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  • Writer's pictureJared Davies, Lawyer

Averaging income pursuant to Welch v Welch, 2023 ONSC 6550

Introduction


The case of Welch v Welch, 2023 ONSC 6550 provides valuable insights into the complexities surrounding child support and the determination of income. This blog post focuses on a crucial legal issue within the case: the averaging of income pursuant to section 17 of the Child Support Guidelines.


The parties, married in 2008 and divorced in 2016, have two children. The final order granted sole parenting time to the mother. The recent motion, initiated by the mother in 2022, seeks to modify child support based on the Guidelines, accounting for changes in income. This blog post focuses on the mother’s income:


10 The mother’s income for the last four taxation years was:


a. 2019 – $55,176.00


b. 2020 - $69,842.00


c. 2021 - $114,904.00


d. 2022 – $134,992.00


Legal Issues


The mother, a nurse practitioner, proposed an income averaging approach for section 7 expenses, relying on section 17 of the Child Support Guidelines. This section allows the court to consider a spouse's income over the last three years for a fair determination. Her income in 2022 was significantly higher than years previous. As such, she seeks to average her income.


Legal Analysis


The court grapples with the mother's proposal to average her income for 2020, 2021, and 2022. While the Guidelines typically favour the most recent past to predict the near future, the court acknowledges the permissibility of averaging when it results in a fair determination of income:


8 If the court is of the opinion that the determination of a spouse’s annual income under s.16 would not be the fairest determination of that income, s.17 states that the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.


a. Section 17 does not mandate income-averaging.


b. The Guidelines rely upon the more recent past to predict the near future and do not adopt averaging as a default methodology.


c. However, averaging is permitted when it results in a fair determination of income.


d. The language in s.17 is permissive, not mandatory.


(Mason v. Mason, 2016 ONCA 725; Lesko v Lesko 2021 ONCA 369 (ON CA)).


9 There is no obligation to use the most current year’s income where there is reason to think it is anomalous.


(Dreesen v. Dreesen 2021 ONCA 557 (ON CA)).


In this case, the mother argued that her 2022 income was an anomaly due to the circumstances created by the ongoing litigation, including extra work hours and a second job:


12 The mother proposes that a three-year-averaging be applied because 2022 was an anomaly.

a. She had to seek out extra work (including a second job) to address financial strains created by this litigation (which the father has needlessly protracted); the father’s lack of ongoing support; and indeed the above average level of expense she has incurred as a result of the father’s below-average amount of involvement in the children’s lives.

b. With this court case finally ending, she doesn’t anticipate she will need to work the second job (or have the energy to do it).

c. The mother’s extra work hours were not sustainable.

d. Once the father starts paying appropriate ongoing support (and the significant arrears), the mother will be able to return to more normal and manageable full-time employment.


The court considered the fairness of allowing the unusually high income for 2022 to dominate the section 7 expense analysis. Acknowledging the mother's unsustainable work hours and financial strain, the court deemed it unfair to let the father rely on her 2022 income for a reduced share of section 7 expenses.


Conclusion


The court accepted the mother's argument, deeming her income for the purpose of the section 7 analysis to be an average of her previous three years. The final order, adjusting child support based on the modified incomes of both parents, stands as a testament to the court's commitment to fairness and equity in child support matters.


The Welch v Welch case serves as a reminder of the nuanced considerations in family law, illustrating the importance of flexibility in income determination to achieve just and reasonable outcomes.

Comments


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