Child Support Basics
Several years ago the government decided that too much money was being spent in Court to determine how much a parent should pay to support their kids. The solution was to establish a set of guidelines to remove any confusion and simplify the process. At the same time the government deemed that payments received by the spouse would not be added to their taxable income and the payment would not be a deduction to the payor. While many think this is unfair, it is the law of the land. Judges do not move away from the Federal Child Support Guidelines except under vary exceptional circumstances. Every province has an agency charged with making sure that child support is paid by the payor and received by the payee. In the event child support payments are not made this agency can cancel driving licenses, stop you getting a passport and even take any money owed to you by either federal or provincial governments and garnishee it and pay it to the person having care for your children. This includes your tax refund and your GST rebate.
Many people mistakenly believe that if they have shared custody of the children of the marriage, they do not have to pay child support. In almost every case, child support in shared or split custody cases is based on the difference in income between the parties.
You should also be aware that each party is entitled to have child support adjusted on an annual basis based on the previous year's income. This should be undertaken on a voluntary basis each year to avoid continual appearances in Court by the parties. In most cases child support is based on your line 150 income from your tax return. However, Judges may disallow many deductions from income if you have a private company and they feel you are using your company to reduce your child support. It is suggested that you discuss these situations with your legal advisor and/or accountant to insure you are not caught by a mistaken belief that all deductions can be used to reduce child support.
Calgary office: (403) 560-8550 • Edmonton Office: (780) 761-1277 • Red Deer Office: (403) 986-9626