As a payor of child support, it can sometimes be difficult to know when you should adjust your child support payments to reflect an increase in income. This can be further complicated when there are existing agreements or orders that provide for annual adjustments but you have experienced a change in circumstance mid-year. To protect your interests when an adjustment to child support may be warranted, it is vitally important to advise the other parent immediately of the change in circumstance, both in the case of increases or decreases in income. It is also crucial to provide any supporting documentation.
Supreme Court of Canada (SCC) case law indicates that there is a positive obligation on the payor to disclose any increase in income as soon as they become aware of the change because child support is the right of the child. Failing to disclose what may seem to be only a modest increase in income can attract a retroactive child support obligation, as was the case in Pinter v Pinter, a decision out of the Alberta Court of Appeal.
In Colucci v Colucci, the SCC discussed how far back a retroactive award should go and whether time limits should apply. In Colucci, much of the SCC’s consideration centered on the recipient: when and how they put the payor on notice that an increase in support was warranted (which the Court termed the date of “effective notice”). However, the SCC stated that the mere existence of the Divorce Act in combination with their ruling in DBS v SRG had effectually put every payor of child support on notice of their obligations to pay in accordance with their income. Therefore, where a payor’s income has increased, if the payor does not disclose the increase to the recipient and adjust payments accordingly, the payor could be at risk of an arrears award if support is not increased, even if several years have passed since the change in income.
Some people ask, “What about certainty?” Although certainty (i.e., knowing how much you owe) is an important principle and a live consideration in Colucci, the SCC cautioned payors that certainty will not override the interest of the child(ren), particularly where the change in income was not disclosed. Accordingly, a Court can go back several years to make right an underpayment of child support. In other words, a payor should not count on a Court being overly receptive to a certainty argument in response to a retroactive child support application where the increase was not disclosed.
It is important to keep in mind that an immediate adjustment to child support may not make sense in all situations, particularly with respect to an income that fluctuates. For example, an individual earning income primarily through commissions that fluctuate month-to-month should not be expected to adjust support each month based on the prior month’s earnings. If you are unsure of what amount of child support you should be paying due to an income that varies month to month, one of our lawyers can help you navigate the best way forward so that you don’t find yourself in a situation where you are owing significant arrears.
On the other hand, you may have a court order or an agreement that states when financial disclosure is due each year and when an increase, if any, becomes payable. If you have such an order or agreement and are unsure how to address changes of income in the context of a child support obligation, it’s best to seek advice from a lawyer. The lawyers at SVR Family Law can help you navigate and ensure you are in compliance with your legal obligations.
A word of caution to the recipient of child support: While it may seem that a failure by the payor to disclose financials will automatically result in an order for retroactive child support back to the date of the increase, this is not necessarily so. If you believe you are owed child support, make sure to contact a lawyer right away to preserve your rights to pursue a retroactive award, as a failure to act in a timely manner may prejudice a recipient’s ability to seek an award from the date the payor’s income changed.
For parents in a shared parenting arrangement, both parties are typically considered payors and therefore the payor obligations discussed above may apply to both parties irrespective of how money changes hands each month.
If your income has increased and you are curious how it will affect your payments, check out our child support calculator.