High-Net-Worth Child Support Considerations in Ontario

Child support must be addressed as a priority when a marriage or marriage-like relationship ends and there are children to consider.

The right of the child to be financially supported until the age of majority (18 in Ontario) is a basic right that parents must comply with.

Usually, the parents work it out for the best interests of the child. Otherwise, the court intervenes and will set the terms. For high-net-worth payors of child support, this can get complicated because there are different rules for parents with incomes over $150,000.

For affluent individuals, an effective legal strategy for child support may need to be tailored to your circumstances rather than follow the general rules that apply to most parents. Here are the main child support considerations for high-net-worth parents in Ontario.

The starting point with child support for many parents is the Ontario Child Support Guidelines. Contained in the Family Law Act, these rules apply to all parents in relationships with children in Ontario, regardless of whether or not they are married.

The guidelines aim to establish a fair standard of support for children, as is their right, and to reduce conflict by making the calculation of child support more objective.

The federal child support guidelines are similar and are outlined in the Divorce Act, which only applies to married parents who divorce.

In Ontario, if a child spends less than 40 percent of the time sleeping at the support-payor parent’s home, the sole focus of child support calculations is on that individual’s income total income and the number of children. If the parents divide time 50-50, both parents’ incomes are considered.

Generally speaking, as the payer’s income goes up, the table amount of support keeps going up with it—but there are limits.

The formula used to calculate child support may be less applicable if your net worth is much higher than $150,00 per year. The online tools available can simplify the calculation for parents with average incomes, where the only relevant factors to determine support are the payor’s income and the number of children.

More caution is necessary for affluent individuals. The figures from online calculators may be less accurate for high-net-worth child support calculations—and may require a little more human intervention. it’s generally best for a child support or family lawyer to assess the full financial picture of the family before providing a personalized child support figure.

Parents can create their own child support arrangements (as long as they are in the best interests of then children) or ask the Ontario courts to calculate support and issue an order.

In the latter case, the courts will refer to the Child Support Guidelines, which include a series of tables. The presumptive rule under Section 3 of the guidelines calculates child support based on using the applicable table and considering the number of children under the age of majority and the income of the paying spouse.

The amount of support may be considered too high in the case of a paying parent’s income exceeding $150,000. A special section of the Child Support Guidelines (Section 4) addresses this in the following way:

Where the income of the parent or spouse against whom an order for the support of a child is sought is over $150,000, the amount of an order for the support of a child is:

1. the amount determined under section 3; or
2. if the court considers that amount to be inappropriate,
   1. in respect of the first $150,000 of the parent’s or spouse’s income, the amount set out in the table for the number of children under the age of majority to whom the order relates,
   2. in respect of the balance of the parent’s or 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 parent or spouse to contribute to the support of the children, and
   3. the amount, if any, determined under section 7. O. Reg. 391/97, s. 4

High-net-worth parents can often get a more reasonable and moderate order by asking the judge to apply an amount to anything over the first $150,000 earned, as per the terms of Section 4 above.

The term “inappropriate” is subjective, and considerable discretion may be exercised by judges in this respect. Asking a qualified child support lawyer to plead your case can, therefore, be highly beneficial when making high-net-worth child support calculations.

It should be recognized here, however, that if your income is just over $150,000 per year, there may be little deviation from the standard formula calculation. The higher the amount above this base amount, the more likely there is to be deviation from the formula calculations.

A seasoned child support lawyer may use one of the following strategies to bolster a case for a high-net-worth parent to pay a lower child support amount:

• Arguing unreasonable wealth transfer rather than reasonable need: the formula calculations would amount to a transfer of wealth from the payor to the recipient—in excess of any reasonable need for the child.
• Arguing the child’s modest living standard: when the parents lived together, the child was accustomed to a modest living standard, which can be maintained with a lower amount than the formula calculation.

High-net-worth parents are unlikely to be successful by simply arguing they can’t afford to pay, have a large amount of debt, live in a location with a high cost of living or have other children to support. The courts tend to focus on the needs of the child in question in these situations.

If a child support order is issued by the Ontario courts, parents must follow it until the child turns 18 and child support ends or a modification of the order is made by the court.

Modifications are only likely to be successful if there is a substantial change in circumstances, such as a job loss, demotion, or significant change in earnings. A Motion to Change must be filed with the local court to instigate the legal process to modify a child support order.

Generally, prenuptial agreements should not address the matter of child support for the couple’s children because any arrangement agreed upon would not be legally binding. Child support is the right of the child, which cannot be “bargained away” by parents.

To ensure you calculate child support correctly during a high-net-worth separation or divorce, consult with an experienced family lawyer Nima Amiri at Amiri Family Law. Book a consultation for advice on your legal options.