David Harris-Lowe, Associate, Family Law
One of the first steps to determine the amount of child support to be paid is to determine the income of the parties. The starting point for determining your income is line 150 of your tax return, but this is often not the end. If you are a commissioned employee, a professional or union member, self-employed or working for a family business then there are many adjustments required to determine your income to calculate child support. Once your incomes are determined then the amount of support payable is calculated by reference to the child support table.
If you are earn an income more than $150,000.00 annually then your lawyer should consider section 4 of the Child Support Guidelines, which says that if the table amount of support is inappropriate, then the table amount payable can be adjusted to an appropriate amount with regard to you or your ex-spouses income over $150,000.00 each year taking the children’s circumstances into account.
This issue was considered recently in McNeil v. McNeil, by the Court of Appeal in New Brunswick. The payor in that case had exercised stock options in 2005 and never told the support recipient. His line 150 income was well over $150,000.00 as a result. The recipient found out about this in 2011 and sought to have additional child support payable on account of this higher income. After a motion the Court of Appeal decided not to include the payor’s stock options in his income because it was non-recurring and didn’t result in disposable income to the payor. In other words, the amount of support payable because of his exercise of stock options would have amounted to transferring wealth to the children’s mother and would not have focused on the needs of the children.
There are several lessons to be learned from this case:
a) Disclose your income situation accurately and annually. Hiding what your income is often leads to problems and court.
b) Some people think that retroactive child support can only be considered for the last three years. This case considered child support from six years before.
c) If you are or become self-employed or receive other ‘unusual’ income, you should speak with your lawyer whether this will affect your child support obligations.
Had the payor in this case disclosed his income and received good legal advice, one wonders whether the matter would have even gone to a motion, let alone the Court of Appeal.