Gifts as Income for Child Support is a tricky family law topic. Our Gifts as Income for Child Support lawyers in BC and Alberta handle these challenging family law cases on behalf of spouses seeking child support as well as for those against whom a child support award is sought. Senior family lawyer, Peter Graburn helps us understand how and if gifts can be included as income for child support purposes.
Gifts as Income for Child Support 1 877 602 9900
The payment of child support is not usually a controversial issue in family law – most parents acknowledge the fact that child support is the legal right of the child, and that both parents have the legal obligation to pay financial support on behalf of their child according to their parenting arrangements and their financial abilities. But what is taken into account in determining the financial ability of parents to pay child support? Should things like free housing, use of vehicles, or financial gifts from other people be taken into account in determining the amount of child support to be paid? In this article, we look at the last issue: should financial gifts (ie. cash or bill payments, etc.) from family members be taken into account in determining child support? When should Gifts as Income for Child Support be taken into account by courts?
Vancouver Calgary Gifts as Income For Child Support
The Courts have described “gifts” as a “one-time indulgence to mark a special occasion, or limited assistance in a time of crisis” (see: Malkov v. Stovichek-Malkov, 2017 ONSC 6822). According to the Federal Child Support Guidelines (FCSGs, s.16), child support is generally payable based on the payor’s Line 150 total income (including salary and wages, bonuses, and other income). Section 19(1) of the FCSGs provides that the Court can impute (impose) a different income for child support purposes in certain circumstances, but receipt of financial “gifts” is not included in that list.
Vancouver and Calgary Child Support 1 877 602 9900
However, the Courts have determined that there are some circumstances where gifts can be included in income for child support purposes and may look at several factors in making that determination (see: Hartley v. Del Pero, 2017 ABQB 1; Bak v. Dobell, 2007 ONCA 304), including:
● the regularity of the gifts;
● the duration of the gifts;
● whether the gifts maintained a certain lifestyle;
● the circumstances of the gifts;
● whether the gifts do more than provide a basic standard of living;
● the income generated by the gifts concerning the payor’s entire income;
● whether the gifts are given to support an adult child through a period of disability or other crisis;
● whether the gifts are likely to continue, and;
● the true purpose/nature of the gifts.
Bak v. Dobell was folowed by the Ontario Court of Appeal in Korman v. Korman, 2015 ONCA 578. Income was imputed to the husband based on “neither irregular nor infrequent” gifts received from his parents. The court found that there was a settled pattern of parental gifts to finance private school tuition or camp expenses for the children, to assist the husband in maintaining the family’s lifestyle, or to underwrite the husband’s various business ventures. The amount of the gifts appeared to approximate the husband’s annual employment income in each of the three years preceding trial.
Gifts as Part of a Lifestyle 1 877 602 9900
So while true (ie. one-time) “gifts” are usually not taken into consideration in determining child support, the Courts are more likely to impose income based on the value of gifts where the gifted funds (ie. recurring cash gifts, bill payments or “loans”, etc.) become a regular part of the child support payor’s lifestyle over time. This has recently been confirmed by the Alberta Court of Appeal in the case of CRC v. DAJC (2020 ABCA 143) [where the payor father’s new wife paid all his day-to-day living expenses and at least some of his discretionary (ie. credit card) expenditures], stating (at para. 20):
As a general rule, gifts are not included in the payor parent’s guideline income but courts retain discretion to impute them in appropriate circumstances. Gifts to payor parents have been attributed as income when they are regular, long-standing, materially affect the payor parent’s standard of living, and are likely to continue… In this context, gifts are not limited to transfers of property ownership to the payor spouse. Regular payments of a payor parent’s everyday living expenses and his or her luxury expenditures may be imputed as income in appropriate circumstances…
Financial gifts from third parties (ie. new spouses, parents, etc.) can be an important part of determining income for child support purposes (particularly when those “gifts” come from high-income family members). While one-time, infrequent, or “bailout” gifts will usually not be included in such income, gifts that form “a major, integral, and essential part of the family’s income” likely will (see: Horowitz v. Nightingale, 2015 ONSC 190).
These are tough cases. It may be difficult for the Courts not to impute income to child support payors who live a lavish lifestyle on a low total (ie. Line 150) income while routinely receiving valuable “gifts” from family members. These situations need to be looked at on an individual, case-by-case basis. Calgary Child Support Gift Lawyers assist their clients understand the highly discretionary nature of Court decisions as to whether gifts received from family members should be taken into account as income for child support purposes, and the many factors that must be looked at in making this determination.