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Incomes Over $150,000 And BC High Income Child Support
The Vancouver Child Support Guidelines (“CSG”) allow for a departure from a rigid application of the child support guidelines once a payor earns more than $150,000 per year.
In BC high income child support disputes the “incomes over $150,000 rule” only applies when incomes are far above this threshold. So how do courts decide Vancouver High Income Child Support cases?
Our BC High Income Child Support lawyers know that in reality a court will only begin to start to depart from the guidelines incomes will need to be over $650,000 and really begin to depart frequently with incomes close to $1,000,000. per year. Once you get above these levels the amount payable becomes unreasonable and some might say even “financially absurd”.
BC High Income Child Support CSG Calculations Get Excessive Over $1,000,000 of Income
- On $150,000 support for 1 child is $1,323
- On $750,000 support for 1 child is $5,763
- On $1,500,000 support for 1 child is $11,313
- On $2,500,000 support for 1 child is $18,713
- On $5,000,000 support for 1 child is $37,213
Wealth transfer Can Occur When BC Child Support Becomes Excessive
You can see how the mathematical formula for child support becomes excessive and results in a transfer of wealth each month of the surplus to the receiving spouse that does not benefit the child. In some cases with adult children courts will let the paying parent pay costs directly for and even to the child.
BC High Income Child Support Case Explains Rules To Depart From Strict CSG
A recent BC High Income Child Support case of H.S.S. v. S.H.D summarized what the Court can do to ensure a child support payment does not become absurdly high from a slavish application of the Child Support Guidelines once the resistance threshold of $700,000-$1,000,000 is met.
[379] In this case, given Mr. S.’s very high income, (over $3,000,000) the Court must also turn to s. 4 of the Guidelines.
[380] Where the income of a payor parent is over $150,000, s. 4 authorizes the Court to deviate from the Guidelines table amount if it considers the prescribed amount to be “inappropriate”. Whether a court should depart from the Guidelines is a matter of discretion: Hathaway at para. 27.
[381] Section 4 provides as follows:
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.
[Emphasis added.]
[382] In Metzner v. Metzner, 2000 BCCA 474, the Court of Appeal summarized the principles that inform a judge’s discretion under s. 4 of the Guidelines. That instructive distillation was recently affirmed by the Court of Appeal in Hathaway. While all the principles are pertinent, the following principles are of particular relevance:
[30] …
7) While child support payments unquestionably result in some kind of wealth transfer to the children which results in an indirect benefit to the non-paying parent, the objective of child support payments must be kept in mind. The Guidelines have not displaced the Divorce Act which has as its objective the maintenance of children rather than household equalization or spousal support (para. 41).
8) The court must have all necessary information before it in order to determine inappropriateness under s. 4. If the evidence provided is a child expense budget, then “the unique economic situation of high income earners” must be considered.
9) The test for reasonableness of expenses will be a demonstration by the paying parent that the budgeted expense is so high “as to exceed the generous ambit within which the reasonable disagreement is possible”: Bellenden v Satterthwaite, [1948] 1 All E.R. 343 at 345.
[383] In Hathaway, the Court clarified that a budget for reasonable expenses is only one factor that “goes into the mix of the entitlement to support” for the children of wealthy parents. The Court described the other animating factors as including the parties’ lifestyles before and after separation, and the values and aspirations the parents have for their children: at para. 35. This list of considerations is not exhaustive and the weight to be accorded to each factor is a matter of judgment in each case: Macdonald v. Macdonald, 2002 BCCA 46 at para. 18. It is noteworthy that these authorities all involve children under the age of majority.
[384] In Y.H.B. v. J.P.B., 2014 BCSC 618, Mr. Justice Savage, in considering the appropriate quantum of child support for an adult child of wealthy parents, concluded that such a determination must be considered in the context of the adult child’s reasonable needs: at para. 41. This conclusion echoes the Supreme Court of Canada’s caution in Francis v. Baker, [1999] 3 S.C.R. 250 at para. 41, that a child support order that greatly exceeds the child’s reasonable needs may be considered a functional wealth transfer to a parent or de facto spousal support.
In the end the court ordered direct payment of tuition and books, medical and travel costs costs be paid to the child plus $5,000 a month to the mother as child support.
