After a child support order has been granted, it is not uncommon for a payor's income or circumstances to change and obligations to inevitably change along with it. However, sometimes the original child support payment continues long after it should, either on accident or intentionally. The question arises, can the court retroactively vary child support? For example, what if the payor was paying child support at an income of $70,000.00 but their income changed over a year ago to $50,000.00, such that they have been paying based on a higher income for all this time? The Supreme Court recently clarified the test for retroactive child support adjustments. Importantly, they made clear that both the recipient and the payor can make use of this test, although the payor has more obligations when it comes to providing notice of the material change. Section 17 of the Divorce Act allows the court to retroactively vary child support orders:
17 (1) A court of competent jurisdiction may make an order varying, rescinding or suspending, retroactively or prospectively,
(a) a support order or any provision of one, on application by either or both former spouses;
(b) a parenting order or any provision of one, on application by
(i) either or both former spouses, or
(ii) a person, other than a former spouse, who is a parent of the child, stands in the place of a parent or intends to stand in the place of a parent; or
(c) a contact order or any provision of one, on application by a person to whom the order relates.
However, the outstanding question was how to effectively apply this provision to retroactive variation proceedings. Recently, the Supreme Court of Canada, in Colucci v Colucci, 2021 SCC 24, outlined the appropriate steps the court must engage in:
(1) The payor must meet the threshold of establishing a past material change in circumstances. The onus is on the payor to show a material decrease in income that has some degree of continuity, and that is real and not one of choice.
(2) Once a material change in circumstances is established, a presumption arises in favour of retroactively decreasing child support to the date the payor gave the recipient effective notice, up to three years before formal notice of the application to vary. In the decrease context, effective notice requires clear communication of the change in circumstances accompanied by the disclosure of any available documentation necessary to substantiate the change and allow the recipient parent to meaningfully assess the situation.
(3) Where no effective notice is given by the payor parent, child support should generally be varied back to the date of formal notice, or a later date where the payor has delayed making complete disclosure in the course of the proceedings.
(4) The court retains discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair. The D.B.S. factors (adapted to the decrease context) guide this exercise of discretion. Those factors are: (i) whether the payor had an understandable reason for the delay in seeking a decrease; (ii) the payor's conduct; (iii) the child's circumstances; and (iv) hardship to the payor if support is not decreased (viewed in context of hardship to the child and recipient if support is decreased). The payor's efforts to pay what they can and to communicate and disclose income information on an ongoing basis will often be a key consideration under the factor of payor conduct.
(5) Finally, once the court has determined that support should be retroactively decreased to a particular date, the decrease must be quantified. The proper amount of support for each year since the date of retroactivity must be calculated in accordance with the Guidelines.
For even greater certainty, the quantum of child support is simply the amount set out in the child support tables, based off of income of the payor and the number of children. While the court created the presumption of retroactive support after a material change had been found, another significant part of this case was the discussion on disclosure. Put simply, the court expects parents to exchange financials accurately and promptly and they do not want to reward parents for failing to do so:
After applying the Guidelines and D.B.S. for many years, it has become clear just how much the child support system, including s. 17 variations, depends upon adequate, accurate and timely financial disclosure. The centrality of disclosure in child support matters has been recognized in a rich body of jurisprudence both before and after D.B.S…Simply stated, disclosure is the linchpin on which fair child support depends and the relevant legal tests must encourage the timely provision of necessary information.
…
In keeping with these developments, the exercise of judicial discretion and the setting of legal standards under s. 17 of the Divorce Act must encourage financial disclosure and in no way reward those who improperly withhold, hide or misrepresent information they ought to have shared. Proactive disclosure of changes in income is the first step to ensuring that child support obligations are tied to payor income as it fluctuates. Inadequate disclosure breeds "a backlog of [retroactive] support applications" (Roseberry, at para. 61).
The scenario is easy to imagine: a parent is overpaying child support for years without realizing, while simultaneously withholding their financial information from the other parent for whatever reason. In this scenario, the recipient of child support is not even aware they are being overpaid, but yet, they are using the child support money as they normally would.
The Supreme Court has provided guidance on retroactive child support matters. Colucci v Colucci, 2021 SCC 24 demonstrates the appropriate principles in these cases. Significantly, the court retains discretion in retroactive child support cases.
