Child Support: The Supreme Court Of Canada's Guide To Retroactive Adjustments & The Forgiveness Of Arrears

• Published date: 28 June 2021
• Subject Matter: Family and Matrimonial, Family Law, Divorce
• Law Firm: Watson Goepel LLP
• Author: Mr Laurence S. Klass and Lindsay Morgan

In a recent decision, Colucci v Colucci, 2021 SCC 24 ("Colucci"), the Supreme Court of Canada ("SCC") clarified the appropriate framework for applications made under s. 17 of the federal Divorce Act. Under this section, parties can apply to the court for a retroactive adjustment to child support, or for the cancellation of unpaid child support based on a current and ongoing inability to pay.

Colucci focuses on the importance of financial disclosure and how that ties in with the child's entitlement to appropriate support, together with the interests of certainty and flexibility in support payments.

This blog provides a brief overview of the framework for these applications and sets out key takeaways for those who pay or receive child support.

Retroactive Adjustments to Child Support

Monthly child support is based on the payor's income. Income can fluctuate for a variety of reasons, and when the payor's income changes, so do their child support obligations. If the parents can't agree to a change in child support, either party can apply to the court for a retroactive increase or decrease in child support.

In all cases, the court must balance three key interests in a way that promotes appropriate child support and the timely disclosure of financial information. These interests are:

1. the child's entitlement to appropriate support corresponding with the payor's income
2. the child's and parents' interest in the certainty and predictability of payments
3. the need for flexibility to ensure a fair result in light of changing incomes.

Framework: Retroactive Decrease

The following framework applies where the payor seeks to retroactively reduce their child support payments based on a past material decrease to their income:

1. Material Change in Circumstances

The payor must establish a past change in circumstances. This requires the payor to prove a real and material decrease in income that is neither temporary nor voluntary.

2. Presumptive Date of Retroactivity

The presumptive date of retroactivity is the date the payor gave the recipient "effective notice" of the change in income, up to three years before a formal application is made.

• "Effective notice" requires the payor to clearly communicate their change in circumstances to the recipient and provide evidence of the change. The disclosure must be sufficient to allow the payee to meaningfully assess the situation.
• If no effective notice is given, child support should be varied to the date of formal notice (such as...