Undue Hardship and Child Support Claims
In Canada, parents have an obligation to financially support their children even after they divorce or separate from their partner. In our previous article, Child Support 101, we discussed the basics of child support including what legislation governs child support. Prior to reading this article about undue hardship, we suggest you go review the article linked above and our other postings about child support because this article builds on basic child support concepts previously discussed.
Undue hardship is a statutory exemption which, in the right circumstances, can allow parties to deviate from the mandatory base child support payable pursuant to the Alberta Child Support Guidelines or the Federal Child Support Guidelines (collectively the “Guidelines”). If a party can properly evidence undue hardship, an individual may be excused from paying child support pursuant to the Guidelines. Alternatively, if a party can properly evidence undue hardship, an individual may also be entitled to child support greater than that set out in the Guidelines. To be clear however, merely being in a state of financial duress is insufficient to claim undue hardship. A party must meet the test for undue hardship as outlined in section 10 the Guidelines.
The Test for Undue Hardship
There is a two-step test for undue hardship:
- Is the party experiencing undue hardship? And if so,
- Does the party’s household experience a lower standard of living?
To begin, an Application requires that a parent, (or a child in respect of whom a request is made) provide evidence that he or she would suffer undue hardship if child support is paid pursuant to the Guidelines. Both the recipient and payor of child support can claim undue hardship.
Payor: Where the amount of child support is too great considering his or her financial circumstances, such that the payor requires a reduction in support.
Recipient: Where the amount of child support is too little considering his or her financial circumstances, such that the recipient requires an increase in support.
Defining Undue Hardship
The term undue hardship is not defined in the Guidelines, though the Court has filled this gap by defining undue hardship as difficulty, suffering or pain which is excessive or disproportionate. This is not an easy threshold to reach: mere statements that a payor cannot afford to pay or that a recipient or his or her family need more support will be insufficient. The Court has consistently held that undue hardship claims are the exception to the rule.
To provide greater context to difficulty, suffering or pain which is excessive or disproportionate (especially if you are a payor considering a claim for undue hardship) keep in mind that the cut-off line for paying child support in Alberta pursuant to the Guidelines (aka the poverty line) is currently $12,000. In other words, even where an individual is earning only $12,000 gross each year, the Court expects him or her to pay child support even though they likely struggle to meet their own needs at that income level.
Reasons for Undue Hardship
A party must also provide an explanation for why they are suffering such hardship. An Application for a reduction in child support on undue hardship grounds would likely be unsuccessful if the party making such an Application had foolishly gambled their money away or spent it all on luxurious vacations. The Guidelines provide some guidance as to the circumstances which may give rise to undue hardship and such circumstances include where:
- A parent has ‘unusually high levels of debt’ which had been incurred to support the other parent or child prior to separation.
- A parent incurs ‘unusually high expenses’ to exercise access with the child.
- A parent has a legal duty to support another adult or child.
The list of reasons set in the Guidelines is not exhaustive, and other reasons may be valid.
If an individual is successful in demonstrating that they are suffering undue hardship and that the hardship is for an acceptable reason, he or she must still meet the second part of the test.
Standard of Living Test
Part two of the test involves proving that the claimant’s household would enjoy a lower standard of living than the other parties’ household if child support is paid pursuant to the Guidelines. This is an extremely important part of the test: Applications for undue hardship are regularly dismissed because a party fails to disclose financial information required under the 6-stage standard of living test. The 6 stages of the test are as follows:
- Determining the annual income of everyone in the household using the appropriate formula;
- Adjusting the annual income of everyone in the household by deducting the appropriate expenses and by including the appropriate support from everyone’s annual income;
- Determining the ‘adjusted annual income’ for everyone and then combining the ‘adjusted annual incomes’ to determine the total household income for each household;
- Determining the low-income measure amount for each household pursuant to the low-income measures table in the Guidelines;
- Dividing the household income by the appropriate low-income measures to determine the household income ratio for each household; and finally,
- Comparing the two ratios to determined which household has a higher ratio.
As can be surmised from the above, significant legwork must be completed to evidence that a party has a lower household income ratio. Parties who decide to proceed with an Application for undue hardship should devote the time and energy required to meet this crucial evidentiary burden.
If the Court is satisfied that a party is suffering undue hardship and that their household income ratio is lower than the other household’s, the Court may then use its discretion to award an amount of base child support which diverges from the Guidelines.
If you have any questions about your child support obligations and whether you qualify for undue hardship, you can set up a consultation by calling our office at 587-390-3070 or by using the Contact form on our website.
The above information is a general summary of child support obligations and undue hardship: it does not constitute legal advice. EBL Family is not liable for any reliance on the above information and strongly encourages individuals to book a consult if you have questions specific to your circumstances.