A huge problem without a clear answer: COVID-19 and support obligations

(Part 1 of 2)

How does the COVID-19 pandemic impact child and spousal support? Well, support is largely based on income but, of course, it depends on the circumstances. COVID-19 reminds us that no one can predict the future. The economy remains in a state of flux. The federal government’s COVID-19 Economic Response Plan continues to adapt its financial support programs. This uncertainty complicates support issues, particularly where trust between ex-partners is low and stress is high.

As I write this four months after the WHO declared a pandemic on March 11, 2020, we are at an awkward, uncertain stage where it is still difficult to distinguish between truly temporary versus more long-lasting changes.

Although the results will depend on the facts, I offer the following guidance to remind lawyers of some of the applicable principles. First, start with the test in the Divorce Act or applicable provincial/territorial legislation. Before the court can exercise its broad power to vary under s. 17(1) of the Divorce Act, as a threshold issue, the person seeking a variation must discharge their onus under s. 17(4) or 17(4.1):

(4) Before the court makes a variation order in respect of a child support order, the court shall satisfy itself that a change of circumstances as provided for in the applicable guidelines has occurred since the making of the child support order or the last variation order made in respect of that order.

(4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration.

The SCC has confirmed its earlier case law that described the change – in both the child and spousal support context – as a “material” one, meaning a change that “would likely have resulted in different terms” (L.M.P. v. L.S., 2011 SCC 64 (CanLII), at para. 29-30 & 32-33).

The spousal support case law has described the term “material” as having both a qualitative and quantitative connotation. On a qualitative level, the focus is on what was “actually contemplated” / “contemplated” or “taken into account” in the initial order or agreement. It is more useful to inquire whether the event (e.g. income reduction due to retirement) was taken into account. This is to be preferred over inquiring whether an event was “foreseeable” or “foreseen”.¹

Unless the order or agreement was made very recently, it would be difficult to argue that the pandemic was actually contemplated. Perhaps a dip in income was contemplated where the payor’s income fluctuated pre-pandemic. However, in most cases, the quantitative issue will be the sticking point, particularly in spousal support cases.

On a quantitative level, the spousal support case law has generally held that a material change must have some degree of continuity, and not merely be a temporary set of circumstances. In this regard, trivial, insignificant, or short-lived changes will not justify a variation. However, the sufficiency of the change must always be evaluated in light of the particular facts.²

In child support cases, the quantitative threshold should generally be lower. According to s. 14(a) of the Federal Child Support Guidelines, “where the amount of child support includes a determination made in accordance with the applicable table, any change in circumstances that would result in a different child support order or any provision thereof” “constitutes a change of circumstances that gives rise to the making of a variation order in respect of child support”. Section 14 is thus “critical” to whether the threshold test on a child support variation proceeding has been met. A change in the payor’s income or a change in the child’s primary residence satisfies the threshold test under s. 14(a).³ Child support that was not based on the table amount is dealt with in s. 14(b), which refers to “any change in the condition, means, needs or other circumstances of either spouse or of any child who is entitled to support”.

In addition, the court’s task in applying the income provisions of the Guidelines (ss. 15-20) is to determine current annual income, using the most up to date information available. (Lutz v. Lutz, 2014 SKQB 146 (CanLII), at para. 9). This is apparent from the often-ignored s. 2(3) of the Guidelines:

2.(3) Where, for the purposes of these Guidelines, any amount is determined on the basis of specified information, the most current information must be used.

Thus, although the court often uses last year’s tax return to determine income for the current year, the question of whether that is the correct approach turns on whether that is the best evidence of current income (para 10).

Only time will tell how these cases get resolved, but there are certainly ways to assist families during these difficult times. This article is the first of a two-part series. Read Part 2.

Vanessa Lam is a family law strategic advisor and research lawyer practicing in Ontario.