v. Herjavec, which involved the high-profile divorce between Canadian television personality Robert Herjavec (most recently seen on the reality shows Shark Tank and Dragon’s Den) and his wife of 24 years, Diane Plese.

In the context of determining the appropriate amount of spousal support to which the wife should be entitled, the court wrote:

Spousal support is also designed to relieve economic hardship.  What is “hardship” in the context of this family?  I need to look at the pre-separation lifestyle of the family to understand this context.

At the date of separation, the parties lived in a 22,000 square foot home (not counting the basement) with an indoor pool, ballroom, tennis court, tea house, and ten-car garage housing numerous luxury vehicles. The home was located on more than 2 acres in one of the most exclusive areas of Toronto.  The parties owned a ski chalet in Caledon, a luxurious vacation property in Florida, boats and other water craft and a Muskoka cottage.

The former couple’s lifestyle was commensurately extravagant, as the court described:

The family travelled extensively.  Family holidays were often taken using THG’s private jet, which Ms. Plese described as one that can fly “over the ocean”.  Holidays included European destinations.  On a holiday in Greece, the parties rented a yacht and staff to sail the family around the Greek Isles.  Ms. Plese testified that if the aircraft was being used for THG business, and she wished to take a trip, Mr. Herjavec would charter a private plane for her.   Mr. Herjavec did not refute this evidence.

Ms. Plese’s financial statement shows she owns considerable expensive jewellery from Cartier.  At valuation day it was worth over $428,000.  Ms. Plese says this figure reflect roughly half of what it cost.  Again, I heard no evidence to the contrary.

Mr. Herjavec testified he spent $100,000 on a piano for High Point, but, since no one in the family could play, invested a further $25,000 on a device that would play the piano.  Mr. Herjavec owned and operated numerous luxury cars. The middle child, Skye, received a car for her 16th birthday.  The children were educated at exclusive private schools.  The two girls attended elite American universities.  Both older children have pursued post-graduate studies, at no personal financial cost to them.  The family lived a rarified existence of privilege and luxury.

It is telling that [their daughter] Skye, when asked whether it was true she enjoyed luxurious holidays with her family, simply answered:

I mean they were just vacations to me, I don’t – it depends on how you see them.

Skye was then asked how she saw them. She answered:

I was going on vacation with my family … it depends what you – like that’s how I grew up, that’s – it was a vacation with my family is how I saw it.

In awarding support, the court had to examine the post-split downgraded lifestyle that the wife was now living, in light of the divorce after a longstanding marriage.  The court explained:

Ms. Plese testified that her lifestyle has suffered since the breakdown of the marriage.  For example, instead of travelling by private jet, she flies with commercial airlines.  Instead of staying in a suite of rooms at luxurious hotels, she now stays in a single hotel room.   I have no evidence that Mr. Herjavec has experienced any similar reduction in his lifestyle.

I conclude that without spousal support, Ms. Plese will have suffered economic hardship as a result of the end of the marriage.

For the full text of the decision, see:

Plese v. Herjavec, 2018 

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

On Income Tax, Support Arrears, and Retroactive Support

Related image

On Income Tax, Support Arrears, and Retroactive Support

Income tax time will be upon us soon enough.  If you are receiving spousal support from your former spouse, you may wonder how those support payments should be treated when it comes time to file your income tax return with the Canada Revenue Agency.

The answer is straightforward:  If you are receiving spousal support from your former spouse or common-law partner, under a court order or written agreement that specifies the amount, frequency and duration of the payments, then those amounts are fully taxable in your hands.  In other words, all those amounts must be reported as “income” on your tax return, and will be taxed accordingly. (This is unlike the situation with child support, which from the recipient’s vantage point is generally considered non-taxable).

Normally, that obligation to declare your spousal support as income on your tax return triggers a corresponding entitlement by your former spouse or partner to claim an equivalent deduction on his or her tax return for those same payments, with some exceptions.

So the short answer, is that spousal support is considered “income.”  But what if the payments you receive now cover support payments that your former spouse should have made in the past?

A pair of recent decisions tackled a narrow – but important – issue relating to how: 1) retroactive support, and 2) support arrears, are to be handled for personal income tax purposes.

In a case from last year called Gonsalves v. Scrymgeour, the court reviewed the law on the tax treatment of retroactive spousal support awards (being those where the support paying spouse is newly-ordered to pay an amount that covers a past period of time during which the other spouse was eligible to receive it). The court confirmed that an award of retroactive spousal support should be reduced, to take into account the benefit of the income tax deduction that the paying spouse would have been able to claim, using the mid-point of the spouse’s respective marginal tax rates.

The more recent decision in Negin v. Fryers addresses support arrears (which are unlike retroactive support because they consist of unpaid amounts that were due under an order made previously).  There, the separated parents had agreed in 2004 that the father would pay child support to the mother in line with Guidelines amounts, together with a set amount of spousal support.   Apparently for some of the years since then, the father overpaid child support by over $52,000, and underpaid spousal support by more than $155,000.  After offsetting these amounts, the mother claimed the father owed just under $103,000 in arrears.

The father claimed – unsuccessfully – that the lump-sum gross amount he now owed the mother in arrears should be “netted down” to account for the different tax treatment of lump sum spousal support, as compared to an order for periodic support.  The wife pointed out – and the court agreed – that it was the policy of the Canada Revenue Agency to allow non-retroactive lump-sum spousal support payments to be deducted by father in the role of the support payor.  The court directed the parents to calculate the amount of child and spousal support owed or overpaid accordingly (as the case may be), in keeping with its specific directions and ruling.

Nobody loves tax time (except perhaps the Income Tax Preparers and Accountants!)  If you have questions about the spousal support you receive, feel free to give our office a call.

For the full text of the decisions, see:

Negin v. Fryers, 2018

Gonsalves v. Scrymgeour, 2017

At Russell Alexander, 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

 

 

Did Wife’s Lawyer Know of Husband’s Asset?  And Can Court Assume Wife Knew, Too?

Did Wife’s Lawyer Know of Husband’s Asset?  And Can Court Assume Wife Knew, Too?

In a family law decision called Anderson v. McWatt, the Ontario Court of Appeal addressed a narrow evidentiary point:  If one party is truly unaware of a certain fact, but his or her lawyer may have known about it, can a court impute that knowledge to the party?

The background facts involved a former couple who were interior designers with a successful business.  They started living together in 1980, married in 1989, and separated in 2000, after which point they became embroiled in a full 15 years of high-conflict litigation.

Part of that litigation involved apportioning the spouses’ respective interests in a commercial property in Toronto.  Just prior to their 1989 marriage the husband had bought the property, and led the wife to believe was owned by a development corporation that had been set up.  In reality, he put title in his own name only – a fact he did not reveal in his sworn affidavits and financial statements for over a decade after their 2000 separation.  The wife only learned of the true state of affairs in 2012.

The date of her awareness as to title was key:  One of the issues was the point at which her claim to the commercial property was barred under the two-year limitation period. Indeed, the wife amended her pleadings about two years after making the discovery, to add claim based in equity (i.e. claims for unjust enrichment and constructive trust);  however, if it could be shown she knew or should have known earlier, then her legal claim would be barred.

At trial, the judge confirmed that the wife herself did not actually know that the husband held title to the property until 2012, but ruled that she should have known in 2001.  This is because (as the judge concluded) her own lawyer seemed to know about it, based on some comments he made while questioning the husband in 2001.  The upshot of the lawyer’s comments was that the wife “may very well have a claim against the property” and that “We will make our claim as and when we feel we have sufficient facts to base it on.”

On later appeal, the Court of Appeal rejected the trial judge’s conclusion on this point.The lawyer’s statement did not prove that he – or by extension, the wife – knew the husband was the actual owner of the commercial property. At the time of that questioning in 2001 – and for the next decade – the husband had been hiding the facts of his ownership in his sworn court documents. The wife was allowed to rely on this false information, and her own lawyer’s indication that she “may” have a claim was not an admission sufficient to trigger the limitation period. In fact, the Court found that the wife did “all she reasonably could to determine the truth that the [husband] was concealing.”

For the full text of the decision, see:

Anderson v. McWatt, 2016

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

 

%d bloggers like this: