Victory: One of the Highest Child Support Awards in BC

We were recently successful in obtaining one of the highest child support awards in BC for our valuable client in the case of J.W. v. D. F. This case involved the father having multiple corporations under his control. These corporations had very complex internal dealings that would move incomes around. It was difficult to prove his true income. Here is what we did to convince the judge that the income he reported in his personal Notice of Assessment was only a fraction of the monies available to him:

Child Support Awards in BC for a 17 year-old and a Disabled Child

Our client had two children in her full time care. One was 17 and the other was 24 years old but was severely disabled. Under the BC law, a child over the age of 19 but still dependent on his/her parents’ care is still a ‘child’ and therefore entitled to child support. We argued that both children deserved child support as though they were under the age of 19. This argument was accepted.

The disabled child needed full time, 24 hour care which rendered our client unable to properly work or take care of herself. On the other hand, her former husband was the owner of multiple corporations which earned sometimes over $4,000,000 in gross revenue. The companies would earn a lot of money but the money would be kept inside the companies or shuffled around and was not paid out to the husband. We argued that the monies kept in the corporations were in fact income to the husband even though he was not claiming them. How?

Determining Child Support Awards When There Are Corporations Involved

Many times, people who own corporations:

1. ‘Expense’ many personal payments as though they were corporate expenses. We argued that some of the expenses need to be ‘added back’ to the father’s income as they were his personal expenses and not corporate expenses;
2. Retained earnings of the corporations were actually income available to him. The fact that he kept his profits within the corporations did not mean those incomes should not be a part of his personal income for child support purposes;
3. He was taking ‘dividend’ income as opposed to ‘T4 income’ or employment income. Dividends are taxed at a much lower rate than ‘wage’ or ‘T4 income’. We therefore argued that the dividend income needed to be ‘grossed up’ and added back to his income;
4. He was paying himself ‘shareholder loans’ which he used as opposed to income in order to defer having to pay taxes. We argued that the shareholder loans needed to be added back to his income as that was money available to him.

Child Support Awards in BC: $10,000 per month based on a $700,000 Annual Income

The father was arguing that his income should be set at $360,000. We argued that his income should actually be $700,000 by considering the factors above. The judge determined that the father’s income was in fact at least $705,000 and payable based on the Child Support Guidelines. This meant that he had to pay $10,000 tax free in child support as opposed to the $4000 per month he was paying previously.

Child Support Awards in BC: Be Careful of the $150,000 Cap

In many child support cases, the payor may argue that although his/her income is higher than $150,000, child support should be capped based on $150,000. This argument has been successful many times. Therefore, it is always best to approach child support for high income parents very carefully and obtain the assistance and advise of a family lawyer in order to ensure you can provide your children with the best standard of living possible.

YLaw can expertly help you with your child support inquiries in BC – whether you are seeking child support or being asked to pay child support. Call us at 604-974-9529 or email [email protected] to set up an initial consultation.