Factors To Consider When Determining Income And Apportioning Section 7 Expenses

• Published date: 20 July 2023
• Law Firm: Lindsay Kenney LLP
• Author: Emilie Ptak

When two parents separate, there is an obligation to make child support payments. Child support payments are calculated using the Federal Child Support Guidelines (the "Guidelines") and are determined based on each party's income and with which parent the child (or children) resides. Child support obligations also include special or extraordinary expenses, or Section 7 expenses, such as expenses arising from a child's medical or dental care, extra-curricular activities and post-secondary education. Since these expenses can fluctuate, each parent is ordered to pay a specified portion of the expenses as they arise. Depending on the financial circumstances of the parents and the financial requirements of the children of the relationship, Section 7 expenses can be significant.

In a recent Supreme Court of British Columbia decision, K.R. v J.R., 2022 BCSC 1856, the court ruled on how to determine the income of a parent who had multiple income sources, as well as how to apportion Section 7 expenses between parents.

In this case, two family physicians married in 1988 and had three children together. They then separated 25 years later in 2013, and were divorced in 2015. Among the issues in question was how to determine the wife's income for support purposes, and how to apportion Section 7 expenses among the parties. During the relationship, the parties integrated their medical practices and operated a family medicine clinic together. While they disagreed on why the wife became less involved in the clinic, both parties acknowledged the wife's income from her medical practice became less reliable and she also received income from her real estate investments. In consideration of the wife's reduced employment income, the husband argued that his former spouse was intentionally underemployed. On the contrary, the wife took that position that there were limited suitable employment opportunities in the medical field available to her.

At the time of the decision, all of the three children were adults at various stages of their medical training. Two of the three children were attending medical school or completing residency outside of Canada. At the time of trial, the collective post-secondary expenses for all three children was in the range of $2,000,000. During the relationship, the parties agreed that the children should attend the best schools. Both parties had made some contribution to their children's tuition and other post-secondary expenses, such as accommodation...