Payor Parents Must Disclose Income Increases

The Supreme Court of Canada has ruled that divorced or separated parents who pay child support must disclose their income changes to their ex-spouses. As income and custody circumstances change, so do parents' legal obligations to their children. Ensuring that support amounts are appropriate is an ongoing responsibility and failure to do so may result in retroactive awards.

To read the full Decision click here.

The Decision is the result of a series of four appeals to the Supreme Court of Canada that challenged orders to pay retroactive awards. After hearing the cases of four Alberta fathers who were asked to make such payments, Canada's highest court ordered two to pay and absolved the other two.

Of the two fathers ordered to pay, one father's payments although already increased were deemed to fall "substantially below those set out in the Federal Child Support Guidelines" and the other father who had a "substantial income...did not comply with the mother's...request that he contribute to their daughter's college expenses."

Of the two cases dismissed, the first decision rested on the similar household incomes of both parents at the time of appeal and the second determined that the father's income was too meager to support the award. He had “honoured his support obligations and that he had incurred substantial expenses in exercising his access rights."

The Court stated that "The payor parent's interest in certainty must be balanced with the need for fairness to the child and for flexibility."

The Decisions took into account changes in payor-parent income, the notification of the recipient parent to seek increased payments, reasons for delays in making such notification, and the blameworthiness of the payor parent. The particularity of each case means that in the future "a court should strive for a holistic view of the matter and decide each case on the basis of its particular facts."

This means that there are no fixed rules about how such decisions will be made. Recipient parents who believe they are entitled to increased payments are required to broach the topic with the payor parent. The Court made it clear that such effective notice does not require legal action on the part of the recipient parent, just notification.

Regardless of recipient parent’s broaching of the topic of increased payments, payor parents must disclose income changes in order to fulfill their legal obligations to their children. Otherwise, they may find themselves obligated to make retroactive child support payments. The Decision states that when such payments are ordered, as a general rule, it should be retroactive to the date of the recipient parent's effective notice that changes to child support should be made, but to no more than three years. If the payor parent's conduct is deemed blameworthy, however, "the date when the circumstances changed materially will be the presumptive start date of the award."

Revised March 2015