The Problems with the Guidelines

The Report revealed there are numerous flaws with the Guidelines.  Chief among them are the following, which form the basis of the Action: 

  1. The Guidelines pretend to be based on a mathematical formula.  It is solved for one situation, incorrectly, since the formula is full of patently false assumptions that all favour the CP.  The flawed answer is then used for every situation where the NCP has the same income and number of children.

    Among the things the Guidelines ignore or assume are:

      • the income of the custodial parent is ignored;
      • the differing costs of raising children at different ages and in different locations is ignored;
      • they assume the CP incurs all the costs of the children and the NCP has no costs;
      • most of the tax credits and government benefits received by the CP are ignored;
      • any responsibilities of the NCP to maintain children from prior or subsequent relationships are ignored; and
      • it is assumed parents spend the same percentage of their after tax income on their children at higher income levels as they do at lower income levels, when it is obvious it is a decreasing percentage.
  2. An equivalence scale is a set of percentages that provide the amount of extra spending needed to keep a household at the same standard of living when the extra person is added.  The child support formula uses the 40/30 equivalence scale.  Applying that scale, adding a second person to a single person household requires an extra 40% in spending to maintain the same standard of living, and each additional person thereafter, requires an extra 30% (of the costs of the first person) in spending. In the case of a custodial parent with two children, an extra 70% in spending is therefore required to maintain the same standard of living.The equivalence scale approach is a reasonable way to assess the incremental cost of children, but the choice of scale and whether the same percentage is applied, at different ages and income levels, for instance, makes a substantial difference.The 40/30 equivalence scale is an arbitrary, high and unsupportable equivalence scale.  While the DOJ alleges that the “amounts in the tables are based on economic studies of average spending on children in families at different income levels”, this is not true.

    It is not known why the information provided by the DOJ or the Guidelines themselves  doesn’t just say that the result of their supposedly complicated analysis is the NCP is, for the most part, required to pay the CP a fixed percentage of what is essentially actual after tax income. The material exception is the amount the NCP would otherwise pay is reduced by taking account of a small portion of the government payments / credits for children received by the CP.  Aside from this adjustment, the percentage is 16.7% for one child and 25.9% for two.

  3. When the amounts awarded under the Guidelines are compared to what the 40/30 scale says will be spent on children at that income level, the CP is consistently being substantially over compensated.  If a more reasonable equivalence scale was used to test the current level of payments, the calculated overpayment would be even greater. The disparity would be compounded further if any of the other ignored factors favoring the CP were considered.
  4. While the Guidelines obligate the NCP to contribute the table amount of child support towards the maintenance of children, the Guidelines simply assume the CP’s contribution.
  5. The NCP is not allowed a deduction for any spousal support payments they must make to the CP.  For example, if their income is $100,000 and they pay $25,000 as spousal support, their child support amount is still calculated on the $100,000.
  6. The Guidelines ignore the fact that add-on expenses under Section 7 of the Guidelines, which are in addition to the table amount of child support, are already supposed to be covered by the table amounts of child support.  These add-on expenses are therefore double-counted. Also, the Guidelines stipulate that those “extra” expenses should be shared on the basis of the pre-tax income ratio when clearly, the after-tax rate makes much more sense.

The following additional problems with the Guidelines are not the primary grounds for the Action, but should be considered as part of the matrix.  Although the Action is not a Charter or division of powers case, the Guidelines nevertheless must be consistent with both of these principles of law.

 

  1. The NCP must endure the yearly cost and humiliation of disclosing their financial information to the custodial parent, with no information supplied by the CP. This extends to revealing the income of corporations in which they have a material interest.
  2. There is no accountability in the Guidelines to ensure that child support payments, including the amount it is assumed the CP pays, are being used for the benefit of the children.
  3. Maintenance enforcement agencies run by the provincial governments have wide-ranging powers to pursue collection of child support payments such as wage and bank account garnishments, passport suspensions, and imprisonment.  How does all this square up with Charter values if the Guidelines are void?
  4. While, in very extreme cases, the NCP can make a court application for the reduction of child support, it is unlikely the NCP has any money to seek such remedy.  It requires considerable information on both the families of the CP and the NCP, a complicated analysis, and makes no attempt to resolve what the real question is supposed to be.  The real question is supposed to be determining whether the costs of the child are being shared in accordance with the relative means of each parent, not whether the NCP and their family has been impoverished.
  5. The Act already provides for the payment of spousal support, where warranted.  The division of marital property is a matter of provincial law, not federal law.  If the Guidelines are transferring property over and above a reasonable payment for child support, does the federal government even have the authority to order such excess payments?