Child and spousal support can be a difficult concept to understand post-separation, as funds that were once shared in the relationship now must be used to cover the expenses of two separate households.
With the drastic rise in the cost of living in recent years, we oftentimes have clients wondering whether this rise in everyday costs has an impact on their child or spousal support obligation or entitlement. In a nutshell, yes, legislation allows for adjustments in support to be made given the rise, or fall, of the cost of living or based on financial circumstances.
Section 34 of the Family Law Act, confirms that an Order for spousal support may allow for the support amount to be indexed (or adjusted) each year, based on the indexing factor. The indexing factor is determined based on the Consumer Price Index for Canada, which is published by Statistics Canada each year. The Consumer Price Index measures changes in prices paid by consumers over time, and therefore is adjusted by changes to the cost of living.
A term for indexing of spousal support can also be included as a term in a separation agreement.
In Canada, there are a few child support tables that set out the baseline child support amount depending on the number of children and their annual income, including federal, provincial and territorial tables. In Ontario, the provincial child support guidelines follow the federal guidelines.
Unlike spousal support, table child support is not adjusted by cost of living, but based on the most recent table amount released under the Guidelines. The current version of the Guidelines was released in 2017.
With that said, there are some ways to adjust the table child support being paid if the parties do not believe the table amount is reflective of their financial situation or appropriate under their circumstances. For instance, the parties can come to an agreement outside of the table amounts to factor in funds that need to be allocated to the children or elsewhere.
If a party is really struggling with the table child support payments in this economy, either party can bring a court application to adjust the table amount to an amount that best reflects their economic situation, if appropriate. Section 10 of the Child Support Guidelines allows for parties to make a claim for undue hardship. A claim for undue hardship is a difficult claim to make and requires the party to demonstrate:
If a finding for an undue hardship claim is found by the court, the court can award an amount that differs from the table child support amount. While this is not directly related to the cost of living, a significant increase in expenses due to inflation may be reasonable in making such a claim.
Both child and spousal support obligations are influenced by economic factors such as inflation and the rising cost of living. While spousal support can be adjusted through indexing to reflect these changes, child support typically follows fixed tables unless the parties agree to adjustments or an undue hardship claim is successfully made. As financial circumstances change, it is important for individuals to be aware of their options for modifying support arrangements to ensure obligations are met while managing the challenges of maintaining two separate households. Seeking legal advice can help navigate these complexities and ensure that support arrangements remain fair and appropriate. We are here for you!