“Even though an original RRSP contribution or deduction does not reduce the payor’s income for child support purposes, when RRSP monies are withdrawn in a later year they are included in Line 150 by operation of CSG section 16, and presumptively form part of the payor’s income for child support purposes: Fraser v. Fraser, 2013 ONCA 715 (CanLII), [2013] O.J. No. 5347 (Ont. C.A.) at para. 97. There is some flexibility, however, and if the court is of the opinion that including the RRSP withdrawals would not be the fairest determination of the parent’s income, it can apply CSG section 17 as set out above and determine a different amount that is fair and reasonable: see Ludmer v. Ludmer, 2014 ONCA 827 at para. 23. This is a discretionary exercise: Ludmer at para. 23; Liu v. Huang, 2020 ONCA 450 at para. 30.
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Ludmer v. Ludmer is the leading decision regarding whether withdrawn RRSP monies used to pay for legal fees should be excluded from Line 150 income for child support purposes. In that case the issues included both child support (in a shared parenting plan) and spousal support. Both party’s incomes were therefore relevant. Each parent in that case had taken out sizeable amounts from their RRSPs, although the mother took out substantially more. If both sums were included in income for support calculations, that would have favored the father in calculating the set-off or CSG section 9 child support. The trial judge excluded both. The Court of Appeal agreed, noting that the mother per her Financial Statement had used her proceeds “primarily” to fund the litigation, not to enhance her lifestyle (para. 24). The parties there had “engaged in scorched-earth litigation warfare”, explaining the high fees.”