Does the Income of both Parents Affect Child Support?
Child support is money paid by one party to another upon the breakdown of a relationship in order to ensure the financial needs of a child are met. The amount of child support to be paid is governed by the Federal Child Support Guidelines which uses a formula to determine the monthly amount due by the payor to the payee. While the Guidelines are clear cut, there are many factors that can impact the amount of support paid. We recommend speaking with one of our Calgary child support lawyers to ensure your children are receiving their entitled amount of support.
How Does Income Affect the Amount of Child Support?
In Alberta, the amount of child support payable is determined by examining the gross annual income of both parties. Often times, this is as simple as reviewing the parties’ most recent income tax return line 150 and inserting this number into a program that calculates the amount of child support that is payable from one party to the other.
However, our child support lawyers know that income isn’t always as clear cut as what is shown on your tax returns or pay stubs. Parties who are self-employed or own an interest in a corporation have the onus of providing all the necessary documentation to support their income. Another common factor that impacts income is income received from rental properties. A good child support lawyer will review all sources of income prior to calculating the amount of child support owed.
What If There is Shared Parenting?
In a shared parenting situation, a child support lawyer will again look at the income of both parties as well as the amount of time the child spends with each parent. In order to be considered shared parenting, the child must be in one’s care for at least 40% of the time over the course of the year.
When there is a shared parenting arrangement there is a little more flexibility for the parties to determine the amount of support. For example, if parties have similar incomes, they can opt-out of any base child support and each parent would simply pay for the child’s daily needs when in their care.
Another method is the set-off method. The set-off method involves each parent paying the other the amount that would be payable in the event the children were in the primary care of the other and there was no shared parenting. The obvious effect of that is that once the amounts are paid is that the lower-income earner ends up retaining the difference between the two amounts.
However, it is essential for the full amounts to actually be exchanged in the event the parents wish to maximize the government benefits to which they are entitled to government benefits/tax deductions to which they are entitled to the Canada Child Benefit or Amount for an Eligible Dependent.
Two Types of Child Support to Consider
There are two types of child support, base child support and extraordinary expenses. Base child support is paid in accordance with the Federal Child Support Guidelines and is determined by establishing the payor’s income and the number of children as described above.
Extraordinary expenses are those that fall under Section 7 of the Guidelines. They are as follows:
- child care expenses incurred for retraining or employment;
- health insurance premiums attributable to the children;
- health care costs that are not covered by insurance that exceed $100 per illness per year;
- extraordinary extracurricular activity expenses;
- extraordinary educational expenses; and
- post-secondary educational costs, having regard to the parties’ means and needs and the child’s ability to contribute.
If you need help determining the amount of support your child is entitled to, connect with us.