Must I Volunteer the Fact That I Got a Pay Raise?

Full disclosure is one of the hallmarks of all litigation processes, and in the case of family law disputes, is particularly important:   The financial disclosure from a couple in the midst of a separation or divorce will inform the settlement process or the findings of a court or mediator in connection with property division and spousal and child support determinations.

What many separated and divorcing couples may not realize, is that even after matters have been largely settled, there is still an ongoing obligation on each spouse/former spouse to disclose financial changes to the other.

In a recent case called Costescu v. Costescu, 2014 ONCJ 218 (CanLII), the couple had been married for 12 years when they separated.  Under a separation agreement at the time, the father paid child support based on a $40K income.   In 2013, after many requests by the wife, this was finally increased to a level commensurate with the assumption that the father earned $41K.

However, the truth was that the father was actually earning over $62K at the time.

The mother was later successful in obtaining an order from the court that the father should pay added support, and that it should be retroactively adjusted back to the year 2010 to reflect the point at which the father’s income had changed.

The court pointed out the general legal philosophy that as parents’ income levels decrease or increase, so do their contributions to the needs of the children, just as if the family had stayed together.   If the paying parent does not increase the amount of his or her support when income goes up, then “it is the child who loses”.  Such an order can be back-dated because “the ultimate goal must be to ensure that children benefit from the support they are owed at the time when they are owed it.”

In this case, the father had engaged in blameworthy conduct.   While stopping short of mandating that the father should have volunteered to disclose his pay raise or increase his support payments to match his actual income, the court wrote:

While the payor parent does not shoulder the burden of automatically adjusting payments, or automatically disclosing income increases, this does not mean that he will satisfy his child support obligation by doing nothing.  If his income rises and the amount of child support paid does not, there will remain an unfulfilled obligation that could later merit enforcement by a court.

Are you a support-paying parent who has recently received a pay raise?  Are you the parent receiving support and suspect your Ex earns more than he or she claims?  Contact us for a consultation.