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Posts tagged ‘Support’

Apr 25

Father’s Income Cut By Half – Can Support Arrears of More Than $70,000 Be Wiped Out?

man with two children at lake and mountain

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 step children 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:

Jackson v. Jackson, 2019

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

 

 

Apr 2

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.

Mar 28

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Can You Get Child Support from Your Ex After 50 Years in Ontario?

us money bills

Can You Get Child Support from Your Ex After 50 Years in Ontario?

Multiple reports of a 74-year-old California mother getting $150,000 in child support owed to her from 50 years ago are hitting the headlines.

CNN reports:

“Toni Anderson married Don Lenhert in 1966, but the couple split two years later.

During the divorce proceeding in mid-1970, the judge ordered Lenhert to pay child support for their 3-year-old daughter Lane, consisting of monthly payments of $210 for the first 2½ years, and then dropping down to $160 per month until Lane turned 18.

The order commenced January 1, 1971.

But Lenhert never paid.

Those monthly payments comprise a principal of about $30,000, Anderson said, and with a 10% interest rate, he owes her $150,000.

“The first check bounced and then he went off to Canada with his girlfriend and had two more kids. He completely disappeared,” Anderson said.

…

Last year, Anderson realized there’s no statute of limitations for child support payments in California.

She Googled her ex-husband’s name and, she said, found photos of him living what appeared to be a financially sound life in Oregon, with a big house and a boat.

She filed a motion to ask for unpaid child support. Last month, she made her case in court. The judge granted her request.”

Does this sound fair to you?

Some would argue that the mother should have taken steps earlier to enforce support order and it is too prejudicial to require the father to pay now after 50 years. The child is an adult now so the $150,000 amounts to a windfall for the mother.

Others could properly point out that an Order is an Order, not a suggestion and the father should have complied 50 years ago, and any prejudice now is the result of his own misconduct.

Could this happen in Ontario?

As we have written previously the leading case in Canada for child support and retractive support awards is the Supreme Court of Canada’s decision in D.B.S.

If the claim for child support is made for the first time when the “child” is an independent adult, then the short answer is no. Child support is for children of the marriage, not adults who used to have that status.

If the basis of the retroactive claim is valid separation agreement or court order, then the answer would likely be yes. But each case is unique, and the court sets out several factors to consider in determining retroactive awards including, proper and timely financial disclosure, delay in seeking enforcement by the recipient and blameworthy conduct of the support payor.

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.

Jan 17

On Income Tax, Support Arrears, and Retroactive Support

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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

 

 

Jan 11

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GM Oshawa Assembly Plant Closing & Divorce

The Ghosts of GM: Past, Present and Future

On November 26, 2018, the General Motors Company (GM) announced that it will cease allocating new product to its Oshawa assembly plant beyond the end of 2019. This came as a shock to the 2,500 employees who work at the Oshawa plant and the many more who depend on their income. While the jury is still out on whether GM will be laying off or re-training its 2,500 employees, one thing is certain—a large cohort of GM’s employees stand to lose their livelihood.

Whether laid off or re-trained, employees who have a potential, current or settled family law matter will need to govern themselves wisely to weather the impact that closure will have on their day-to-day lives. Accordingly, this post explores the likely, and, not so likely, family law implications of GM’s closure of its once thriving Oshawa assembly plant.

The Ghost of GM Past: Settled Family Law Matters

If your family law matter was previously settled by way of a Separation Agreement or Final Order, the loss of employment income may trigger a review of child support or spousal support, or parenting.

Support obligations

It is likely that the loss of employment income will mean that you cannot afford to pay child support and/or spousal support as set out in a Separation Agreement or Final Order. In the case of a Separation Agreement, you may be able to rely on a built-in review clause to revisit the issue of support. Most Separation Agreements contain a dispute resolution clause which may be the first place to start in this endeavor. In the case of a Final Order, you will likely want to bring a Motion to Change a Final Order if you and your ex-spouse cannot agree on the appropriate adjustment out of court. A qualified lawyer can assist with making this process as seamless as possible.

Parenting

It is not likely that your loss of income will impact settled parenting arrangements. However, you may find yourself needing to reduce your parenting time with the children in order to focus on finding a new job. In this scenario, you may likely need to rely on the dispute resolution clause in your Separation Agreement or bring a Motion to Change a Final Order altering an access schedule in order to achieve the desired relief.

The Ghost of GM Present: Current Family Law Matters

If you are currently going through a legal separation from your spouse, the loss of employment income may affect a number of aspects in your separation, including but not limited to, support, assets and liabilities and alternative career planning.

Child support and spousal support

You may have credible grounds by which to vary a temporary Order for support in your legal proceeding. As an Order for support would have been based on your GM income at the time, the Order may be varied by the new circumstances. You may seek such relief at a pre-trial conference or by bringing a motion. It is not likely, however, that your loss of income resulting from being laid off will extinguish your entire obligation to pay support. Rather, you may still be required to pay support on the basis of employment insurance income or imputed income. However, the extent of any such continuing obligation depends on the particular facts of your case.

Assets and liabilities

The loss of employment income may result in a budgetary deficit, impacting your ability to keep the matrimonial home. If you are no longer able to maintain your share of the mortgage and bills associated with the matrimonial home, it may have to be listed for sale—which may be the most poignant of all of your post-closure concerns. Worry not. There may be options available to you for preventing this outcome such as, a buy-out, borrowing or disposition of investments, RRSPs, RRIFs or your GM pension. However, the viability of these options to save the matrimonial home will need to be assessed against the surrounding issues in your proceeding such as support, equalization and other issues relevant to your case.

Alternative career planning

You may wish to delay your re-entry into the workforce to obtain credentials in a more stable industry. While this will yield economic benefits in the long run, your current financial obligations of support and solvency will be deciding factors. Delayed income generation caused by alternative career training may likely be manageable provided that the financial obligations of your ongoing separation are minimal. However, your freedom and ability to pursue such an undertaking may require a corresponding compromise and will depend on the unique facts of your case.

The Ghost of GM Future: Potential Family Law Matters

If you have been planning to separate from your spouse, the loss of employment income can have significant family law implications on a number of obligations arising in separation, including but not limited to, support, parenting and family property.

Child support and spousal support

It is not likely that being laid off will defer support obligations. You may be obligated to pay support if you receive employment insurance income sufficient enough to meet legislative minimums. If you do not qualify for employment insurance, your spouse may still seek support by imputing an income on you commensurate with your work experience, whereby you will be required to pay support. In either scenario, the obligation to pay child support and spousal support may survive the loss of income depending on the facts of your particular situation.

Parenting

It is likely that being laid off will mean expanded parenting time. While increased parenting time may yield social benefits, it may also impinge on your economic rehabilitation. Your spouse may expect you to dedicate your new found time to caring for young children who are not in school. These, and other significant changes to parenting time after initiating your separation, may likely hinder your re-entry into the workforce. A properly drafted parenting agreement can help by moderating unrealistic expectations.

Family property

You will have a legal duty upon separating from your spouse to avoid the reckless depletion of family property. While you may wish to list personal or real property for sale to help make ends meet, it is not likely that you will be able to freely dispose of family property after your date of separation without your spouse’s prior consent or proper accounting. You will have to be mindful of how you manage family property as mismanagement may prejudice the equalization of net family property and may result in a Court order.

Bottom line

The closure of GM’s Oshawa assembly plant in 2019 will disrupt the lives of many families, the impact of which might be felt most by those dealing with a potential, current or settled family law matter. Contacting a lawyer for legal advice tailored to the particular facts of your case is a proven way to mitigate the effects of an imminent disruption to income. While it may seem impossible to afford a lawyer at this time, there may be options available to finance the cost of much-needed legal representation.

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.

Jan 31

Can a Wife’s Contribution to the Welfare of the Family be Worth $1 billion dollars?

Can a Wife’s Contribution to the Welfare of the Family be Worth $1 billion dollars?

This could be one of Britain’s biggest divorce cases exceeding $1 billion Canadian dollars.

The Guardian reports that Tatiana Akhmedova is seeking a claim against her former husband, a Russian billionaire.

The paper reported that she has not received “a penny” and the case is under appeal. The Guardian also reported on the trial decision.

Akhmedov argues “she was due almost half of their £1bn fortune due to her “equal contributions to the welfare of the family” during their marriage”.

The case has similar overtones to the British case Antonio v. Rokos, [2016] EWHC 520 (Fam); Case No. ZCI5P04051, February 15, 2016, High Court of Justice Family Division that considered a mother’s child care budget that included £10,555 a year for wine.

So, what do you think? Does Akhmedov’s argument that her contributions to welfare of the family is worth up to $500 million dollars?

Jan 27

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Should Support Be Extended When the Recipient Spouse Loses Their Job?

In a recent case called Lawder v. Windsor, the court grappled with the issue of whether a support-paying spouse should have to pay for a longer period if the other spouse unexpectedly loses his or her job.

The couple had divorced in 1998 after 16 years of marriage. In 2000, the husband had been ordered by the court to pay $800 in monthly spousal support to the wife. He continued to make those payments until 2012, when he applied to the court for an order terminating his support obligations.

The husband claimed that in the circumstances, 12 years of paying support had been enough: he was now 56 years old and retired (he took an early retirement option as part of his termination due from a long-held job due to downsizing), and was two part-time jobs earning about $10 an hour. He also received a pension.

On the other hand the wife, now aged 51, was also employed and had enjoyed a steady increase to her income in the past five years. Unbeknownst to the husband, her income during that period rose from $38,000 to over $62,000 in 2012.

The glitch, however, was that the wife had recently lost her job due to corporate restructuring. She had received a termination package, but on the grounds that she was now unemployed she wanted the husband to continue paying support. (The court pointed out that she had provided no proof that she was actively looking for work, however).

The court considered the circumstances, and declined to extend support; it terminated the husband’s support obligations effective one month hence.

The court reasoned that spousal support was designed in part to compensate the wife for any economic disadvantage that she had suffered as a result of the marriage or its breakdown. That goal had been achieved through the husband paying support since 2007; the job loss now had nothing to do with the marriage or its breakdown.

Further, it was clear that the wife had achieved economic self-sufficiency: she had gotten a good job with a high degree of responsibility, and her income had increased steadily in the past five years alone. She had also never asked for a review of the support order and had never taken advantage of its built-in indexing of support amount.

In short: The wife’s recent job loss was not a good reason for extending support now; there was nothing to suggest that her temporary unemployment would affect her self-sufficiency in the bigger picture, and any short-term financial setback was something she could address through her own efforts and diligence.

For the full text of the decision, see:

Lawder v. Windsor, 2013 ONSC 5948  http://canlii.ca/t/g0qb3

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 www.RussellAlexander.com.

Dec 4

Two necessary evils — know your obligations re: income tax and spousal/ child support – Video

 

 

Wednesday’s Video Clip: Know your obligations re: income tax and spousal/ child support

Income tax: Not a popular concept even at the best of times. But add in the obligations, which arise in the context of paying child or spousal support, and it’s enough to cause heart palpitations in most Canadians.

This is because the Canada Revenue Agency rules relating to how support payments are to be treated are quite complex. To make things more confusing, the federal Income Tax Act has separate rules for spousal support as opposed to child support.

In this video we review some key points to keep in mind.

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