Category: Income for Support Purposes

During the course of a separation, sometimes one or both spouses’ changing financial circumstances cause them to make withdrawals from their RRSPs. Do these RRSP withdrawals constitute income for support purposes? Child Support The Ontario Court of Appeal held in Fraser v Fraser, 2013 ONCA 715 (ONCA) that RRSP withdrawals are “presumptively part of a spouse’s income for child support purposes.” Furthermore, section 16 of the Child Support Guidelines, outlines that: Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III. RRSP withdrawals are found under the heading “total income” on a T1 General form. However, section 17(1) of the Child Support Guidelines allows the payor spouse to make the argument that their “total income” on their Income Tax Return should not be their income for support purposes.  Section 17(1) provides that, if the payor spouse can show that the determination of their annual income under section 16 of the Child Support Guidelines would not be the fairest determination of their annual income, a court may: "Have...

Child Support The Ontario Court of Appeal held in Fraser v Fraser, 2013 ONCA 715 (ONCA) that RRSP withdrawals are “presumptively part of a spouse’s income for child support purposes.” Furthermore, section 16 of the Child Support Guidelines outlines that: Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III. RRSP withdrawals are found under the heading “total income” on a T1 General form. However, section 17(1) of the Child Support Guidelines allows the payor spouse to make the argument that their “total income” on their Income Tax Return should not be their income for support purposes.  Section 17(1) provides that, if the payor spouse can show that the determination of their annual income under section 16 of the Child Support Guidelines would not be the fairest determination of their annual income, a court may: "Have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income, or receipt of...

When calculating a party’s child or spousal support obligation in family law, the payor's obligation is based on his or her income as indicated on Line 150 of his/her Income Tax Return/Notice of Assessment (subject to certain adjustments which are specifically stipulated in the Federal Child Support Guidelines). However, there are cases where a payor's Line 150 income does not correctly convey how much money s/he is actually earning in a given year. Common examples of this surface when an individual owns a business or is self-employed. In these cases, recipients of support often argue that the payor is, in fact, earning more income than is reflected on Line 150 of their Income Tax Return and Notice of Assessment. It is also interesting to note that there are cases where a party’s Line 150 income is overstated. In the case of Stober v. Stober, the Court notes that child and spousal support obligations are based on the income available to the payor and not on his/her Line 150 income without regard to any other evidence. Clearly, the evidence available to the parties and to a Court is crucial to any such an argument. In Stober, much to the wife’s dismay, Justice Weatherill decreased the husband’s income from $1,000,000 (stated as...

When courts are faced with the task of assessing whether one of the parties to a matrimonial matter are entitled to interim support, two components will be analyzed: whether the applicant is in need of the support and whether the respondent has the ability to pay. In the case of Knowles v. Lindstrom, 2015 ONSC 1408 Justice Penny outlines that: "[t]he parties agree that 'need' in cases such as this relates not only to basic shelter and necessities but to a lifestyle that is commensurate with the lifestyle enjoyed during the relationship, provided the other spouse has the ability to pay. Thus, the accustomed standard of living during a relationship is the appropriate content in which a payee spouse's need should be assessed." Justice Penny further explains that an applicant who presented a modest expense budget in his/her Financial Statement should not be penalized for failing to spend beyond their means or for failing to advance, as their monthly budget, lavish expenses they are not actually incurring. In that regard, Justice Penny states: "The applicant has presented a modest expense budget of approximately $76,000. As noted above, I do not think the applicant should be penalized for failing to spend beyond...