Divorce Blog

Federal Child Support Guidelines: What you need to know.

By Karen Stewart

Child Thumbs UpA look at the Federal Child Support Guidelines

It has always been important that parents minimize future conflict by proactively defining expectations regarding children and money.  Among other conversations, your Fairway Divorce Solutions mediator will encourage parents to discuss expectations regarding tax implications for children, processes to review child support, management of costs for extraordinary expenses and medical conditions (if they were to occur), life insurance to support the children in the event of a death of a parent, and saving for children’s future education.

The more detail that is identified in your Fairway Resolution Plan, the less likely you will have a future conflict regarding these circumstances, should they arise.

The Federal Child Support Guidelines identify broad categories of child related expenses that might not be considered a part of your monthly child support payment.

These expenses are often referred to as “section 7 expenses,” and may cover all, or a portion of the costs.  The inclusion or exclusion of a section 7 expense can take into consideration the necessity of the expense to the wellbeing of the child, the reasonableness of the expense compared with the financial resources of the parent, as well as the family’s spending patterns prior to separation. These expenses are generally shared in proportion to each of the parent’s incomes (adjusted for spousal support).

The categories of section 7 expenses, as included in the Federal Child Support Guidelines, are:

  • Child care expenses incurred as a result of the custodial parent’s employment, illness, disability or training for employment
  • That portion of the medical and dental insurance premiums attributable to the child
  • Health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment; professional counselling provided by a psychologist, social worker, psychiatrist, or any other person; physio-, occupational, or speech therapy; and prescription drugs, hearing aids, glasses and contact lenses
  • Extraordinary expenses for primary or secondary school education, or for any other education programs that meet the child’s particular needs
  • Expenses for post-secondary education
  • Extraordinary expenses for extracurricular activities.

In the province of Alberta, the Maintenance Enforcement Program (MEP) has recently changed how it enforces certain types of extraordinary child-related expenses.   Historically, MEP has interpreted and enforced payment of expenses based on general statements that may be identified under a broad category in a written agreement, or court order. With the recent changes, MEP now requires more detailed information and will only enforce section 7 expenses that are clearly identified in the agreement/order.

For example, if the agreement/order only provides a general category for “post-secondary education” and does not specifically identify tuition, books, room and board, and student union fees as a section 7 expense, MEP will only enforce the tuition and books.  Or, perhaps the agreement/order only provides a broad category for “hockey,” or “art classes,” without further direction MEP may enforce any expense related to this activity.

When determining the proportional share for child care, you should identify any tax benefits and subsidies available to the parent who is incurring the expense, and the effect of these benefits on the amount owed by the other parent.  Without this clarity, you may be overpaying (or, underpaying) your childcare obligations. To better understand the tax implications of child care, you may require assistance from an accountant, or a Certified Divorce Financial Analyst (CDFA).  Many Fairway Divorce Solutions mediators also carry the CDFA designation.

Whereas it has always been important to clearly identify your expectations, taking the time to identify the financial expectations of your co-parent is more important than ever.  As such, your parenting plan should describe expectations regarding who will administer the payment, when a verbal agreement is sufficient when it is necessary to have written agreements, when to develop specific budgets for sports equipment, and maybe when it will be necessary to provide receipts as proof of payment. When reviewing extraordinary expenses, your Fairway Divorce Solutions mediator will work with you to uncover your expectations regarding these expenses and develop processes for co-parents to review future expenses when they occur.