How To Claim Extracurricular Expenses As Part Of Child Support
Extracurricular activities are a great way to keep children engaged and provide an avenue for them to explore and discover their passions while having fun, even though their costs can vary widely.
Every parent have flowing responsibilities to support their children in every way irrespective of the status of their marital relationship. So as a parent, you have the opportunity to support your child to make the best choice of extracurricular activities based on their strengths and passion.
In the event of a marital breakdown, it can be a big challenge for you as a parent if your child chooses extracurricular activities with a high price tag, especially when the total cost is in excess of the amounts estimated in the child support obligation.
Not forgetting that the general well-being of the children must continue to be treated on a balanced scale and if necessary, with legal sanction after marital separation, the law requires the separating parents to make financial arrangement to cover every reasonable and genuine expenses for the children of the marriage.
Money spent on a child’s extracurricular activities is clearly a reasonable and genuine expense made towards the well-being of the child.
So as a custodial parent, you can seek to have the child support obligation modified to include your child’s extracurricular expenses as extraordinary expenses.
The challenge is that it is difficult sometimes to determine if an expense like the cost of extracurricular activities could be classified as extraordinary expense for child support purposes. An experienced family lawyer can file a motion to modify the child support obligation with a court.
The Court’s usual approach to solving this challenge is by considering the following factors to determine what expenses can be categorized as special and extraordinary expenses:
- need
- reasonableness
- types of extraordinary expenses incurred by the parents before the separation
Before discussing how to claim your child/children’s extracurricular activities under extraordinary expenses, here’s Canada’s official/legal definition of Extraordinary Expenses.
What is “Extraordinary Expenses”?
(1.1) For the purposes of paragraphs (1)(d) and (f) below, the term extraordinary expenses means:
(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the Court has determined that the table amount is inappropriate, the amount that the Court has otherwise determined is appropriate; or
(b) where paragraph (a) is not applicable, expenses that the Court considers are extraordinary taking into account
(i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the Court has determined that the table amount is inappropriate, the amount that the Court has otherwise determined is appropriate,
(ii) the nature and number of the educational programs and extracurricular activities,
(iii) any special needs and talents of the child or children,
(iv) the overall cost of the programs and activities, and
(v) any other similar factor that the Court considers relevant.
Determining Special or Extraordinary Expenses
Under section 7 of the Federal Child Support Guidelines, the Court has a wide range of discretion to declare certain expenses as special and extraordinary expenses by considering the children’s best interest.
Extraordinary expenses can be school expenses such as paid tuition amount and other fees required for enrollment or attendance at an eligible institution. A precondition for enrollment may also be regarded as claimable school or educational expenses. For example, if a computer is a precondition for enrollment or admission, such will be considered as claimable educational expense.
Sometimes extracurricular activities do not form part of the core school syllabus, and are optional, yet still educational and informing. Such activities can include debating clubs, musicals activities, arts and sports.
Special or extraordinary expenses are determined according to Section 7 of the Federal Child Support Guidelines, which is as follows:
7 (1) In a child support order, the Court may on either spouse’s request provide for an amount to cover all or any portion of the following expenses (which may be estimated), taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and the family’s spending pattern prior to the separation:
(a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment
(b) the portion of the medical and dental insurance premiums attributable to the child
(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counseling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses
(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs
(e) expenses for post-secondary education
(f) extraordinary expenses for extracurricular activities
Sharing of Expense
(2) The guiding principle in determining an expense amount (referred to in subsection (1) above) is that the spouses share the expense in proportion to their respective incomes after deducting from the expense any contribution from the child.
Subsidies, Tax Deductions, etc.
(3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the Court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.
Universal Child Care Benefit
(4) In determining the amount of an expense referred to in subsection (1), the Court shall not take into account any universal child care benefit or any eligibility to claim that benefit.
Note that Alberta Child Support Guidelines apply if you start your claim under the Family Law Act of Alberta.
A parent or a legal guardian of a child can initiate Child Support and Expense Claim before a court of competent jurisdiction in Alberta under the Divorce Act of Canada or Family Law Act of Alberta. The child himself, or any person with the permission of the Court can also initiate the claim.
For legal advice and representation in family law matters, we recommend you consult an Alberta family lawyer. A family lawyer can bring or defend a special and extraordinary expense claim on your behalf, and make submissions to the Court. Contact us for more information on what a family lawyer can do for you.
Satish offers professional legal advice and experience drawn from a multicultural background. He has spent his years in practice supporting clients through their family law, business law, real estate law, immigration law and wills and estates matters. He is able to find innovative solutions for his clients thanks to his rich, diverse background, which allows him to examine clients’ legal problems from a variety of different perspectives.
How To Calculate Child Support Payment For Self-Employed Parent
Generally, the employment income of the payor parent determines child support payment amount. The Federal Child Support Guidelines Table for divorce cases filed under the Divorce Act of Canada outlines the amounts based on payor parent’s income. Also the Alberta Child Support Guidelines covers family law cases filed as per Family Law Act of Alberta.
Child Support Payment for An Employee Payor Parent
If the payor parent is an employee, the income on line 150 of their income tax return is used to determine child support payment. In this case, the Federal or Alberta Guidelines Table outlines the child support payment amount according to the number of children of the parties.
How To Calculate Total Income Of A Self-Employed Payor Parent
It is more challenging to calculate income for child support payment purposes when a payor parent is self-employed. There are some court considerations that can make the income amount stated on line 150 of a payor parent’s tax return inaccurate. In majority of such cases, the line 150 income amount is no longer accurate in showing how much is available to pay child support.
During a divorce that involves self-employed parties, the divorcing parties have to decide how to divide their business. In making this decision, the parties require a thorough evaluation of their business.
The Court Decides Reasonable Business Expenses
Generally, the Income Tax Laws of Canada permits deduction of business expenses from a person’s total income.
However, the court may not accept all business expenses deducted in a tax return as reasonable and proper deduction from total income in determining child support payment.
Fort this reason, it is the duty of a self-employed payor parent to provide full financial disclosure to other parent. This means the payor parent bears the burden of proof – to show that business expenses deducted in the tax return are reasonable and proper for child support payment purposes.
For calculation of income for child support payment purposes, a business expense could be considered unreasonable even though it is is permitted under the Income Tax Act.
A payor parent receives benefits from deducting their expense from total income. The court will look into these various benefits and review whether the expense was for the payor parent’s personal benefit and use. Vehicle, cell-phone, travel, and entertainment expenses are some of such expenses that fall under this category.
The court has the power to add back unreasonable expenses the self-employed payor parent claimed to their total personal income.
Burden Of Proof For Self-Employed Payor
There have been real cases where the court impute payor parent’s income by adding back deducted expenses. For example, the Court of Appeal in Alberta recently granted an order in Cunningham v. Seveny, 2017 ABCA 4, for the same reasons discussed in this article. The court deemed some of the claimed expenses were for the personal benefit of the payor parent.
Therefore, it is in the best interest of a self-employed payor parent to provide proper financial disclosure. This includes, but not limited to, explanations of expenses, benefits, management fee, and salaries. Otherwise, the court can take adverse action by presuming that the self-employed payor parent did not provide proper evidence because it was against his own case.
Start With Guideline Income
A professional accountant’s opinion can be useful for proper review of financial statements of the self-employed payor parent’s business. The accountant will help find out the correct “guideline income” to calculate monthly child support payments.
Spousal Support Payment Income Calculation
A party seeking an order for spousal support can use the same method discusses above to calculate a payor spouse’s income.
For legal advice and representation in child support related matters, we recommend you consult an Alberta family lawyer. A family lawyer can bring or defend a child support claim on your behalf, and make submissions to the court. Contact us for more information on what a family lawyer can do for you.
Satish offers professional legal advice and experience drawn from a multicultural background. He has spent his years in practice supporting clients through their family law, business law, real estate law, immigration law and wills and estates matters. He is able to find innovative solutions for his clients thanks to his rich, diverse background, which allows him to examine clients’ legal problems from a variety of different perspectives.