The Province has fallen on hard economic times, which has, for many, reduced cash flow for the purpose of child support. Payor parents who have lost their jobs may apply for a variation in child support, but financial hardship may continue for those fortunate enough to retain their current employment. A higher income earner may continue to prosper according to his or her Line 150 income (the number courts often rely upon in calculating support), but other obligations for that parent may hinder the ability to continue monthly support payments, in light of the current economic climate.
Section 10(1) of the Federal Child Support Guidelines (“Guidelines”) provides that a court may award an amount of child support that is different than the table amount if it finds that the spouse making the request would suffer undue hardship. Section 10(2) of the Guidelines sets out circumstances that may cause a spouse undue hardship:
- The spouse has unusually high debts associated with the family before separation;
- The spouse has unusually high debts associated with earning a living;
- The spouse has other children from other relationships to support;
- The spouse has a duty under a court order or written agreement to support any person; or
- The spouse has duty to support any person who is unable to obtain the necessaries of life due to illness or disability.
A relatively recent decision from the Alberta Court of Queen’s Bench called Auer v Auer, 2015 ABQB 67, presents the hurdles for parents claiming under hardship under section 10 of the Guidelines. The Court in Auer reminds us that undue hardship is a two stage process.
The first step is meeting the grounds for undue hardship set out above, which can reasonably be viewed as a smaller hurdle. It is the second and much higher hurdle, however, which is a cause for concern.
Even if a parent convinces a judge that he or she falls into one or more of the above undue hardship categories, there can be no reduction of child support unless that parent can prove his or her household standard of living is lower than that of the recipient parent (see section 10(3) of the Guidelines). That is accomplished though something called the “Standards of Living Test”, which is an income formula set out in the Guidelines. It is important to note that test often factors in the employment incomes of the parties’ new spouses, which can be intrusive.
The Court in Auer tells us that recognition of undue hardship is only the starting point. Once hardship is established, there must be a further court hearing to perform the Standards of Living Test. Before that second hearing, there must disclosure of all relevant financial information between the parties, and as mentioned above, that may include employment income information of the parties’ respective new spouses, which may cause serious privacy concerns for a new spouse not wanting to be involved in family litigation. The battlefield is riddled with casualties representing payor parents seeking relief under the undue hardship provisions of the Guidelines. That is because, at this time, the process is far too expensive and time consuming. Parents will rightly not want to spend thousands in legal fees to save a few thousand dollars in child support payments. One must remember that there remains serious risk that even after establishing undue hardship, the answer from a judge may still be “no reduction” after the Standards of Living Test is performed.
Your family lawyer should speak to you about other proactive and cost-effective options beyond section 10 of the Guidelines which may lessen your financial burden during a difficult financial period. That way, you may be in a position to save money on legal fees, and respect the financial privacy of your family.
Micah Chartrand is an Associate Lawyer at Soby Boyden Lenz LLP. He is experienced is all matters related to child support and family maintenance.