The introduction of the Child Support Guidelines successfully reduced the amount of litigation over child support. This prompted the federal government to commission two leading family law professors to create similar guidelines for the payment of spousal support. The result was the Spousal Support Advisory Guidelines (the “SSAGs”).
Unlike the child support guidelines, the SSAGs are not law, which must be followed in every case. However, judges will nearly always take them into consideration when making spousal support awards.
The SSAGs differ from the child support guidelines in that they provide a range of possible support levels – low, mid, and high – and the duration of support is flexible. This means judges can tailor both the quantum and duration of support to reflect the particular circumstances of the relationship.
Spousal support calculations are complicated, particularly where the parties have children. Specialized software has been developed to factor in all the variables that go into determining the ranges of support.
Entitlement to spousal support is based on three possible heads: contractual, compensatory and non-compensatory.
The contractual head is present where the amount of spousal support (or a waiver thereof) is set out in a domestic contract such as a prenuptial agreement or marriage contract. In such cases the parties have decided between themselves what spousal support should be and, presuming the contract is valid, the SSAGs are not normally applied unless the contract makes reference to them.
Compensatory support seeks to compensate a spouse for sacrifices made (e.g. loss of career opportunities) during the relationship.
Non-compensatory support, also known as “need-based” support, seeks to help a spouse become self-sufficient after separation.
Many cases involve both these latter bases of support. For example, a spouse who stayed at home to care for children during a relationship may be entitled to both compensatory support for sacrificing career prospects and non-compensatory support to assist him or her as he or she seeks to re-enter the workforce.
The duration of spousal support is most often determined by considering the length of the marriage, although in certain cases the ages of the children can also be a factor.Read More
Up until 1997 the level of support for children upon the breakdown of a relationship was inconsistent and unpredictable as there were no guidelines as to what that level should be. Not only were children disadvantaged by inadequate levels of support, but the courts were clogged with parents arguing over quantum.
In 1997 the federal government decided to step in by creating a set of tables setting out standard amounts of child support payable, known today as the Child Support Guidelines. All provinces have effectively adopted their own guidelines to this effect.
Currently, child support is calculated based on the income of the “non-primary” parent (the parent with the child(ren) less than 40% of the time – the “Payor”) and the number of children being provided for. The tables provide a monthly amount payable in nearly all cases.
Cases where both parents have the children for at least 40% of the year are more complicated. One approach is to calculate what each parent would owe the other under the table amount and then do a “set-off” where the higher earning parent pays table amount less whatever the other parent would owe them. (eg. if Parent A would owe $1,000 and Parent B would owe $500, Parent A would pay Parent B $500). In such situations this is but one approach.
In Ontario as in all Canadian jurisdictions child support is the right of the child, not the right of the parent receiving it. Courts are thus extremely reluctant to allow parents to make alternative arrangements which ignore the Guidelines, unless they are completely satisfied that the child’s/children’s interests are protected.Read More
It may be obvious to most that legal fees can add up quickly when one is required to hire a lawyer to pursue child or spousal support. However, what may be a surprise is that the Income Tax Act actually provides relief by allowing for the deduction of legal fees incurred in obtaining support. “Great!” you say? Not so fast.
What is even more surprising is that the permissible deductions are entirely one-sided. The individuals receiving support payments (“support recipients”) are permitted to take these deductions, while the support payors are left with no tax relief whatsoever. This remains true even if the support payor had to defend against an unwarranted claim by the support recipient. Fair? Not really, but unfortunately that is the reality under the Income Tax Act. It is important for support recipients who are able to take advantage of this benefit to understand the law and how it applies to them.
Fortunately, the law is surprisingly straightforward. The person receiving any type of support payment can deduct their legal fees from their income on their tax return for the year the fees were paid. The fees claimed must have been for any of the following purposes:
- Collecting late support payments and/or enforcing an existing court order or separation agreement to collect child or spousal support;
- Establishing the amount of support payments to be made by the current or former spouse or common law partner;
- Establishing the amount of support payments to be made by the legal parent of the child where the support is to be paid as a term of a court order;
- Varying the amount of support being received; or
- Opposing a claim to reduce support.
If the legal fees paid relate to any of the above, the amount of those fees can be deducted from income. For example, if the support recipient’s income was $50,000 in 2013 and he also paid $10,000 in legal fees related to any of the purposes above, then $10,000 (less any cost awards) maybe deducted from income directly leaving a taxable income of $40,000.
On the other hand, it is important to note that legal fees paid for the following purposes are not deductible:
- Obtaining a separation or divorce;
- Establishing custody of or visitation arrangements for a child; or
- Preventing a higher support order and/or challenging a claim for support, where the defending party is the payor.
To take advantage of this deduction, you should request a letter from your lawyer indicating the amounts paid for legal fees within the taxable year and the specific percentage and/or amounts directly related to any of the purposes above.
If this information is news to and you have previously paid legal fees that could have deducted in a previous year, we suggest speaking with an accountant to determine the cost-effectiveness of re-filing your tax return in order to claim the deduction.
While the benefit of deducting legal fees from income for tax purposes can provide some much needed relief for support recipients, support payors are regrettably on their own. Unfortunately, this unequal treatment under the Income Tax Act may be something to consider when deciding whether to zealously litigate such matters or find an alternative method of resolution.
The above is only general information about this point of law. If you require more information or advice, consult a lawyer about your options as your case may be different depending your circumstances.Read More
Has your court order, separation agreement, or paternity agreement dealing with support been filed with the Family Responsibility Office (FRO)?
Navigating the process of support enforcement in Ontario can be a confusing, frustrating and sometimes frightening process, but keep the following helpful tips in mind whether you are a support payor or a support recipient.
- Read the FRO website.
- The FRO website (http://www.mcss.gov.on.ca/en/mcss/programs/familyResponsibility/index.aspx) has basic information on its site along with important FRO forms like Notices of Withdrawal and Registration for Direct Deposit.
- Don’t throw anything out!
- If you receive unexpected mail from the Ontario government don’t bury your head in the sand and throw it out! It may contain important information about the enforcement of your case with FRO.
- Don’t ignore FRO.
- Regardless of whether you are a support payor or a support recipient, don’t ignore FRO. Ignoring FRO can have significant consequences for your case, which can include increased enforcement or stopped support payments.
- Keep FRO posted about major changes.
- Whether you are a support payor or support recipient, if you change your contact information, inform FRO. Not letting FRO know about a change in contact information may result in stopped support payments or rising arrears. If a child is no longer entitled to support under the support order, inform FRO as soon as possible.
- Be civil, patient, courteous and persistent with FRO.
- It should go without saying that civility, courtesy and patience are vital when dealing with FRO and can only help your case. Patience is especially important, but persistence may also be necessary.
- FRO cannot give you information about the other party.
- Because of privacy laws FRO cannot give you certain information about the other party, including their contact information.
- You can have your lawyer or another person contact FRO on your behalf.
- You can authorize someone else to help you with contacting FRO. You will need to complete, sign, and send in a Third Party Authorization form, which can be found on the FRO website.
- FRO can enforce more than support.
- Besides child and spousal support FRO can also enforce section 7 expenses (special and extraordinary expenses), health and life insurance premiums, interest on support orders, and court costs if it is in a support order or agreement.
- FRO enforces support orders, but cannot change them.
- If you think support should be increased or decreased you may need to change the order FRO is enforcing, whether that means filing a new agreement with the court and FRO after negotiating with the other party or going to court to change it.
- FRO can be slow, but once it starts moving on your case it can have a significant impact on your life.
- FRO’s case load is enormous so they may move slowly on your case at first. However, be aware that once they begin moving on your case their enforcement may be a lot quicker and more significant. For example, you have only 30 days to respond to an intention to suspend driver’s licence letter.
- FRO has a large arsenal of tools at its disposal, both in and out of court.
- FRO can take many steps to enforce a support order, including reporting you to credit bureaus, garnishing lottery winnings, garnishing your pay cheque, garnishing your income tax return, asking the Ministry of Transportation to suspend your driver’s licence and asking the federal government to suspend your passport.
- One of the most significant steps FRO can take is to initiate a default hearing. This is an important step for FRO before it can ask a court for a jail term to compel a support payor to pay support. If you have received notice of a default hearing, it is advisable to immediately consult a lawyer about your options.
- If FRO is enforcing your support order don’t pay or receive money unless through FRO.
- Needless complications arise if you pay support monies or accept money without FRO knowing, such as incorrect arrears, which cannot be easily adjusted and enforcement action arising from incorrect arrears.
- Keep records of amounts of support paid or received.
- If you have paid support to the support recipient directly keep track of those amounts carefully and make sure there is good proof and that proof indicates that it is for support. Cash is one of the most unreliable methods of payment of support.
- If you have received money from the support payor directly keep track of the amounts and whether or not they are for support. If you received these amounts while FRO is enforcing your support order or agreement be aware that if you continue to do so FRO may stop enforcement on your case.
- FRO cannot get back overpaid monies.
- If you are a support payor and end up overpaying support, FRO cannot help you get back the money from the support recipient. At most you will end up with a “credit” on your account, so future support payments will be deducted from the “credit”.
- Disputing arrears and need more information? Request a Director’s Statement of Arrears.
- If you are disputing the amount of arrears FRO says you owe or are owed, the Director’s Statement of Arrears can be a helpful tool to figure out amounts. It is a statement of account which keeps track of the arrears in your case, including monies in/out, periodic support obligations and various adjustments.
- A Director’s Statement of Arrears may be requested on the phone or by faxing a form which can be found on the FRO website. The first one is free, but subsequent Director’s Statements of Arrears costs $25 each.
Keep in mind the above tips are only general information about your relationship with FRO. If you require more information or advice, consult a lawyer about your options when it comes to support enforcement, as your case may be different depending your circumstances.Read More
Many people are unaware of the most fundamental issues with respect to their estate. Here are some basic points that everyone should be aware of:
- Everyone should have a will. If you do not have a will, there are rules, case law and statute law, which determine how your estate will be distributed. This is known as an “intestacy”. Should you wish to have some say and control over your estate, you must have a will.
- Should you prepare a subsequent will, the new will should always contain a standard clause which nullifies and makes void any prior will.
- A person can make a valid will (called a holograph will) by writing it out entirely by hand, dating it, and signing it immediately below. No witnesses are needed. This is not advisable and we specifically recommend that you never do this unless you are facing immediate death and there is no alternative. It is very difficult to fully comply with the legal requirements necessary when preparing this kind of will.
- A person may create a new will, changing their estate distribution significantly, without advising anyone. This is particularly relevant for parties who are divorcing. In a separation agreement a divorcing couple can make any sort of agreement which they wish concerning wills, but with respect to their wills, immediately thereafter either of them can change it without the other party being aware.
- If you are married and your spouse dies, you can elect to take equalization of net family property, or to take what you are given under the will (or what you would receive under the intestacy).
- Intestacy will only operate and result in an inheritance if you are married. Otherwise, there must be a will.
- Property can be held in conjunction with another person in a number of different manners, the most common being joint tenancy or tenancy in common. Upon death of a party, joint tenancy dictates that the surviving party becomes the sole owner of the property. A will need say nothing on that point. Tenancy in common specifies the percentage interest that each party has. For example, if the parties decide that they will each hold a 50% interest in the property (referred to as an “undivided interest”), upon the death of one party the other party does not become the sole owner of the property. Rather, the deceased party’s interest devolves to their estate.
- A will must be abundantly clear in what it purports to do. It should be drafted with a mind to how people will act after your death. You should assume that there will be a dispute unless you draft everything so clearly that there is no question that can be made an issue in a litigation proceeding.
- A trust can sometimes be a helpful vehicle, assisting in dealing with your estate.
- A spouse may be eligible for some government benefits in the event of the other spouse passing.
- For the purpose of equalization of net family property in a divorce, anything that a person receives as a beneficiary under a will, is exempt.