Obtaining Reliable and Repeatable SSAG Calculations

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Appendix C: Excerpts from the Federal Child Support Guidelines

SOR/97-175 as amended by SOR/2007-59

AMOUNT OF CHILD SUPPORT

• Presumptive rule
  • 3. (1) Unless otherwise provided under these Guidelines, the amount of a child support order for children under the age of majority is
    1. the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the spouse against whom the order is sought; and
    2. the amount, if any, determined under section 7.
• Child the age of majority or over
  • (2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is
    1. the amount determined by applying these Guidelines as if the child were under the age of majority; or
    2. if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.
• Applicable table
  • (3) The applicable table is
    1. if the spouse against whom an order is sought resides in Canada,
       1. the table for the province in which that spouse ordinarily resides at the time the application for the child support order, or for a variation order in respect of a child support order, is made or the amount is to be recalculated under section 25.1 of the Act,
       2. where the court is satisfied that the province in which that spouse ordinarily resides has changed since the time described in subparagraph (i), the table for the province in which the spouse ordinarily resides at the time of determining the amount of support, or
       3. where the court is satisfied that, in the near future after determination of the amount of support, that spouse will ordinarily reside in a given province other than the province in which the spouse ordinarily resides at the time of that determination, the table for the given province; and
    2. if the spouse against whom an order is sought resides outside of Canada, or if the residence of that spouse is unknown, the table for the province where the other spouse ordinarily resides at the time the application for the child support order or for a variation order in respect of a child support order is made or the amount is to be recalculated under section 25.1 of the Act.
• Incomes over $150,000
  • 4. Where the income of the spouse against whom a child support order is sought is over $150,000, the amount of a child support order is
    1. the amount determined under section 3; or
    2. if the court considers that amount to be inappropriate,
       1. in respect of the first $150,000 of the spouse’s income, the amount set out in the applicable table for the number of children under the age of majority to whom the order relates;
       2. in respect of the balance of the spouse’s income, the amount that the court considers appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children; and
       3. the amount, if any, determined under section 7.
• Spouse in place of a parent
  • 5. Where the spouse against whom a child support order is sought stands in the place of a parent for a child, the amount of a child support order is, in respect of that spouse, such amount as the court considers appropriate, having regard to these Guidelines and any other parent’s legal duty to support the child.

INCOME

• Determination of annual income
  • 15. (1) Subject to subsection (2), a spouse’s annual income is determined by the court in accordance with sections 16 to 20.
• Agreement
  • (2) Where both spouses agree in writing on the annual income of a spouse, the court may consider that amount to be the spouse’s income for the purposes of these Guidelines if the court thinks that the amount is reasonable having regard to the income information provided under section 21.
• Calculation of annual income
  • 16. Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III. SOR/2000-337, s. 3.
• Pattern of income
  • 17. (1) If the court is of the opinion that the determination of a spouse’s annual income under section 16 would not be the fairest determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.
• Non-recurring losses
  • (2) Where a spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of the spouse’s annual income under section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of Schedule III, and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate.
• Shareholder, director or officer
  • 18. (1) Where a spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the spouse for the payment of child support, the court may consider the situations described in section 17 and determine the spouse’s annual income to include
    1. all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or
    2. an amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.
• Adjustment to corporation’s pre-tax income
  • (2) In determining the pre-tax income of a corporation for the purposes of subsection (1), all amounts paid by the corporation as salaries, wages or management fees, or other payments or benefits, to or on behalf of persons with whom the corporation does not deal at arm’s length must be added to the pre-tax income, unless the spouse establishes that the payments were reasonable in the circumstances.
• Imputing income
  • 19. (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:
    1. the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;
    2. the spouse is exempt from paying federal or provincial income tax;
    3. the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;
    4. it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines;
    5. the spouse’s property is not reasonably utilized to generate income;
    6. the spouse has failed to provide income information when under a legal obligation to do so;
    7. the spouse unreasonably deducts expenses from income;
    8. the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and
    9. the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.
• Reasonableness of expenses
  • (2) For the purpose of paragraph (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act.
• Non-resident
  • 20. (1) Subject to subsection (2), where a spouse is a non-resident of Canada, the spouse’s annual income is determined as though the spouse were a resident of Canada.
• Non-resident taxed at higher rates
  • (2) Where a spouse is a non-resident of Canada and resides in a country that has effective rates of income tax that are significantly higher than those applicable in the province in which the other spouse ordinarily resides, the spouse’s annual income is the amount that the court determines to be appropriate taking those rates into consideration.

SCHEDULE III (Section 16)

ADJUSTMENTS TO INCOME

• Employment expenses
  • 1. Where the spouse is an employee, the spouse’s applicable employment expenses described in the following provisions of the Income Tax Act are deducted:
    1. [Repealed, SOR/2000-337, s. 8]
    2. paragraph 8(1)(d) concerning expenses of teacher’s exchange fund contribution;
    3. paragraph 8(1)(e) concerning expenses of railway employees;
    4. paragraph 8(1)(f) concerning sales expenses;
    5. paragraph 8(1)(g) concerning transport employee’s expenses;
    6. paragraph 8(1)(h) concerning travel expenses;
    7. paragraph 8(1)(h.1) concerning motor vehicle travel expenses;
    8. paragraph 8(1)(i) concerning dues and other expenses of performing duties;
    9. paragraph 8(l)(j) concerning motor vehicle and aircraft costs;
    10. paragraph 8(1)(l.1) concerning Canada Pension Plan contributions and Employment Insurance Act premiums paid in respect of another employee who acts as an assistant or substitute for the spouse;
    11. paragraph 8(1)(n) concerning salary reimbursement;
    12. paragraph 8(1)(o) concerning forfeited amounts;
    13. paragraph 8(1)(p) concerning musical instrument costs; and
    14. paragraph 8(1)(q) concerning artists’ employment expenses.
• Child support
  • 2. Deduct any child support received that is included to determine total income in the T1 General form issued by the Canada Revenue Agency.
• Spousal support and universal child care benefit
  • 3. To calculate income for the purpose of determining an amount under an applicable table, deduct
    1. the spousal support received from the other spouse; and
    2. any universal child care benefit that is included to determine the spouse’s total income in the T1 General form issued by the Canada Revenue Agency.
• Special or extraordinary expenses
  • 3.1 To calculate income for the purpose of determining an amount under section 7 of these Guidelines, deduct the spousal support paid to the other spouse and, as applicable, make the following adjustment in respect of universal child care benefits:
    1. deduct benefits that are included to determine the spouse’s total income in the T1 General form issued by the Canada Revenue Agency and that are for a child for whom special or extraordinary expenses are not being requested; or
    2. include benefits that are not included to determine the spouse’s total income in the T1 General form issued by the Canada Revenue Agency and that are received by the spouse for a child for whom special or extraordinary expenses are being requested.
• Social assistance
  • 4. Deduct any amount of social assistance income that is not attributable to the spouse.
• Dividends from taxable Canadian corporations
  • 5. Replace the taxable amount of dividends from taxable Canadian corporations received by the spouse by the actual amount of those dividends received by the spouse.
• Capital gains and capital losses
  • 6. Replace the taxable capital gains realized in a year by the spouse by the actual amount of capital gains realized by the spouse in excess of the spouse’s actual capital losses in that year.
• Business investment losses
  • 7. Deduct the actual amount of business investment losses suffered by the spouse during the year.
• Carrying charges
  • 8. Deduct the spouse’s carrying charges and interest expenses that are paid by the spouse and that would be deductible under the Income Tax Act.
• Net self-employment income
  • 9. Where the spouse’s net self-employment income is determined by deducting an amount for salaries, benefits, wages or management fees, or other payments, paid to or on behalf of persons with whom the spouse does not deal at arm’s length, include that amount, unless the spouse establishes that the payments were necessary to earn the self-employment income and were reasonable in the circumstances.
• Additional amount
  • 10. Where the spouse reports income from self-employment that, in accordance with sections 34.1 and 34.2 of the Income Tax Act, includes an additional amount earned in a prior period, deduct the amount earned in the prior period, net of reserves.
• Capital cost allowance for property
  • 11. Include the spouse’s deduction for an allowable capital cost allowance with respect to real property.
• Partnership or sole proprietorship income
  • 12. Where the spouse earns income through a partnership or sole proprietorship, deduct any amount included in income that is properly required by the partnership or sole proprietorship for purposes of capitalization.
• Employee stock options with a Canadian-controlled private corporation
  • 13. (1) Where the spouse has received, as an employee benefit, options to purchase shares of a Canadian-controlled private corporation, or a publicly traded corporation that is subject to the same tax treatment with reference to stock options as a Canadian-controlled private corporation, and has exercised those options during the year, add the difference between the value of the shares at the time the options are exercised and the amount paid by the spouse for the shares, and any amount paid by the spouse to acquire the options to purchase the shares, to the income for the year in which the options are exercised.
• Disposal of shares
  • (2) If the spouse has disposed of the shares during a year, deduct from the income for that year the difference determined under subsection (1).
• Split amount
  • 14. If a spouse is deemed to have received a split amount under paragraph 60.(2)(b) of the Income Tax Act that is included in that spouse’s total income in the T1 General form issued by the Canada Revenue Agency, deduct that amount.

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