Under the Child Support Guidelines child support is typically determined in a straight-forward manner by looking at a Table that sets out the monthly amount to be paid in accordance with the number of children and the support payor’s annual income.  The Table amount is "presumptive" for incomes up to $150,000 and typically also applied for incomes much more than that.  The question payors and recipients both want to know is at what income level is support less than the Guidelines calculation likely to e ordered? 

Section 4 of the Guidelines gives the judge discretion to determine the amount of child support to be paid where a support payor earns an income in excess of $150,000 per year. This discretion to vary from the Table amount is exercised by the judge where the court considers the amount based on the Guidelines Table formula to be inappropriate.  But what exactly does “inappropriate” mean?  How much more than $150,000 per year is enough to give the court discretion to order an amount of monthly child support that is less than the Guidelines?   

The judge in the recent case of Ross v. Ross reviewed the law and stated that “inappropriate” should be interpreted broadly to mean “unsuitable,” rather than “inadequate.”  

In this case, the parties were married for 17 years and had two children, aged 17 and 14.  The father was the family’s “breadwinner” with the mother taking on more of the household and childcare responsibilities, while working part-time.  The court found the father’s income to be $306,000 per year.  Since his income was over the threshold of $150,000 the judge decided that this was a proper case in which to use its discretion to determine the amount of child support in an amount outside of the Guidelines.  The court asked the mother, as the primary caregiver, to provide a budget of childcare costs on a monthly basis.  The budget claimed $2,800 per month was necessary to cover the childcare expenses.  The court held that this was a generous amount, despite the fact that the amount under the Guidelines would be $4,000 a month.  The court ultimately decided that a monthly amount of $3,500 would be appropriate, a number in between the budgeted monthly amount and the Guideline amount.

Ross is a departure from the case law, which suggests that this type of discretionary decision is best left for incomes significantly greater than $150,000, such as $800,000 or more.  Here, rather than applying the Guideline amount where the support payor’s income was only slightly more than the threshold, the court looked to the family’s circumstances and children’s needs.  In doing so, the court considered a budget prepared by the children’s primary caregiver.  That's exactly the approach used in every case before the Guidelines became law in 1996 and changed the way child support in Canada was calculated.  Since then courts have generally accepted that budgets aren't necessarily reliable tools and only find them to be of assistance in really high income cases. They don't often break down expenses appropriately between the children and the adults (How much hot water or ketchup is for the kids or the caregiver?  If the caregiver uses a car to get to work and take the kids to hockey, how much car expense should be part of the child support?  Does that change if there are 2 cars, or the parent takes public transit to work?  Whose figures are in the budget anyway?)

Separate from the reliability of a budget, there's also the question of whether child support should vary in case to case amongst support payors of the same income dependent upon the record keeping skills of different caregivers.
And dealing with budgets take up more time and expense unless you're dealing with high income families.

All in all, Ross is an interesting case and only time will tell whether more judges will require budgets and be open to varying from the Guidelines and ordering less than the Table formula amount  in cases where the support payor earns $300,000.  Basically, the question is how far over $150,000 will a court go before ordering less than the Guideline Table formula would support.  If judges follow the approach in the Ross case, the threshold for the court to exercise its discretion may be a lot lower than many people thought.

By Serena Lein  Serena is an articling student at Ricketts, Harris.  She may be contacted at 416 364-6211 or by email at slein@rickettsharris.com.