High income earners and child support in Ontario

High incomes can necessitate a departure from the “table support” amount for child support purposes. Table support refers to the prescribed provincial child support amount having regard to the number of children and the income of the payor, pursuant to each province's respective table. The threshold to depart from the table amount is income $150,000 and over.

For incomes over $150,000, the table amount is a set amount, depending on the number of children, plus a percentage of all income over $150,000—consequently, this can lead to unfair results. For example, for two kids in Ontario, an income of over $150,000 yields child support in the amount of $2,077 plus 1.2% of all income over $150,000. This means that if a person was earning $2,150,000 per year, for example, their child support table obligation would be $26,077 per month. But just because a parent earns a high income does not automatically mean that they are used to spending a large portion of that income on childcare expenses when the parental relationship was intact, or going forward, as the table amount would insinuate. And it does not mean that the recipient parent is going to use $26,077 per month on their children. So why should the recipient parent get over $26,000 per month? As mentioned, there is an opportunity to argue against table support for these sorts of incomes. The guiding provision is at section 4 of the Federal Child Support Guidelines:

4 Where the income of the spouse against whom a child support order is sought is over $150,000, the amount of a child support order 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 spouse’s income, the amount set out in the applicable table for the number of children under the age of majority to whom the order relates;

(ii) in respect of the balance of the 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 spouse to contribute to the support of the children; and

(iii) the amount, if any, determined under section 7.

The leading Supreme Court Case on income over $150,000 is Francis v Baker, 1999 CarswellOnt 2734. A helpful summary is provided in the Ontario Court of Appeal case in R v R, 2002 CarswellOnt 902:

Trial judges have discretion either to increase or decrease the table amount if they consider that amount inappropriate and instead to order an amount that they consider appropriate.

There is no automatic right to an amount other than the table amount of support. But if the court is to consider an amount different from table support, in situations where income is over $150,000 per year, then it must be because the table amount is inappropriate.

The table amount, however, is presumed to be the appropriate amount. A parent seeking an order different from the table amount bears the onus of rebutting the presumption in s. 3 of the Guidelines and must do so by "clear and compelling evidence". The sheer size of the table amount is not by itself an "articulable reason" for departing from it.

This means that the payor always has the onus of establishing that the table amount is inappropriate and must do so to a high standard.

Although the considerations relevant to an appropriate child support order will differ from case to case, the courts must at least have regard to the objectives of the Divorce Act and the. Guidelines, and to the factors expressly listed in s. 4(b)(ii) of the Guidelines. The legislative objectives are intended to ensure "that a divorce will affect the children as little as possible" and the factors in s. 4(b)(ii) further that intent by emphasizing "the centrality of the actual situation of the children".

Section 4(b)(ii) of the Guidelines iterates that child support must have regard to the “…condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children….” This effectively means that the test is not what is reasonable for the average child but rather what is reasonable for the particular child in question, especially having regard to the historical spending patterns of the family unit.

Child support should meet a child's reasonable needs. For children of wealthy parents, reasonable needs include reasonable discretionary expenses. A paying parent who claims the table amount is inappropriate must, therefore, demonstrate that budgeted child expenses are so high that they "exceed the generous ambit within which reasonable disagreement is possible", in short that the budgeted expenses are unreasonable. Table amounts that so far exceed a child's reasonable needs that they become a transfer of wealth between the parents or spousal support under the guise of child support will be inappropriate.

The point here is that typically, in cases where the table amount is being challenged, the challenge will lie in the budgeted expenses of the recipient parent used to justify the table support. And so, it is perfectly normal to request a child budget for the purposes of this analysis, from the recipient. Then an analysis will be had into the reasonability of said budget.

In Merrit v Merrit, 2010 ONSC 4959, the father, earning $500,000, successfully rebutted the

table amount presumption after finding the mother’s budget arbitrarily increased within the space of a few months, suggesting that she was hiking the budget with the court proceeding in mind:

48 In comparing the first budget with the second and third ones, it appears that the expenses related to the children have increased dramatically. The daycare and babysitting costs of $875.00 per month appear excessive given that three of the children are in school and the Applicant is a stay-at-home mother. The family clothing expenses of $300.00 per month have increased to $800 per month for the children and $600.00 per month for the Applicant. The children's activities expenses have increased from $200 per month to $600 per month. Even if I accept that the Applicant may have omitted some necessary expenses for the children in the first Financial Statement, and that a reasonable portion of the housing, utilities and household expenses would be allocated to the children, it is still difficult to find that child support of $9,224.00 per month is appropriate.

As such, an amount lesser than the table amount was ordered in this case because the court effectively found that the mother’s budget was arbitrarily inflated. This does not mean that budgets cannot be high or extreme. It means that in this case, the budget was not actually normal for the children in question.

Obvious takeaways? If a parent earns income over $150,000, there may be argument that table support may be inappropriate However, this can only be determined based on an analysis into the needs and circumstances of the child in question, what sort of budget the child is used to, and whether the proposed budget is reasonable. This is done on a case-by-case basis.