Base, or table, child support is based on the payer's income. As the payer's income goes up, the table amount keeps going up along with it – even for high income earners. That can result in the table amount of support being tens of thousands of dollars in child support a month. Will Family Court Judges order more child support than a parent could ever spend on the child? This blog looks at some factors the court may consider in setting child support for high-income earners.
To start, Canadian courts have long held that child support is the right of the child; both parents have an obligation to financially support their child, based on their income, and this obligation cannot be waived by the payee parent and is not destroyed by the breakdown of the parents' relationship. Moreover, child support should, as much as reasonably possible, provide children with the same standard of living that they were accustomed to when their parents were together.1
However, there is a limit to how much support a child needs and there are some factors that courts are willing to consider adjusting the amount of child support. But there are also factors that judges will not consider and raising them will just get a parent on the judges' bad side.
The Starting Point: What the Child Support Guidelines Say About High Incomes
The first step to calculating the child support owed by you or your child's parent is to determine the proper "table amount." These amounts are prescribed by regulation under the Federal Child Support Guidelines and the Ontario Child Support Guidelines. The amounts are the same under both tables; however, if you are applying for child support under section 15.1 of the Divorce Act, you should refer to the federal guidelines and if you are applying for child support under section 33 of the Family Law Act, you should refer to the provincial guidelines. You can only apply under the Divorce Act if you were married to your child's parent; otherwise, you must apply under the Family Law Act.
The regulations provide a set amount of child support depending on the payor parent's income and the number of children that the payor parent is obligated to support. The highest income on the table is $150,000 but that does not mean the tables stop there. At the end of every table, there is a percentage of the payor's income that should be paid as child support. That percentage goes up with the number of children. With that percentage, the amount of child support continues to grow indefinitely as the payor's income goes up. Even if the payor's income is in the billions of dollars, the formula gives a table amount. For an income over a billion dollars per year, the child support would be over a million dollars each year.
Section 4 of both the federal and provincial guidelines explain the procedure for determining the child support obligation for a payor parent who earns more than $150,000:
Incomes over $150,000
- Where the income of the parent or spouse against whom an order for the support of a child is sought is over $150,000, the amount of an order for the support of a child is,
(a) the amount determined under section 3; or
(b) if the court considers that amount to be inappropriate,
(i) in respect of the first $150,000 of the parent's or spouse's income, the amount set out in the table for the number of children under the age of majority to whom the order relates,
(ii) in respect of the balance of the parent's or spouse's income, the amount that the court considers appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each parent or spouse to contribute to the support of the children, and
(iii) the amount, if any, determined under section 7.
Section 3 of the federal and provincial guidelines provides that:
Presumptive rule
- (1) Unless otherwise provided under these guidelines, the amount of an order for the support of a child for children under the age of majority is,
(a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the parent or spouse against whom the order is sought; and
(b) the amount, if any, determined under section 7.
As such, there are two options to determine the amount of child support owed by payor parents who earn over $150,000:
- The Table Amount
For a payor parent who earns more than $150,000, the table amount would be the set amount for $150,000 plus a percentage of any of the payor parent's income over $150,000. For example, take a payor parent who has two children and earns $400,000. Under the federal and provincial guidelines, the base amount for two children for the first $150,000 of income, as of the writing of this article, is $2,077 per month. Additionally, the payor parent owes a prescribed percentage of any of their income over $150,000. Here, the prescribed 1.2% of the remaining $250,000 would be $3,000. As such, according to the table, the payor parent would owe $5,077 per month for their two children.
- An Amount the Court Considers Appropriate
However, per section 4(b) of the federal and provincial guidelines, these amounts may not always be appropriate and can be varied by the courts if necessary. To do so, the payor parent must establish that the amount is in excess of the child's reasonable needs that it is inappropriate or unsuitable.
If so, the payor parent will be responsible for paying the table amount, depending on the number of children, for their first $150,000 of income, and an additional amount which the court finds appropriate. Here, courts will consider:
- the condition, means, needs and other circumstances of the children who are entitled to support; and
- the financial ability of each parent or spouse to contribute to the support of the children.2
When Can Child Support Be Varied Under Section 4?
In general, courts are highly reluctant to depart from the table amount of child support. Likewise, there is a strong presumption towards using the table amount for all incomes over $150,000. This presumption can only be rebutted by the payor spouse with clear and compelling evidence.3 The closer that a payor parent's income is to $150,000, the more likely it is that the table amount will be upheld.4
In general, the table amount will not be varied under section 4 for the following reasons:
1. LOWER CHILD SUPPORT PAYMENTS MADE TO OTHER CHILDREN OF THE PAYOR
In Pakka v Nygard, the payor parent had an income of $2.2 million, owed $15,091 per month in child support per the table amount, and was only paying $3,000.5 The payor had several children with different women; some lived in Canada and some in the United States. In an effort to treat all of his children fairly, he sought to pay only $3,000 in support for each child. Justice Kitelely rejected this argument; parents cannot unilaterally determine what is "fair and equal treatment" and the payor was acting contrary to the laws of Ontario.6
2. THE PROPOSED BUDGET FOR THE CHILD IS LOWER THAN THE TABLE AMOUNT AND INCLUDES A HIGH AMOUNT OF DISCRETIONARY SPENDING
The fact that the table amounts exceed the budget prepared by the payee parent is not determinative and courts have awarded table amounts which allow for a large amount of discretionary spending.
In Pakka, as discussed above, the payee parent prepared a budget for the child of $6,545 per month, and was awarded the full table amount of $15,091, resulting in $8,000 a month in discretionary spending. Justice Kiteley found that the needs of the child, as expressed in the budget, was only one factor in the court's analysis and the size of the table amount is not a sufficient reason to vary it.7 Also relevant to this case was the $300,000 that the payor owed in child support arrears.
In cases involving very wealthy payor parents, reasonable amounts of child support often include high amounts of discretionary spending.8 Moreover, it is reasonable for the payee parent to incur similar discretionary expenses as the payor parent to ensure that the child enjoys a similar standard of living in both households.9
3. THE PAYOR HAS HIGH DEBTS
Courts are generally unsympathetic to payors who attempt to vary the table amount based on their debt. In Sordi v Sordi, the payor parent argued that it would be unconscionable for him to pay the table amount of child support for his full income because of his high debt load. If the children's needs could not be met, then the payee should move to cheaper accommodations or sell the former matrimonial home. At the time of the trial, the payor had spent $1.5 million in legal and expert fees; both Justice Timms and the payee parent considered this debt to be self-imposed and unnecessary.10
In Ridley v DeRose, the payor parent included a $6,000 loan repayment to his mother in his monthly expenses. Justice Tobin ruled that the payor had not established that the table amount was inappropriate; he could support himself, his wife and her children, accumulate assets, pay an "apparently arbitrary amount of the monthly debt payment", and has discretionary spending.11
4. THE PAYOR HAS A HIGHER COST OF LIVING
In McGouran v Connelly, Justice Feldman rejected the payor parent's argument that the higher costs of living in the United Kingdom compared to Canada made the table amounts in appropriate. He recognized the slippery slope of such a recognition:
...if one were to begin to recognize and adjust for discrepancies in the cost of living just to calculate income, such discrepancies would not be limited to countries, but could extend to cities or even smaller areas, and would require extensive evidence in each case. The inquiry would become cumbersome, expensive and potentially unworkable.12
5. WHEN THE PAYOR PARENT HAS AN UNCERTAIN INCOME
In Simon v Simon, the Court of Appeal considered whether the table amount should be ordered for a professional hockey player, who earned $1.4 million, but worked in a career characterized by uncertainty and risk. Justice MacPherson declined to vary the amount and held that child support payments should not be varied in anticipation of a decreased future income.13 However, the table amount will not be retroactively awarded when the payor parent has a single year of extraordinarily high income which will likely not be repeated.14
However, the table amount will likely be varied in the following circumstances:
1. WHEN THE TABLE AMOUNT CONSTITUTES A WEALTH TRANSFER BETWEEN PARENTS
Francis states that "...at a certain amount, support payments will meet even a wealthy child's reasonable needs" and that table amounts can be "so in excess of the children's reasonable needs that it must be considered to be a functional wealth transfer to a parent or de facto spousal support."15
Courts have often found that the table amounts of child support constitutes a wealth transfer when the payee parent includes in their proposed budget funds for future expenses which do not meet the current needs of the child.16
2. IN ACCORDANCE WITH THE FAMILY'S ESTABLISHED LIFESTYLE AND PATTERN OF EXPENDITURES
The purpose of the provincial and federal Guidelines is to establish fair levels of support in a predictable and consistent manner and to ensure that the dissolution of the parents' relationship affects the children as little as possible.17 As such, the established lifestyle and pattern of expenditures of the family unit prior to the separation is a relevant consideration.
In R v R, the payor parent earned $4.1 million, and the payee parent sought the table amount of $65,000 for the parties' four children. The Court of Appeal only awarded $32,000 due to the family's modest lifestyle during the parties' relationship. Justice Laskin held that:
If the children's reasonable needs, including reasonable discretionary expenditures, are being met by the parties' pre-separation lifestyle — even if that lifestyle is comparatively modest — and the paying parent's income does not increase after separation, I do not think it is for the court to award child support that reflects a different, more lavish lifestyle. The Guidelines are meant to ensure fair levels of support, but to repeat Bastarache J.'s words in Francis v. Baker, also to ensure "that a divorce will affect the children as little as possible".18
3. WHEN THE PAYEE PARENT SEEKS A HIGHER STANDARD OF LIVING
When the payor parent can prove that a child's needs have been adequately met with a lower amount of child support, then the courts are more likely to stray from the higher table amount. However, Justice Cleghorn held that the payee parent cannot use the table child support amounts to make the child's standard of living higher in their home than the standard of living in their payor parent's home.19
This does not mean that child support payments can never be used to increase the child's standard of living; courts have allowed this when the payor parent's income increases dramatically post-separation. In R, the payor parent earned $1.4 million during the relationship, and his income skyrocketed to $4.1 million post-relationship. Justice Laskin found that in these cases, the children are entitled to benefit from their parent's increase in income:
It is one thing for the family to live modestly and save money while together; it is quite another, and seemingly unfair, for the paying parent to hold his children to the family's pre-separation lifestyle while saving the increase in his post-separation income, but now for his benefit alone.20
Even in this case, as noted above, the Court of Appeal only ordered half of the table amount of child support. This also does not apply when the payor parent's increase in income is only temporary; the court rejected a payee parent's application for $650,000 a year in child support (or $55,000 a month) for the payor parent's one-time annual income of $7.5 million, followed by $445,000 and $236,000 in subsequent years. Here, the court found that the payee parent would not be able to sustain the child's higher standard of living on the payor parent's dwindling income.21
It may seem that some of these considerations are contradictory. When parent's incomes are high, or complex, child support issues can be complicated. It is no longer a case of taking a figure off a tax return and plugging it into an online calculator or cross-referencing it on a child support table. There are additional considerations and opportunities that make it worthwhile to speak to an experienced family law lawyer.
This blog was co-authored by law student, Leslie Haddock.
Footnotes
1. For example, see DBS v SRG, 2006 SCC 37 at para 38.
2. See sections 4(b) of the Federal Child Support Guidelines, SOR/97-175 and the Child Support Guidelines, O Reg 391/97.
3. Francis v Baker, 1999 CanLII 659 (SCC) at paras 42-43 [Francis].
4. Deslauriers v Pommainville, 2017 ONSC 3162 at para 77 [Deslauriers].
5. Pakka v Nygard, 2002 CanLII 62431 (ON SC).
6. Ibid at para 51.
7. Ibid at para 66.
8. Tauber v Tauber, 2000 CanLII 5747 (ON CA) at para 40; Jung v Johnson, 2015 ONSC 6734 at para 30 [Jung].
9. Deslauriers, supra note 4 at paras 59 and 81-82.
10. Sordi v Sordi, 2010 ONSC 2344 at paras 226-227.
11. Ridley v DeRose, 2017 ONCJ 877 (CanLII) at paras 162-163.
12. McGouran v Connelly, 2006 CanLII 7668 (ON CA) at para 29.
13. Simon v Simon, 1999 CanLII 3818 (ON CA) at para 27.
14. Tamo v Husband, 2023 ONCJ 233 (CanLII) where the payor parent earned $7.5 million in one year due to the exercise of stock options and sale of shares [Tamo].
15. Francis, supra note 3 at para 41.
16. Tamo, supra note 14 at para 73; Jung, supra note 8 at para 30.
17. Francis, supra note 3 at para 39.
18. R v R, 2002 CanLII 41875 (ON CA) at para 51 [R].
19. Tamo, supra note 14 at para 63.
20. R, supra note 18 at paras 57-58.
21. Tamo, supra note 14 at para 63.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
