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Does RRSP Income Count Towards Child Support?

We have written before that the concept of “income” for the purposes of determining a parent’s obligation to pay child support is similar – but not identical – to what counts as “income” by the Canada Revenue Agency for tax purposes.   But even though the scope of that concept has been well-established over the years, sometimes support-paying parents will challenge the traditional definition in court, as a means of trying to limit the income on which the support calculation is based under the Child Support Guidelines.

This was precisely the situation in the case of Fraser v. Fraser, 2013 CarswellOnt 15821 (Ont. C.A.), which was heard by the Ontario Court of Appeal.   The father, who was a doctor, had stopped practicing medicine.   He paid no child support at all, even though the mother later found that between the years 2008 and 2012 he received about $800,000.  The money was from various sources:  Some of it was RRSP income, some of it was from a motor vehicle accident settlement, and $300,000 was from the sale of a wine collection.   Given that the father clearly had the means to pay, she went to court to ask for a support order.

The father had various arguments for why the money should not be included in his income.  In connection specifically with about $150,000 in RRSP income, he claimed that this was actually just  capital that he chose to live on, and since it was a non-recurring event it should not be included for the purposes of calculating his support obligation to the children.

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The Court disagreed.   The Guidelines specifically require that in determining support the paying parent must start with his or her “total income” as reflected on the T1 tax form; RRPSs are included in that amount.   The RRSP is accordingly presumed to be part of income, unless a court finds reason (using well-established principles and legal rules) to depart from the usual inclusion, specifically in cases where it would not be fair.  This was not one of those cases.

Do you have a question about any support you might be asked to pay will be calculated?  Contact us for a consultation.

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