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Retroactive Child Support

After the Child Support Guidelines were introduced there were numerous court decisions, many of which were conflicting,  dealing with the issue of the right to claim retroactive child support based on the payor's annual increase in income since the making of the last child support order. In effect, the retroactive support question comes down to this: can a support payor be ordered to pay what in retrospect should have been paid annually?

For example, if the support payor was ordered to pay support for two children in the year 2000 based on an income of $80,000.00 that would have produced a Guidelines payment of $1032.00. If the payor's income went up each year by $5,000.00 thereafter, was the payor under any obligation to increase the child support payable in accordance with the guidelines as his or her income went up? Can the payor be subsequently ordered to make those payments even though he was fully up to date with the payments ordered in 2000 ?

Awarding retroactive support considered by the Court

The court looks at a number of factors when determining whether a retroactive child support should be awarded, including:

a.     the child's age;

b.     delay in making the claim for retroactive support;

c.    whether there was blameworthy conduct on the part of either the recipient or payor;

d.     hardship to the child as a result of the non-payment;

e.     hardship to the payor if a payment is made.

The award should generally only be retroactive to the date when the recipient parent gave the payor parent effective notice of an intention to seek an increase.

When analyzing the factors above, one must keep in mind that the goal is to ensure that the children benefit from the support that should otherwise have been paid. Any incentives for the payor parent to be underpaying the support should be eliminated.

Unreasonable delay by the recipient in seeking an increase will militate against a retroactive award, while blameworthy conduct by the payor will have the opposite effect. It will work against the claimant if he or she had knowledge of the increase in the payor's income and took no steps to make a request for support adjustment. If the payor was under an obligation to provide his income tax returns or notices of assessment to the claimant under the Separation Agreement or court Order and failed to do so, he or she  will be in some difficulty in resisting a retroactive support award.

The court must always be attempting to balance the competing considerations of fairness to the children and the certainty that fairness to the payor often demands. If the payor fulfilled his court order or agreed upon support obligation each and every month and structured his budget and financial decisions accordingly, it is difficult to find fault. Some blameworthy conduct must be shown. This balance obviously involves a detailed examination of the facts in the particular case. As such, issues related to retroactive child support claims can be difficult and costly to resolve.

Increasingly, a  Support payor’s  failure to prove compliance with  annual income disclosure requirements has resulted in  rejection of the request to change the arrears.  The compliance with annual income disclosure requirements in the separation agreement or court order are the main focus of the blameworthy conduct analysis.  Providing evidence regarding requests for disclosure or provision of disclosure is often difficult, time consuming and costly.

In Ontario, Orders made after March 1, 2010  require parties to child support orders or agreements   to exchange support information annually . 

Effective March 1, 2010 all support orders in Ontario require annual updating of income.  Specifically all orders  contain the following clause:

For as long as child support is to be paid, the payor and recipient, if applicable must provide updated income disclosure to the other party each year, within 30 days of the anniversary of this order, in accordance with section 24.1 of the Child Support Guidelines.

Section 24.1 of the Child Support Guidelines specify that the tax return for the  most recent year, including any materials included in the return such as T4 slips and the Notice of Assessment or Reassessment from CRA  MUST be supplied to the other party each  year.   There is no doubt that payors who do not comply with this requirement will be liable for retroactive child support based on annual income increases.  Payor’s who experience an income reduction will  not likely receive a retroactive arrears reduction on a motion to change if the annual income disclosure has not been provided.

Apart from these new mandatory requirements in Ontario, most separation agreements contain clauses which require the parties to annually exchange tax information and special expense details.

The risk  of ignoring this annual disclosure requirement  can be financially devastating.

Payors  should register with the Support Information Exchange ( SIX )  in order to protect themselves.  The support information exchange  is designed to help parents organize, manage and comply with their child support responsibilities.  

Determining the total amount of retroactive child support

If the court finds that retroactive child support should be applied, the court must still ensure that the total amount of the award fits in the circumstances of each particular case. In some cases, when increases in income were significant, the amount of money involved is considerable.

Blind adherence to the amount set out in the Guidelines is not recommended. The award will be discretionary and the court can even consider the presence of undo hardship. Generally it will be easier to show that a retroactive support award causes undo hardship than to show that a going forward award does. There is a built in discretion under the Guidelines with respect to the total amount of retroactive child support in a number of enumerated circumstances under the Act. The effective date of notice does not always have to be chosen in determining the quantum. This application of fairness is the key consideration in the court's exercise of discretion with respect to the quantum of a retroactive award.

Basic principles relevant to retroactive support: The DBS Cases

In 2006, the debate on the question of retroactive support culminated in a decision of the Supreme Court of Canada that is known as The DBS Cases. The lengthy decision of the Supreme Court of Canada on this topic sets out basic principles that are relevant to retroactive child support awards which are as follows:

1.     The obligation for child support arises automatically upon birth;

2.     Child support is the right of the child;

3.     The right to support survives the breakdown of the child's parents marriage for child support should as much as possible provide children with the same standard of living that they enjoyed when their parents were together;

4.     The specific amounts of child support owed will vary based upon the income of the payor parent;

5.     The legal basis of child support is the parents' mutual obligation to support the children according to their needs;

6.     That obligation should be borne by their parents in proportion to their respective incomes and ability to pay;

The court identified the basic principles regarding the application of the Guidelines to these principles of child support:

1.     As income levels increase or decrease, parent's contribution to the needs of the children should increase or decrease just as they would if the family had remained together.

2.     Under the guideline system the support obligation should fluctuate with the payors income. If the payor does not increase the amount of his support when his income increases it is the child that loses.

3.     The need of the child is not necessarily the primary criteria under the guidelines.