Christine Doucet – April 2020
Last week, my colleague Danika Beaulieu blogged about the effect of the coronavirus pandemic on child and spousal support obligations (https://www.mdwlaw.ca/family-law-support-obligations-during-coronavirus-pandemic/). She correctly noted the pandemic is affecting the income of a significant number of Canadians and impacting their ability to meet their financial obligations, including support payments. She pointed out that, where possible, payors of support should advise the other party of a change in their financial circumstances and attempt to reach a resolution given that the courts are not currently available to provide direction on such matters.
Today, I am addressing the related issue of special or extraordinary expenses, also known as section 7 expenses, during the pandemic.
Child support payors generally have two separate support obligations – a “guideline” payment, which is often a set monthly amount, and a contribution to certain expenses under section 7 of the federal Child Support Guidelines. The theory is that most day-to-day expenses are encompassed by the guideline payment but certain “special or extraordinary” expenses require a separate contribution from each parent. Expenses included in that category are:
- Childcare expenses such as daycare, after-school programs and summer camps;
- Health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, counselling, physiotherapy, prescriptions, etc.;
- Certain education expenses, such as private school;
- Post-secondary education expenses; and
- Certain extracurricular activity expenses.
In “normal” times, parties are generally required to contribute to the above expenses in proportion to their incomes. Separation agreements and court orders set out each party’s specific obligation relating to such expenses. For example, is there a general provision requiring parents to share such expenses as they arise, or is there a set monthly amount that each party must contribute to each specific expense? Is there a retroactive amount to reimburse one party for expenses that he or she made in the past without contribution from the other parent?
The current pandemic has changed almost every aspect of families’ daily life. With the changes to children’s routines and activities have come changes to their expenses. Licenced daycare and afterschool programs are closed. Sports have been cancelled. Universities have closed their dorms and are finishing the year through distance learning. Even dentist and orthodontist appointments are on hold.
Many parents are wondering whether they must continue to contribute to section 7 expenses in this time of uncertainty. Even if their income has not changed, it’s likely the expenses have. As Danika advised last week, if communication with the other party is possible, it is a good time to reach out and try to work out a resolution. If an expenses is not longer being paid, it may be reasonable to suspend the expense until circumstances change.
There are, however, certain situations where it could be expected that a party would continue to contribute to a section 7 expense. Some expenses continue despite the service being suspended, for example a monthly payment plan for orthodontics. Some unlicensed childcare providers have also continued to require payment from families, despite being unable to offer the service. Sometimes, a parent paid in advance for a full year of registration and may not receive a refund. In those cases, a continued contribution from the other parent may be entirely reasonable. Additionally, in cases where a set monthly contribution to section 7 expenses includes a retroactive component for expenses the recipient incurred in the past, the contribution should likely continue.
If a court order requires a specific monthly contribution to section 7 expenses, and the order is enforced by the Maintenance Enforcement Program, parties have the additional concern of whether MEP will use enforcement measures to collect this contribution. As Danika stated in her blog last week, MEP is continuing to enforce court orders during the pandemic but will use its discretion in cases where flexibility is warranted. It is therefore wise to advise MEP of any changes not only in the incomes of the parties but also the expenses of the children.
As the courts are not available at this time to consider variation applications, they will be asked in the future to determine whether a party’s actions during the pandemic were reasonable. This applies to parenting decisions, changes to child or spousal support, and also to the payment of section 7 expenses. If decisions were unreasonable, court will have the ability to make retroactive adjustments to the parties’ support obligations.
The circumstances in every family are unique, so we encourage readers to consult their separation agreement or court order, and/or speak to their lawyer. Anyone wishing to speak to obtain legal advice can contact MDW Law at firstname.lastname@example.org to arrange a consultation.