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Adjustments and Forgiveness of Child Support in Canada

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Published by:

Omar Glenn

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Reviewed by:

Alistair Vigier

Last Modified: 2024-01-15

Child support is one of the consequences of divorce or separation in Canada. When the court issues the support order, or there’s a filed agreement to pay it, the paying parent typically cannot evade the responsibility.  

Suppose you miss three or more payments or fail to pay over $3,000 in child support. In those cases, you are in arrears and can face serious consequences. These include cancelling your passport or professional license, penalties, and imprisonment. If you work for the federal government, they may garnish your wages.

However, you could petition the court to adjust child support payments or forgive arrears in some circumstances. A recent Supreme Court decision established a precedent for one such application in its interpretation of Section 17 of the Divorce Act (Act).

Each province will have regulations for addressing applications for child support variations and arrears forgiveness. However, the fundamental principles remain the same. This article will discuss the framework for these applications for the payor and recipient of child support.

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Adjustments

Parents should disclose any changes in their income. Failing to provide accurate income disclosure can be detrimental, particularly if you want to reduce your payments. On the other hand, failure to reveal an income increase may lead to a significant award to the payee.

The court calculates the appropriate child support according to the Federal Child Support Guidelines (Guidelines) based on the paying parent’s income. However, when the payor’s income fluctuates, so may the child support amount. Either parent may apply to the court for a retroactive modification in child support.

When the court receives such a request, it must consider the following critical factors:

  • The child’s right to financial support matching the payor’s income
  • Predictability and certainty of payments
  • Flexibility to ensure fairness  based on income changes

Adjustments to child support must be due to material changes, meaning something substantial and continuing. These often involve a severe illness, losing a job, overwhelming debt, and parenting time modifications.  

Retroactive reduction

Let’s say you had a high-paying job as a nurse when you divorced and started paying child support. However, you decided to pursue a medical degree and took out a loan to finance it. That meant giving up your job while in residency. In the meantime, you must start paying off your loan. You can do a medical professional refinance to get lower interest rates, but you still struggle to make ends meet.  

These circumstances may qualify you for a retroactive reduction because of a material change in your income. In that case, you must give the payee parent effective notice of your income change. The notice establishes a presumptive date of retroactivity because approval for a court application can take time. The presumptive date may be up to 36 months before you file a formal application.

If you don’t give effective notice, the adjustment will be retroactive to the date of the court application. You must present documentary evidence of your involuntary and continuing income decrease to the court.   

However, the court may adjust the presumptive date of retroactivity at its discretion based on fairness. The primary factors for the departure include the following established in DBS v SRG, 2006 SCC 37:

  • Reasonable delay in seeking an adjustment
  • Payor’s good faith conduct
  • Child’s circumstances
  • Undue hardship to the payor if the court does not grant a reduction
  • Quantification of decrease

Suppose the court approves the application for a reduction. It will compute the modified child support amount for each year from the date of retroactivity based on the Guidelines.

Retroactive addition

The adjustment can go either way. When the payor’s income increases significantly, the payee may apply for a corresponding rise in the child support payments. The court may also retroactively award the additional funds based primarily on the same framework of a reduction.

The difference is the burden of proof on the payee, who must establish a material increase in the payor’s income. The payee can request the payor to provide financial documents to that end. However, failure of the payor to provide these documents may result in getting in trouble with the court. It can strike pleadings, impute income, and award costs to the payee.

Alistair Vigier, the CEO of Clearway says “The payee only needs to bring up the subject of an increase in child support payments to the payor. The conversation serves as effective notice and establishes the presumptive date of retroactivity.”

Forgiveness of Arrears

A payor parent may also request the court to forgive child support arrears under the Act based on a permanent inability to pay. That means that under no circumstances can the payor ever pay the arrears.  

The SCC case established that an applicant for arrears forgiveness must provide convincing evidence of this inability to be successful. These include the persistent lack of assets, pensions, job prospects, inheritances and bequests, and other potential sources of income.

However, approval of forgiveness applications for child support arrears is far more the exception than the rule. You should only consider it if you have no other option. You should also note that forgiveness of arrears does not mean you are exempt from current and future child support payments.

Takeaways

Child support payments are not there to punish the paying parent. It is a child’s legal right and the parents’ responsibility.

However, circumstances can change and affect the ability of the payor to fulfill their obligations. Canadian courts may grant applications for modification of child support payments to be fair to all parties. Occasionally, they may even forgive arrears.

Suppose you fall into financial hardship and cannot fully pay for your child’s support. Do not ignore your obligations. Talk to your payee as soon as possible and work together to resolve the issue in good faith.

Author: Jack Smith of Ason Law, Canadian Lawyer

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