BC Spousal and Vancouver child support cases involve the use of support guidelines to reach a fair payment for all parties involved in a support dispute. The Child support guidelines and the Spousal Support Advisory Guidelines ONLY work when the correct amount of income is used for both spouses.
Our BC Self Employed Guideline Income Calculation Lawyers Will Ensure A Proper Guideline Income DeterminationHowever, we often see spouses and even some family lawyers involved in child and spousal support cases, confused over how, or what, the correct way to determine their own income or their spouse’s income is. For our high net worth clients and our wealthy businesspersons who have large company or professional earnings that they need to use to continue to make profits, the proper calculation of spousal or child support is imperative.
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The personal tax return line 150 is not the holy grail of guideline income determination. Guideline income calculation issues can included:
• Capital gains and stock options;
• discretionary income;
• personal benefits received;
• barter or cash under the table;
• corporate or partnership pretax profits;
• one time sources of income;
• imputed income;
• averaging incomes when incomes fluctuate;
are among several complex issues that require a sound legal strategy to ensure the right income is used before we press the “calculate” button.
Corporate Pre-tax Profits Can be Less Than Monies Drawn Out AND Section 18 of the Child Support Guidelines Can Be Used to Lower Income Below Tax Return Line 150
Lorne MacLean, QC has succeeded in court on arguments that a lower income than the line 150 tax return be used in spousal and child support cases. Here is an extract from one of his recent successful argumemnts on behalf of a paying spouse.
Lorne Maclean QC used this extract from Bartkowski to obtain a lower support payment based on a lower income being used than that which was found on his client’s income tax return:
[34] As can be seen, nothing contained within these provisions of the Guidelines indicates that s. 18 cannot be used to reduce the “line 150” amount. It is possible to read the phrase “does not fairly reflect all the money available to the spouse” in s. 18(1) to mean that that section will only apply when more income is available to the payor spouse than was reported in line 150. However, this interpretation probably lends too much significance to the wording, especially since s. 18(1) imports s. 17 into it.
[35] Section 17 defines broad parameters for varying T1 amounts when it “would not be the fairest determination” of income. I conclude from this interpretation that the purpose of s. 18 is to assist courts in making the fairest determination possible and as a result the narrow reading and the narrow interpretation that it can only be used to increase the line 150 amount would unfairly restrict this application.
[36] In Francis v. Baker, [1993] 3 S.C.R. 250, the Supreme Court of Canada considered the proper interpretation of s. 4 of the Guidelines. That section empowers the court to set an amount for child support that it deems “appropriate” when the payor spouse’s income is in excess of $150,000.00 and the court considers the Guideline table amount to be “inappropriate”. Bastarache J. held that s. 4 could be used to vary the support by either increasing or reducing the table amount. He explained, at para. 40, that the section must be interpreted in light of the stated objectives of the Guidelines:
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.
[37] It is noteworthy that Francis deals with a provision of the Guidelines which utilizes the word “inappropriate”, and as such, these comments are of limited assistance. It is apparent, however, from Francis that an interpretation of s. 18 of the Guidelines should give effect to the objectives of flexibility and fairness, although s. 18 makes no reference or mention of “appropriateness”.
[38] A question arises therefore; whether s. 18 is open to such a broad interpretation as was found by the Supreme Court of Canada in Francis, supra, to apply to s. 4.
[39] In Francis, the court was dealing with varying the Guideline table amount under s. 4 and not the line 150 income amount.
[40] A review of the provisions of the Guidelines, however, demonstrates that they are generally designed to allow courts to arrive at an amount of child support that would be appropriate in all the circumstances. In Francis, the Supreme Court of Canada obviously favoured a broad interpretation of the legislation when it considered the application of s. 4. This objective perception of the Guidelines was recently commented on by Wedge J. in Bucholtz v. Smith, 2001 BCSC 1176 (CanLII), 2001 BCSC 1176, where at para. 161 she stated:The Guidelines are designed to establish a fair standard of support for children regardless of a spouse’s intent: . . .
[41] It would follow therefore that if the purpose of the Guidelines is ultimately to arrive at an income that is fair and accurate in all the circumstances, a narrow interpretation restricting the application of s. 18 only in limited circumstances where more income can be imputed to the payor spouse than appears on line 150 would be inconsistent with the legislative scheme. “Fair” must mean that the amount available for child support is fair as between the payor parent and the recipient child. If the amount of income declared in the tax return at line 150 truly does not reflect the amount of income available to the payor spouse for the payment of child support, the court should be able to consider how much income is actually available so that it might order a reward that is both fair and realistic.
[42] I therefore find that s. 18 could apply to reduce Mr. J.R.B.’s line 150 income as did Master Baker in the brother’s litigation. The question then turns to whether or not it is both fair and realistic to make that reduction.
If you have a high stakes spousal or child support case in BC and you need the assistance of our top BC Self Employed Guideline Income Calculation Lawyers, click here to book an appointment with us to find out what income is really the right one to use before you press calculate.
