Recent Developments in Retroactive Child Support

July 20, 2021

The recent decisions in Michel v Graydon, 2020 SCC 24 and Colucci v Colucci, 2021 SCC 24 have changed how the courts address applications for retroactive child support and the rescission of child support arrears.

The new approach to retroactive child support intertwines the principles of leading cases to create a simplified framework. The framework is applicable to both retroactive increases and decreases in child support.

The Supreme Court of Canada has now clarified that a parent cannot bring an original application for retroactive support under the Divorce Act if the child was independent and over the age of 19 at the time the application was made. However, a parent may bring an application to vary support for an adult child under the Divorce Act, as long as the adult child remains financially dependent. Either an original application for support of an adult child or an application to vary an existing child support order, can be made under the Parenting and Support Act.

The fundamental principle remains that child support is the right of the child. The objective of retroactive child support is to balance the child’s interest in receiving fair support with the parents’ interests in flexibility and certainty over child support payments.

The payor parent has an obligation to provide the recipient parent with their updated financial information on an ongoing basis. This is an important factor in retroactive child support given the informational disadvantage of the recipient and the need for parents to pay the appropriate amount of child support.

These considerations resulted in the following framework, which is applicable to retroactive variations of child support under the Divorce Act. It is likely that the Nova Scotia Supreme Court will adopt the same approach for applications under the Parenting and Support Act.

  1. Past Change in Circumstances.
  • An applicant must show a past change in circumstances that would have been likely to result in different child support terms, if known at the time of the original order or agreement.
  • This is usually a change in the payor’s income.
  • The change in circumstances cannot be temporary, it must be long lasting and in the case of a decrease, the change cannot be voluntary.
  • The change could not be foreseen or was not in contemplation at the time of the initial original order.
  • If a payor parent fails to disclose their income, the court is permitted to impute their income and draw inferences against them.
  • If a payor’s income was previously imputed by the courts, a payor cannot claim that their imputed income is a change in circumstances.
  1. If the applicant proves a past change in circumstances, there is a presumption that child support should be retroactively calculated from the date that notice was first given.
  • Notice may be formal, e.g. a court application to vary child support was filed and served, or informal, e.g. the applicant informed the other parent that the amount of child support being paid was inappropriate.
  • Generally, the retroactive date can be up to three years prior to the date on which formal notice was given.
  1. If it is unfair to use the presumed retroactive date, the court may choose to apply a different retroactive date. When determining the appropriate retroactive date, the four B.S. factors from D.B.S. v S.R.G., 2006 SCC 37 are considered. They include:

1. Whether the applicant has a good reason for the delay in giving notice.

    • An applicant is expected to make an application to retroactively vary child support in a timely manner. If they knew of the change in circumstances and chose not to pursue a variation, they will not be found to have a reasonable excuse for their delay.
    • Examples of reasonable excuses include: the applicant lacked financial or emotional means to bring an application; the applicant lacked information regarding the payor’s income or was unable to contact the payor; the applicant was afraid of a counter-application for custody; the applicant was afraid to disrupt a fragile parent-child relationship; the child or parent was ill or disabled; or there were ongoing settlement negotiations.
    • Whether the applicant pursued the enforcement of arrears is irrelevant.

2. Conduct of the payor parent.

    • If the payor has engaged in blameworthy conduct, this supports adjusting the retroactive date accordingly. Blameworthy conduct is defined broadly as anything that puts the payor’s own interests over the child’s right to receive appropriate support.
    • The payor parent’s efforts to provide full and ongoing disclosure is an important consideration under this factor.
    • A payor’s willingness to make voluntary payments or provide support in indirect ways is also considered.

3. Past and present circumstances of the child.

    • This factor is concerned with the child’s standard of living currently and during the period when child support should have been adjusted.
    • In the case of an increase, a child suffering hardship supports extending the retroactive date to the date of the payor’s increase in income.
    • In the case of a decrease, a child suffering hardship supports a closer retroactive date.

4. Hardship to the payor parent.

    • Hardship to the payor is considered for fairness but is not a deciding factor.
    • A payor must show proof of hardship. Making assertions is not enough. The payor’s income, earning capacity and assets are relevant.
    • The payor’s hardship is weighed against hardship to the child and receiving parent.
    • The payor’s hardship is less of a concern if it was caused by their previous failure to disclose information.
    • The courts will also consider whether a retroactive award would result in a back payment. It is inappropriate to make the recipient parent responsible for unexpected repayments.
  1. Quantification of retroactive award.
  • If the court determines that a retroactive adjustment is appropriate and a retroactive date is determined, the next step is to calculate the amount of the award.
  • The Child Support Guidelines are used to calculate this amount.
  • This requires the payor parent to make full disclosure of their income for the retroactive period.
  • If the payor fails to provide the necessary income information, the court is permitted to impute their income and draw inferences against them.
  • A payor must also provide current financial information if they are seeking a payment plan or temporary suspension of payments.

A payor parent who has accumulated child support debt that they cannot repay, may apply for a rescission of arrears. This would occur when the child support order and arrears reflect the payor’s income, but the payor has no ability to pay the arrears. The only relevant factors are the payor’s current and future financial circumstances. A present inability to pay does not necessarily mean the payor will be unable to pay in the future.

Arrears are only rescinded in exceptional circumstances. Courts will first consider any available options such as payment plans or temporary suspension of payments. For an applicant to have child support arrears rescinded, they must show that they cannot and will not ever be able to pay the amount of their arrears. One example of when this may occur is when the payor has suffered a catastrophic injury.

In summary, the law on retroactive child support and arrears has seen recent developments that parents should be aware of. Meeting ongoing disclosure obligations is the best way for parents to avoid issues with retroactive child support.

For more information on this topic, contact us to speak with one of our family law specialists.

 

*This article was written with contributions from Cox & Palmer’s Dominique Perinchief, Associate and Haneen Al-Noman, Summer Student.

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