Vancouver high income spousal support and child support cases involving wealthy couples often involve special “income cap” rules. These special rules allow the court to depart from a strict guideline payment calculation for both spousal and child support. Our family lawyers are please to assist you in this complex area. Call us toll free at 1 877 602 9900 across North America.
For child support, the threshold where the court may begin to depart from the guidelines is as low as $150,000. In practice no reduction of the payment happens until the payor’s income is close to $1,000,000 per year. The budget for the child is very important in these cases as a check to see what amount of child support is needed.
For spousal support the threshold is over $350,000 and cases applying a lower than strict spousal support guideline payment have been somewhat divergent with some courts using a reduced payment when incomes are over $350,000 and other courts having the paying spouse pay the full high amount on a straight guideline calculation. Again the family budgets are looked at closely.
In the recent case of KRM v FBM both child support and spousal support payments were calculated using these special rules for incomes over $150,000 for children and over $350,000 for spousal support. Both payments of spousal support and child support were reduced to reflect a reduced payment that still met the realistic budgets of the recipient and their children.
[41] Section 4 of the Federal Child Support Guidelines provides for the following:
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
(a) the amount determined under section 3; or
(b) if the court considers that amount to be inappropriate,
(i) 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;
(ii) 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
(iii) the amount, if any, determined under section 7.
[42] The Supreme Court of Canada in Francis v. Baker, [1999] 3 S.C.R. 250 at para. 40, states the following:A proper construction of s. 4 requires that the objectives of predictability, consistency and efficiency on the one hand, be balanced with those of fairness, flexibility and recognition of the actual “condition, means, needs and other circumstances of the children” on the other. Furthermore, this balancing must take into account the ordinary meaning of the word “inappropriate”, as well as its use elsewhere in the statute. In my opinion, the plain language of s. 4 is consistent with such an interpretation. Accordingly, the word “inappropriate” in this section must be broadly defined to mean “unsuitable” rather than merely “inadequate”. Courts thus have the discretion to both increase and reduce the amount of child support prescribed by the strict application of the guidelines in cases where the paying parent has an annual income exceeding $150,000….
[43] The respondent, in his argument, has provided his projected income for 2012. In my view, based on the evidence before me, the appropriate amount to use for the determination of both child and spousal maintenance is the respondent’s line 150 income from his 2011 income tax return which is $895,898.
[44] Based on an income of $895,898 the child maintenance for three children pursuant to the Federal Child Support Guidelines is $14,513 per month. The claimant, in her financial statement, deposes that the direct expenses related to the children are $4,420 per month. Taking into account the actual condition, means, needs and other circumstances of the children it would be unsuitable for me to order monthly child support pursuant to the Guideline amount. While the respondent has significant income a large portion of it is received by way of bonuses and dividends which are not paid monthly. In my view the appropriate amount for child support is $10,000 per month.
|[45] The respondent has been paying the s. 7 expenses of the children to this point. Given the amount of child support I have awarded on an interim basis the claimant will now be responsible for these expenses.
[46] With regard to the spousal maintenance claim based on an income of $895,898, the SSAG indicates a range of $18,555 at the low end, $20,199 at the midrange and $21,843 at the high end.
[47] The SSAG at s. 11.1 specifically recognizes that when the payor’s income exceeds the $350,000 “ceiling” these formulas should no longer be automatically applied to divide income beyond that threshold.
[48] The SSAG indicates a range of $6,468 at the low end, $7,160 at the midrange and $7,893 at the high end for an income of $350,000.
[49] In my view the claimant’s expenses for the categories of household expense, vacation and her personal expenses are excessive.
[50] Taking into account the needs of the claimant, as well as s 11.1 of the SSAG the appropriate amount of spousal maintenance is $8,000 per month.
[51] The claimant seeks to have any maintenance orders retroactive to April of 2012 when the respondent was served at the Notice of Family Claim. Taking into account the voluntary amounts that the respondent has paid to the claimant and the cash flow issues that the respondent faces it would create an undue hardship to make that order. Rather I will order that the maintenance orders begin September 1, 2012.
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