By Casey McQueen

What you need to know about your financial obligations

Child support, which is governed by the Divorce Act (Canada) and Family Law Act (Alberta), and as prescribed by the Federal Child Support Guidelines (“FCSG”), is the right of the child, and following separation both parents have a financial obligation to support the child. Child support can be broken down into two types:

  1. Section 3 child support, otherwise known as base or table support; and
  2. Section 7 child support, otherwise known as special extraordinary expenses.

The purpose of section 3 child support is to cover the basic needs of the child, including, but not limited to, food, clothing and shelter, whereas the purpose of section 7 child support is to cover special or extraordinary expenses. While the FCSG has enumerated section 7 expenses to include child care expenses, medical and dental insurance premiums, uninsured health-related expenses, extraordinary expenses for primary and secondary school education, expenses for post-secondary education, and extraordinary expenses for extracurricular activities, it is important to note that this list is not exhaustive.

As per the FCSG, child support is based on the parties’ gross annual incomes (also known as a party’s Line 150 Income), the number of children, and the parenting arrangement (e.g. shared or primary parenting). This information is then used to calculate the monthly amount of section 3 child support owed by either party, as well as the parties’ proportionate shares owed for incurred section 7 expenses.  For example, if Parent A earns $100,000.00 annually, and Parent B earns $50,000.00 annually, and the parties have two children together, child support would be calculated as follows (which is dependent on whether the parties have shared or primary parenting):

Shared Parenting Parent A Parent B
Monthly Section 3 Child Support Owed $1,458.00 $723.00
Proportionate Share of Section 7 Expenses Owed 67% 33%
Primary Parenting Parent A Parent B (Primary Parent)
Monthly Section 3 Child Support Owed $1,458.00 $0.00
Proportionate Share of Section 7 Expenses Owed 67% 33%
Primary Parenting Parent A (Primary Parent) Parent B
Monthly Section 3 Child Support Owed $0.00 $723.00
Proportionate Share of Section 7 Expenses Owed 67% 33%

While a party’s annual income can often be anticipated, the reality is that annual incomes often fluctuate, which in turn requires that child support be adjusted to reflect the same.  Unless there is a material change, such as loss of employment or a promotion with an accompanying pay raise, child support is often adjusted annually following the exchange of filed Income Tax Returns, as both parties have an obligation to disclose this information.  Parties will typically exchange Income Tax Returns, Notices of Assessment and/or Reassessment on or before June 1 of each year. If a party is self-employed, the starting point for their respective income is Line 150, plus any “add-backs” as described in sections 18 and 19 of the FCSG.

Following this exchange, if there is a change to the annual gross income of either party, a child support adjustment will be made to better reflect the parties’ current incomes. In the event that an adjustment is required, it must then be determined as to whether this adjustment needs to be applied retroactively to January 1 of the calendar year, or if the intent is to apply the adjustment prospectively.

It should also be noted that there are currently proposed amendments to both the Divorce Act (Canada) and the FCSG.  If these amendments are passed and become law, it will create legislative authority for the administrative establishment of child support, improve the child support recalculation scheme and streamline the interjurisdictional process for establishing and varying child support.

If you have questions or would like to discuss child support adjustments in greater detail, please contact Wells Family Law and a member of our team will be happy to assist you.