Key Issues: Your Income

Division

divorceDivision of income on relationship breakdown is determined by two obligations that flow from that relationship - Spousal and Child Support. The difference in your income and the length of time you have been together will have a significant impact on how much is to be paid and for how long.

 

Child Support

The amount of Child Support is determined by the Child Support Guidelines.  Once you know the parenting arrangement and what the paying parent earns an established “Table” will determine what is to be paid.  In addition there will be a calculation of how you will share any extraordinary expenses of the children. Coverage for the children on any available health benefits will be part of the support obligation.

 

Spousal Support

There is no established “Table” for Spousal Support.  However there is the Spousal Support Advisory Guidelines.  These Guidelines were released by the Federal Department of Justice to assist lawyers and the courts in determining a general range in which a reasonable amount of spousal support could fall. In the determination of Spousal Support the Family Law Act identifies 19 circumstances that are to be considered and there are 3 factors and 4 Objectives under the Divorce Act.  All of this goes into the analysis of whether Spousal Support should be payable and if so, how much and for how long.

 

 

Determining Income

Determining income can be simple if you or your spouse are employed by one employer, on a fixed salary and seldom work overtime.  However many families have other sources of income.  There may be rental properties, dividend payments, earnings on investments or a secondary job from which the income may or may not be reported.  There may be a change in income that requires explanation.  One of you may be self-employed or derive your income from a corporation you either own or control. The income you or your spouse declares to the Canada Revenue Agency is not always an accurate picture of what a court would conclude your income to be after analyzing your circumstances.

 

What Else is There?

Numerous and diverse factors are often at play in determining income and how much of it you, your children or your spouse may be entitled to.   Just a few of those factors can be seen through a short list:


Money is tight on separation so you cash in some RRSPs to make ends meet. The Canada Revenue Agency calls that taxable income. Is it considered part of your income for support purposes?

Who pays the family debt and is that a factor considered when determining support?

One or more of your children are from an earlier relationship. Does your current spouse have an obligation to pay child support to you for them?

You are not married. Have you and your partner been together long enough for you to either pay or claim for support?

You already pay support for children from an earlier relationship. Is this taken into account when fixing the amount of your support for your children from this relationship?

You don’t believe you should have to continue to work long overtime hours now that the relationship has ended. Can you cut back or stop?

The children are with you and your spouse on almost an equal basis. Are you still entitled to receive or do you still have to pay child support?

Either you or your spouse is filing for bankruptcy. What effect is that going to have?

You have always devoted a reasonable portion of your income to investments for your future financial security. Will you be able to continue to do so?

One or more of your children are leaving home and attending college or university. Do you still have to pay or are you still entitled to receive child support? Is your child obligated to help out financially?


This list is by no means comprehensive.  It just gives a brief illustration of those questions and issues that often arise when dealing with your income and your support obligation or entitlement.

 

Full and complete disclosure of both of your financial circumstances is absolutely critical.  Knowing what has to be produced in order to have or give an accurate financial picture is something on which you will need professional advice. Being able to understand and analyze the financial information that is provided is critical in determining your entitlement or your obligation.  Again, you will need sound professional advice.

  • Your Income:
    Why Consult David J. Sherman?

  • For more than 30 years David has been dealing with income and support issues on behalf of clients who have had family incomes ranging from less than $50,000.00 a year to more than $700,000.00 a year.  David has worked with circumstances that cover almost every possible parenting arrangement. He has both made claims and defended against claims that income should be determined to be much higher than what is alleged. 

     

    David knows when it is necessary to retain a financial expert to assist and perhaps just as importantly, when it is not.  David brings a pragmatic perspective to resolving disputes so that wherever possible the cost of this process does not exceed the benefit to be obtained.  David understands that, once retained, his professional duty is to protect or secure your interests.