Can Irregular Pay Lead To Uneven Support Payments?
When someone is obligated to make child or spousal support payments, their annual income is used as one of the factors to determine how much they will have to pay each month. Most people with full-time employment can expect to receive equal paycheques each week, especially if they are salaried employees. However, not everyone fits this mold, including people who work part-time, seasonally, or who receive irregular payments as part of their work. In a recent case heard by the Ontario Superior Court of Justice, the court whether a father should be made to make equal monthly support payments even though his income did not provide him with regular pay throughout the year.
The parties were married in 2004. They separated in either 2014 or 2015 (the date was disputed). The father is an equity partner in a law firm, and the mother was on long-term disability following a car accident and a fall, though she expected to go back to work shortly after the trial. The mother’s disability income in 2018 was $111,000. The father’s income varied between $881,455 and $989,207 from 2015-2017. In 2018 he expected to earn $24,591 on a bi-weekly basis (his monthly draw), though this would be supplemented by dividends from his employer.
The support issues
The father had stated he agreed to pay both child support and spousal support based on his regular income (which amounted to $639,366). He also offered to pay 66% of their children’s extraordinary expenses. He also agreed to share his dividend payments proportionally with the mother.
The mother, meanwhile, argued that support should be payable based on the father’s 2017 total income of $989,207. This would amount to $12,147 monthly in child support and $20,000 monthly in spousal support. The father was asking to pay $7,949 and $10,261 respectively. The mother argued it would not be fair to require her to wait until the father received his irregular payments, and that she should receive consistent monthly support payments.
The court’s analysis
The court referred to a 2018 decision in which a father received half of his income by way of two yearly bonuses. The court held in that decision that the father’s income should be shared when it was received, writing:
a. Paying the mother additional equity distributions when they are received ensures that the mother is not being paid too little or too much and avoids significant adjustments later on. As well, given the financial structure of the firm, there is no guarantee that the father will receive any additional amounts. It is completely dependent on the father’s performance and that of the firm.
b. The father’s cash flow is not irrelevant. Even if the tax rate he projects is not accurate (53% in Quebec) the amount of monthly income being received by the mother would be grossly disproportionate to the amount available to the father. The father is required to remit quarterly installments to CRA failing which he is charged interest and penalties. It is not realistic to expect him to incur tax penalties because he has to pay significant monthly support based on amounts of income he has not and may not receive.
c. There should be no argument about the father cooperating with respect to both disclosure and payment of additional equity distributions when received. He has always paid the mother agreed upon amounts.
d. The father worked at this law firm throughout the marriage. The parties lived a lifestyle whereby their monthly budget was dictated in large part by the father’s draws. The additional distributions were enjoyed when and if they were received. Therefore, the answer to the question posed by the mother’s counsel as to who should bear the burden of when and if the father is paid extra amounts by his firm is that both of the parties should bear that burden.
e. There is no demonstrated need by the mother for the additional amount of support each month to meet her expenses. She will have more than enough to meet her needs and those of the children.
The court ruled that the father should pay support on a temporary basis based on his regular income with additional payments due upon the receipt of additional income. This was a temporary order with the full trial still to take place.
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