In Alberta, child support is typically calculated using the Federal Child Support Guidelines. However, simply using the federal guidelines may not be perfectly accurate. One factor to consider is non-wage income such as bonuses and severance payments. In these cases, the calculation of child support may be more complex and the standard guidelines alone may not be enough.
Do the Federal Child Support Guidelines Include Bonus Income?
When it comes to employment bonuses, should they be included in your income for Calgary child and/or spousal support purposes? The answer depends on whether or not you typically get a bonus each year and if that bonus amount is similar or comparable over the years. If so, your bonus will be included in calculations for support and small fluctuations in annual bonuses won’t be a basis for adjusting your income year to year.
Determining Annual Income
Usually the amount of child support will be determined by the current income of the payor and the number of children. If the Court feels that using current income would not be fair, however, they may look at the payor’s pattern of income or changes in income over the last 3 years. As a result, for the purposes of support payments the base income usually does not accurately reflect the income available for support.
Severance Package and the Federal Child Support Guidelines
Typically, the amount of support payable according to the Federal Child Support Guidelines is based on the parties income from the previous year. This is because it is the easiest way to determine and calculate income. When you lose your job, it can mean that there has been a shift in financial means. Most terminated employees receive severance payment from their employers, which also factors in to support obligations and can be treated as income for support purposes, and will be considered as such by the Courts. If a severance package was received, income for the purpose of child support may be determined by extrapolating a yearly income based on the amount of severance as a severance will normally be based on an income over a specific period of time. However, if new employment is not found by the end of the severance period it becomes necessary to either reduce child-support payments further or impute income.
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