Mediation Lounge
Child Support
Upon separation, child support is formalized. It is not a matter of whether child support is payable, but how much. The amount is largely determined by each parent’s annual gross income before tax deductions, the living (Parenting) arrangement of the children, and the ages of the children. The annual gross income of each spouse is part and parcel of the financial disclosure process in a family mediation. Generally speaking, if one parent has significantly more parenting time with the children (in excess of 60%), that parent may be entitled to more child support on behalf of the children. Notably, child support is tax neutral: the payor may not deduct child support for tax purposes, and the recipient does not include it as income.
A family mediator can help the parties determine the precise child support amount using financial software based on the Federal and Provincial guidelines. Importantly, the parties cannot negotiate the amount of child support itself. They may, however, negotiate what the appropriate annual income of the paying spouse is. The court also has the authority to order a different amount of child support under certain circumstances.
Generally speaking, child support payments are intended to continue until the child is capable of supporting themselves financially. This usually occurs when a child turns 18 or completes their post-secondary education.
It is also worth knowing that a non-biological parent, such as a step-parent, may be legally obligated to pay child support.
Special or Extraordinary Expenses
The Federal Guidelines define “special” or “extraordinary” expenses, also known as “Section 7” expenses. This category of support addresses necessary expenses beyond the base child support payable. Examples include extra-curricular activities such as swimming lessons and sports, dental and orthodontic care, tutoring, and so on. In certain situations, if one parent becomes ill or otherwise disabled and has the majority of the parenting time with the children, this may give rise to Section 7 expenses payable over and above child support.
Spousal Support
Section 30 of the Family Law Act addresses spousal support as follows:
“Every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so.”
Upon separation, if one spouse is significantly disadvantaged by a lack of income, spousal support may be payable by the spouse who earns a higher income. Spousal support sets out to maintain a standard of living for the lower-income spouse, for example where one spouse is a stay-at-home parent with no prospect of the financial means to sustain themselves in the near to medium term. Spousal support addresses this by bridging the financial gap between the spouses. Spousal support is taxable as income to the recipient spouse and tax deductible for the paying spouse.
Spousal support may be paid or received monthly or as a lump sum. Importantly, spousal support paid as a lump sum is tax exempt. With their mediator’s help, the parties may consider creative strategies for addressing spousal support. Where the spouses have agreed that spousal support is warranted, the family mediator can calculate the entitlement or obligation using financial software.
Situations that may give rise to spousal support include:
- First and likely foremost, assisting a spouse facing a sudden reduction in income that leaves them in a precarious financial position after separation.
- A spouse who sacrificed their own income prospects during the marriage for the betterment of the other spouse. This may include what is termed a “compensatory claim”.
- The length of the marriage.
- The role of each spouse during the marriage.
- The age of each spouse at the time of separation.
- Previous orders (if any) stipulating whether spousal support was payable, and how much.