How Child Support Is Calculated in Ontario: A Step-By-Step Guide

Navigating divorce, and more specifically, child support, is often a confusing and stressful process. At Nihang Law, we understand the emotional and financial pressures that child support can place on any individual, and we are committed to helping you navigate these complex legal processes. Here is a step-by-step guide on how child support is calculated in Ontario.

Step 1: Determine the Payor

In the event where child support is owed, there is a payor and a recipient. How child support is calculated in Ontario initially depends on identifying the payor, who is typically the parent who spends less than 40% of the parenting time (often calculated based on overnight stays with the child.

The payor, therefore, pays the child support to the recipient, or primary caregiver—the parent who spends more than 60% of the parenting time with the child. In cases where time with the child is more evenly split among both parents (i.e., both spend more than 40 percent of time with the child), please look at Step 4.

Step 2: Determining the Table Amount

The table amount is the base amount of child support that the payor must pay the recipient each month. Child support in Ontario, including how these amounts are calculated, is governed by either the Federal Child Support Guidelines under the Divorce Act (for married parents who are divorcing) or the Ontario Child Support Guidelines under the Family Law Act (for parents who were not married or who have not commenced divorce proceedings). Under these guidelines, the table amount is based on the following:

1. Number of children:

The more children whose custody is under that of the primary caregiver, the more child support will be owed by the payor each month, thereby affecting the payor’s table amount.

2. Payor’s Gross Annual Income:

For salaried employees, gross annual income will be taken from line 15000 of their tax returns. Salaried employees are required to show the last three years of tax returns, including all Notices of Assessments from the Canadian Revenue Agency (CRA), as well as all year-to-date income statements.

For self-employed payors, including business owners, courts typically review personal tax returns, financial statements, corporate tax returns, and other business records to determine an average income over the past three years. Additional scrutiny may be applied if personal expenses are paid through a business.

Meanwhile, for business owners, courts may take pre-tax income statements. Other income sources that are considered include severance, RRSP withdrawals, stock options, etc.

It is also important to be aware of imputed income. There are cases where the court deems that a parent is intentionally keeping themselves unemployed or underemployed, or is failing to provide proper financial disclosure. With that, imputed income may be assigned to a parent regardless of whether they are currently earning that amount or not. Courts will consider an individual’s employment history, age, education, lifestyle changes, and earning capacity.

For payors earning over $150,000 a year, courts typically apply the table amounts. However, Section 4 of the Federal Child Support Guidelines indicates that they may exercise discretion to depart from the table amount if strictly applying it would be inappropriate considering the actual needs of the child.

To look at the child support table, please click here.

Step 3: Section 7 Expenses

While the table amount provides a baseline child support to be owed to the recipient, there are often Section 7 or ‘Special’ expenses that are taken into consideration and are split proportionally by income.

These may include:

1. childcare due to illness
2. education
3. medical and dental insurance
4. private school tuition
5. post-secondary education
6. high-cost extracurriculars
7. and other out-of-pocket expenses

Section 7 expenses are typically shared by both parents proportionately to their respective incomes, after deducting any applicable tax benefits or credits. Section 7 expenses are split based on income. For example, if Parent A earns $70,000 per year and Parent B earns $30,000 per year, then the split of expenses is 70/30.

Step 4: Special Cases

Here is a list of special cases that may lead to a departure from the table amount:

Child is Over the Age of Majority:

In Ontario, the age of majority is 18. However, child support does not automatically end when the child reaches 18. Instead, it continues if the child remains financially dependent, such as attending post-secondary education full-time. Support obligations then typically shift towards specific expenses like tuition, rent, and other related living costs.

Step-Parents’ Child Support Obligations:

There are cases where step-parents will be required to pay child support. However, it is worth noting that their support obligations are secondary, which means that courts will prioritize the biological parents’ ability to pay before determining a step-parent’s obligations.

Shared or Split Parenting Time:

In cases where parenting time is split (child spends over 40% of time with each parent), a set-off method is used, and the equation is generally as follows:

1. Calculate both parents’ table amount
2. Higher table amount – lower table amount = what the higher-income parent pays

Retroactive Child Support:

In certain cases, courts may award retroactive child support. This occurs if they determined that a parent historically underpaid child support, failed to disclose accurate income, or delayed payments unreasonably. The court will consider factors such as the reason for the delay, past financial disclosure, the child’s current and past needs, and the financial circumstances of both parents.

Step 5: Undue Hardships

There are select cases where a parent may qualify for undue hardship to potentially reduce child support.

What is undue hardship? It is a provision outlined in Section 10 of the Federal Child Support Guidelines. It allows courts to deviate from standard child support obligations when paying the guideline amount would cause exceptional financial difficulties for a parent.

To claim undue hardship, the applicant must pass a two-part test:

1. Prove Undue Hardship

The parent must demonstrate exceptional circumstances causing financial strain. These circumstances typically include:

• • • Unusually high debts incurred for family support or essential needs relative to income.
    • Significant expenses related to parenting time, such as extensive travel.
    • Obligations to support other dependents or family members.

2. Compare Household Standards of Living:

Even after demonstrating financial difficulty, the parent must also show that their household standard of living is lower than that of the other parent’s household.

It is important to note that undue hardship is not a blanket provision automatically applied when finances are tight. The parent seeking relief must provide strong evidence to prove their financial hardship and lower standard of living. At the end of the day, the court still possesses the full discretion on whether or not to grant relief under this provision.

How Nihang Law Can Help

Legal advice and representation are crucial in understanding how child support is calculated in Ontario and how it may apply specifically to your case. At Nihang Law Professional Corporation, we understand the stressful and personal circumstances of child support. We handle all cases with utmost respect and discretion. If you have any other inquiries, don’t hesitate to contact any of our legal advisors.