Introduction:
High Income Support: Do the Guidelines apply? We are asked this question frequently. Peter Graburn, one of our team of high net worth Calgary separation lawyers, explains the principles that apply to this often vexing issue. Hiring experienced family lawyers who regularly handle high-income divorce and separation matters may be one of the most important decisions you make during the breakdown of a relationship.
Table of Contents
High Income Support: Do the Guidelines Apply?
It is well established in law, and generally accepted by most separating couples, that a non-custodial parent has an obligation to pay child support to the custodial parent on behalf of the child. Children are dependent on their parents and are usually unable to support themselves financially.
Spousal support, on the other hand, is not automatic. A claiming spouse must first establish entitlement, whether on a contractual, needs-based or compensatory basis, before issues of quantum (how much) and duration (how long) are determined.
So how is financial support calculated? Both child support and spousal support are based primarily on the income of the payor. But what happens when the payor earns a significantly high income? Do different rules apply? The short answer is yes.
Child Support and High Income Earners
Child support is determined under the Federal Child Support Guidelines (FCSGs), which were introduced in 1997 and adopted across Canada. The purpose of the FCSGs was to establish minimum levels of child support and reduce conflict over basic support amounts. Parents remain free to pay support above the guideline amounts if they choose.
The FCSGs set out tables that determine the amount of child support payable based on the payor’s total Line 15000 income as reported on income tax returns and notices of assessment, up to an income of $150,000, and depending on the number
of children. Simple? Sometimes.
Income Over $150,000
What if the payor’s income exceeds $150,000? In that case, the FCSGs provide a formula for calculating support on the portion of income above that threshold. Section 4 of the FCSGs gives a judge discretion, for incomes over $150,000, to
either:
- set child support strictly in accordance with the guideline formula for income over
$150,000; or - adjust the guideline amount upward or downward to reflect the needs of the child
and the financial ability of each parent, with the goal of avoiding an inappropriate
transfer of wealth between parents
In practice, reductions below the guideline amount are rare and usually arise only in exceptional circumstances, such as extremely high incomes (for example, income exceeding $1 million).
High Income Support and Spousal Support
Is spousal support treated the same way? Yes and no.
Where parties cannot agree on spousal support, they or the Court often refer to the Spousal Support Advisory Guidelines (SSAGs). Unlike the FCSGs, the SSAGs are not law. They are advisory guidelines developed to provide ranges for determining the sharing of income between separated spouses and the appropriate duration of support. Although not binding, the SSAGs are closely followed by the Courts.
One important proviso appears in Part 11 of the SSAGs: they are not intended to apply strictly where the payor’s income exceeds $350,000. What happens then?
Part 11 of the SSAGs outlines two possible approaches:
- The “Minimum Plus” approach, which uses the SSAGs to calculate support up to the $350,000 income level and then applies discretion to increase the amount to reflect the higher income; or
- The “Pure Discretion” approach, where the Court determines spousal support without using the SSAGs to establish either a minimum or maximum, relying instead on the specific facts of the case
Final Thoughts
As this discussion shows, answering the question “High Income Support: Do the Guidelines Apply?” is rarely straightforward. While guidelines exist for both child support and spousal support, they offer limited certainty when dealing with high- income earners ($150,000+ for child support and $350,000+ for spousal support). As a result, these cases are often decided on a case-by-case basis, heavily dependent on the unique facts of each situation.
High-income support cases require careful analysis and strategic presentation of evidence. Understanding how discretion is exercised — and how to address it — is critical in achieving a fair and sustainable result.
