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How Does Child Support Work? | Will Hutcheson, Toronto Family Lawyer  

How Does Child Support Work?

Basic child support

Child Support When There is an Equal or Roughly Equal Access Schedule

Imputing and Calculating Income

Basic child support
The paradigm case for child support is where one parent clearly has the child or children with him or her more than 60% of the time and the other parent has a clear and easily determined pre-tax income.  In that case, the parent who has the children a minority of the time simply looks at the legislated table and finds his or her row which corresponds to income (before deducting for tax or any benefits) and number of children and pays that amount of child support to the parent who has the children a majority of the time each month.  If you want to see what the table says, you can find that at these websites.

http://www.justice.gc.ca/eng/fl-df/child-enfant/look-rech.asp

http://www.mysupportcalculator.ca/


Child Support When There is an Equal or Roughly Equal Access Schedule

If neither parent has the children more than 60% of the time (in other words, the parents each have the children on an equal access or roughly equal access schedule), child support is calculated differently.  There is no automatic formula for calculating child support in such circumstances and the legislation and courts have provided various factors for determining child support.  One common way of determining child support when the parents have an equal access schedule is to determine what table child support from parent X to Y is and to then determine what table child support from parent Y to X is and to then have the parent who earns more pay the difference in these two calculations to the other parent.  This is generally called “set-off child support.”  Set-off child support isn’t necessarily the correct approach though.  If you are in or are contemplating an equal access schedule you should speak with a family law lawyer about child support to make sure that you don’t either overpay child support or get less than you should be getting.


Imputing and Calculating Income

Not everybody has an income that is easy to calculate.  If someone is self-employed and deducts personal expenses as though they are business expenses (whether such deductions amount to tax fraud or are just aggressive but legitimate tax claims) or earns income from a tax-free or tax-reduced source, you need to convert such circumstances into what that person would be earning in a paradigm case in order to determine child support.  Someone who earns $50,000 a year as a teacher, nurse or other salaried employee does not have the same disposable income as someone who earns $50,000 a year tax free (or tax reduced).  Since the table used to calculate child support makes assumptions about things like standard tax rates, the income for someone who doesn’t fit the standard model needs to be adjusted or “grossed-up” before that income is plugged into the table that calculates child support.  The same thing goes for spousal support.

Sometimes someone’s income is so low that there are questions about whether they are intentionally unemployed or underemployed in order to get out of paying child support (the same thing can be true with spousal support).  Courts do not allow parents to do this.  In such cases there would have to be an analysis comparing someone’s income with their ability to earn money based on their health, education etc.  If a court concludes that someone is intentionally earning less than they could reasonably be earning the court can “impute” income to that person, which means that they can pretend that that person earns X dollars per year and require that he or she pay child support on such an income.

Sometimes there are questions about whether someone is being honest about what his or her income is.  There is a whole set of legislation and court cases to deal with the issue of “disclosure” and how to get information to determine whether someone is hiding income (for example by earning cash under the table).