An Ontario court recently set out the principles underlying a retroactive discharge of child support arrears.
By way of a settlement agreement in 2010, the father was ordered to pay spousal support in the amount of $450 per month, and also child support in the amount of $1,457 per month. Both the child support and spousal support were based on the father’s income of $104,424 and the mother’s annual income at the time of $40,457.
The order also provided that the parties annually review together the payment of any of their children’s special and extraordinary expenses (example: extracurricular activities, medical expenses, post-secondary educational costs, etc.). The costs of these expenses would be shared between the parents in proportion to their respective incomes.
However, in 2015, the father lost his job and he was not able to find similar work. As a result, his income at his new employment was substantially less, settling around $45,000. Since 2015, given the change in his employment, he had been having problems making the support payments. Accordingly, the outstanding arrears began to accrue and, at the time of trial, the father owed $47,264 in spousal support and $24,911 in child support.
The father asked the court to set aside the arrears and argued that he should not be required to pay any additional support on the basis of his current financial circumstances. He took the position that his change in income constituted a material change. Additionally, he argued that both of their children from the marriage were now adults and the mother was in a better financial position than he was. He also sought to have spousal support set aside for the period where he was earning the same or less than the mother.
In response, the mother wanted the court to maintain the original agreement and obtain the arrears. In addition, she asked that the father pay his share of their elder daughter’s expenses for university, which stood at just over $40,000. The mother acknowledged that their elder daughter was an adult and was no longer a “dependent child”. However, she sought ongoing support for their youngest daughter, who had a developmental disability and would dependent on her parents for the rest of her life.
The court began by explaining that it has the power to retroactively discharge or rescind child support arrears under s. 37(2.1) of the Family Law Act, which reads:
Powers of court: child support
(2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,
(a) discharge, vary or suspend a term of the order, prospectively or retroactively;
(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and
(c) make any other order for the support of a child that the court could make on an application under section 33.
The power can be exercised in a case only if there has been a change in circumstances within the meaning of the Child Support Guidelines. The court stated that in the case where the amount of child support was determined in accordance with the table, any change in circumstances that would result in a different order for child support constitutes a change in circumstances that gives rise to a variation.
However, the court found that the accumulation of arrears without evidence of a past inability to pay did not constitute a change in circumstances. Additionally, a present inability to pay did not by itself justify a change order. The court explained:
“Such an order should only be granted if the payor can also prove a future (emphasis added) inability to pay.”
The court stated that, while there is no fixed formula a court must follow when exercising its discretion in such circumstances, the following factors should guide a court in determining whether to grant retroactive relief, the date of retroactivity, and the quantum of relief:
1. The nature of the obligation to support, whether contractual, statutory or judicial;
2. The ongoing needs of the support recipient and the child;
3. Whether there is a reasonable excuse for the payor’s delay in applying for relief;
4. The ongoing financial capacity of the payor and, in particular, his ability to make payments towards the outstanding arrears;
5. The conduct of the payor, including whether the payor has made any voluntary payments on account of arrears, whether he has cooperated with the support enforcement authorities, and whether he has complied with obligations and requests for financial disclosure from the support recipient;
6. Delay on the part of the support recipient, even a long delay, in enforcing the child support obligation does not, in and of itself, constitute a waiver of the right to claim arrears; and
7. Any hardship that may be occasioned by a retroactive order reducing arrears or rescinding arrears, or by an order requiring the payment of substantial arrears.
In light of these principles, the court refused to vary the child support arrears. It found that the support payments were proper given the father’s ongoing obligation to assist with financing his eldest daughter’s expenses while in university. However, it did not add the extra amounts sought by the mother.
The court did agree to deduct the spousal support for the period while the father was earning less than the mother, which left spousal support arrears in the approximate amount of $32,800. Additionally, the court ordered that the father no longer be required to pay spousal support.
As a result, the total arrears were fixed at $57,711. The court ordered that the arrears be paid at a rate of $250 per month.
With regards to child support, the court ordered the father to pay ongoing child support for the youngest daughter in the amount of $350 per month.
The court concluded:
“I recognize that [the father] is in a tight financial situation. However, the materials reflect various discretionary expenses that can be reduced with a view to satisfying his arrears and ongoing support obligations. [The father] will still be required to provide an update of his income to [the mother] on an annual basis. If his salary changes substantially, [the mother] can seek to increase the amount of the child support.”
At Feigenbaum Law, our goal is to help you move forward following the breakdown of a relationship while retaining as much financial stability as possible and ensuring your children are provided for. Mark Feigenbaum is able to counsel his clients on all potential risks that may result from a family law dispute, not just those related strictly to the breakdown of a marriage. Contact Mark online or call him at (416) 777-8433 or toll-free at (877) 275-4792 to book a consultation.