The Basics of Child and Spousal Support – Previously Married Couples
The Basics of Child and Spousal Support – Previously Married Couples
In this blog, explore how child and spousal support payments are calculated and how your annual income, whether simple or complex, is one of the major determining factors.
Divorce is a common occurrence in Ontario. The current expectation is that around 40% of married couples will divorce before their thirtieth anniversary. With this in mind, it is important to understand the basics of how child and spousal support are determined for previously married couples.
Child Support in Ontario
Canada’s Divorce Act states that divorced parents have to support any “child of the marriage” (biological and adopted children), who are either:
- under the age of majority; or
- have reached or are above the age of majority but continue to be dependent due to illness, disability or other cause.
In Ontario, the amount of support required is set out in the Federal Child Support Guidelines. These Guidelines include tables that specify basic support amounts based upon the number of children of the marriage and the parent’s annual income. The parenting arrangement (sole custody, split custody, or shared custody) also impacts how child support is determined.
In addition to the basic support amounts, extra support can be granted if there are any special or extraordinary expenses that are necessary for your child’s best interests and reasonable considering the family’s spending patterns prior to separation. For example, expenses for the child’s healthcare, childcare, education, or extracurricular activities could qualify as special and extraordinary expenses.
In some situations, the support can be reduced if the calculated amount results in undue hardship, meaning that your household’s standard of living is lower than the other parent’s household’s standard of living, and either your circumstances make it hard to pay the calculated amount or support the child based on the calculated amount.
Spousal Support in Ontario
Although there are several complexities in determining child support, determining spousal support makes child support appear simple. Like the Federal Child Support Guidelines, the Spousal Support Advisory Guidelines include formulas for determining a support calculation. But unlike the prescription of child support calculations, the Spousal Support Advisory Guidelines only result in recommended amounts. Spousal support is highly case-specific.
Spousal support may be necessary if payment would meet one of the main purposes of spousal support, as listed in the Divorce Act:
- to compensate a spouse who sacrifices his or her ability to earn income during a marriage;
- to compensate a spouse for the ongoing care of children, over and above any child support obligations; and
- to help a spouse in financial need arising from the breakdown of the marriage.
In conjunction with the calculations in the Spousal Support Advisory Guidelines, there are many factors that can influence both the amount and duration of spousal support. A few factors include:
- the financial means, needs and circumstances of the spouses;
- the length of time the spouses lived together;
- the roles of each spouse during the marriage;
- the impact of the marital breakdown on each spouses’ current financial positions; and
- the ongoing childcare responsibilities.
Just as each marriage is unique, each divorce is unique, and thus each spousal support arrangement is unique.
Income for Support Purposes
The determination of both child and spousal support is a complex process. There are a number of factors influencing the calculation, but one of the key factors is annual income. For some individuals, annual income is as simple as employment income plus a little interest from the bank. For others, a web of corporate holdings and an international presence can make the income determination more complex.
Whether your income is simple, complex, or anywhere in between, the experts at Davis Martindale can help determine an appropriate income to calculate support. Call us today for a personalized discussion.
Co-Authors
Ron Martindale
BASc, CPA, CA, CBV, CFF
Partner
Valuation & Litigation
Louise Poole
CPA, CA, CBV, CFF
Partner
Valuation & Litigation
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