Legally Speaking: Child support – what revenue is to be considered?

Legally Speaking: Child support – what revenue is to be considered?

Here is the first in a new series of legal columns by Quebec law firm  Joli-Cœur Lacasse Avocats.
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What revenue is to be considered?

By Me Sophia Claude and Me Albina Mulaomerovic

What revenue is to be considered?
For the purpose of establishing child support, the courts do not rely solely on a parents’ tax return. Indeed, the concept of income in family law is interpreted broadly and liberally, and the courts have considerable latitude to establish it. Rather than being limited only to the salary of the parents, a judge will consider the amounts paid by the employer of the parent for the purposes of pension, capital gains, bonuses and a multitude of other sources of income.

Although a parent who owns a business has great flexibility in his company’s accounting, the courts will not hesitate to impute a notional income to a parent for whom his company fails to pay dividends, thereby escaping the rules that fix child support. The judge will also consider the benefits that a company pays to a parent, such as travel and miscellaneous expenses, to establish the income of the parent. Travel expenses could include fuel, insurance and license plates. A judge may also impute income on default information, such as when a parent refuses to disclose his/her financial information. Non-taxable income received by a debtor, such as insurance payments, will be considered gross income for the purposes of calculating child support.

Since a parent has an obligation to generate revenue to meet the needs of his child, when he abandons his job for a lower-paying job, the courts will not hesitate to impute income to match what he had earned in the past or what he would be able to earn. When the reduction in revenue is made in order to improve one’s financial situation, such as going back to school, the parent must demonstrate that the project is realistic in terms of job prospects. The decision to take early retirement or retirement must be reasonable and the judge will consider, for example, the health and age of the parent. In addition, the financial impact of this change on the children will be taken into account.
Normally, the income considered for purposes of calculating child support is that of the current year, but sometimes it is not representative. In such a situation, the judge would consider the estimated income for the twelve months following the application for support.

A parent who wishes to establish the income of the other parent will have to be patient because it is a laborious process. However, the courts are now aware of the schemes of all kinds that some child support debtors, and even creditors, are making to avoid their obligations. Legal advice will be invaluable in order for the process to be effective, and in the best interests of those who would benefit from the support.

The masculine form is used merely to simplify the text. No discrimination is intended.

Me Sophia Claude and Me Albina Mulaomerovic Joli-Cœur Lacasse S.E.N.C.R.L.

Me Sophia Claude and Me Albina Mulaomerovic
Joli-Cœur Lacasse Avocats

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