Toronto Family Law Lawyer (Part 3): Determining your Income – Relevant Time

Oct 27

Toronto Family Law Lawyer (Part 3): Determining “Income” – Relevant Time

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to getting, varying, or terminating child support in Ontario, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto, Ottawa, Brampton, Hamilton, and other Ontario family law lawyers registered on Dynamic Lawyers who can offer information, advice, and assistance with respect to helping you get, vary, or terminate child support.

As a follow up to my recent blog about child support obligations in Ontario and limitations on that obligation, in this blog, I’ll be discussing what the relevant time period is for determining a parent’s ” income” for the purpose of paying child support (note: this blog won’t deal with the timeline for determining income in respect of retroactive payments).

Remember: a parent’s child support obligations depends on whether they meet certain legal tests. If they are obliged under law to pay, the next question becomes: how much do they need to pay? Well, that depends on their income. But it’s not just any “income” (e.g. income for tax purposes, etc.). It’s actually a complicated legal analysis of what constitutes their income. I’ll try to shed some light in the next few posts about relevant issues when trying to determine a payor’s income.

One such issue that comes to mind is: what is the relevant time period for determining a parent’s “income” for child support purposes?

In a nutshell, the most current information must be used.

The Child Support Guidelines prescribe a method to determine child support. The starting point is the parent’s total income, as shown on his or her income tax return (latest T1 General form issued by the Canada Revenue Agency), and as adjusted in accordance with Schedule III of the Guidelines [s. 16]. The definitions section of the Guidelines provides that, where any amount is to be determined on the basis of specific information, the most current information must be used [s. 2(3)].

In Ward v. Ward, 44 R.F.L. (4th) 340, the Ontario Divisional Court stated the following with respect to the Federal Child Support Guidelines (which mirror the Ontario Child Support Guidelines):

23 In order to identify the table amount of child support the income of the petitioner must be ascertained. In the usual case the income of the payor-parent is identified by using the most current information available (pursuant to s. 2(3) of the Guidelines) and by referring to the “Total income” found in his or her T1 General form issued by Revenue Canada (pursuant to s. 16 of the Guidelines).

This view was reiterated in Muir v. Muir, 44 R.F.L. (4th) 340, where the Ontario Court of Justice observed:

23 I also note subsection 2(3) of the Guidelines which reads as follows:

Most current information – Where for the purposes of these Guidelines, any amount is determined on the basis of specified information, the most current information must be used.

Worth mentioning, however, is that courts have recognized that the amount of income disclosed on the tax return need not necessarily be used: prior to the end of a taxation year and in certain circumstances, a parent can apply to vary child support based on an anticipated reduction in income.

Finally, the court may consider the parent’s last 3 years of income and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years [s. 17(1)]. The objective is to determine the fairest indicator of the individual’s income. Once the parent’s annual income is ascertained, the Ontario Child Support Tables set out the amount of monthly child support payable. For more on using the tables or a child support calculator to determine child support obligations, please refer to my other blogs.