“I note that the onus is on the payor-spouse to justify a deviation from the s. 16 method of determining income: see Fung v. Lin, 2001 CanLII 28193 (ON SC), [2001] O.J. No. 456 (S.C.).
The case law confirms that this issue is factually driven and determined by what is appropriate in the particular circumstances of the case.
In Fraser v. Fraser, 2013 ONCA 715, 40 R.F.L. (7th) 311, at para. 97, the Court of Appeal for Ontario, for instance, held that RRSP income is presumptively part of a spouse’s income for child support purposes, since RRSP income is included in “total income” on the T1 General form.
At paras. 103-104, J. Simmons J.A. notes as follows:
[103] The clear wording of the Guidelines includes RRSP withdrawals as income and no special exception for RRSP withdrawals has been provided in Schedule III. Although I would acknowledge the possibility that the facts of a particular equalization could in theory reach the threshold of unfairness, I have no evidence about the specifics of the equalization calculation that occurred in this case and cannot so conclude.
[104] Similarly, I do not consider the fact that the father may have used some or all of the RRSP on account of his house purchase as a factor creating unfairness in terms of characterizing the RRSP. Particularly in circumstances where he was not working, the father’s first obligation was to ensure that his children were properly supported. The fact that the father chose instead to buy a four-bedroom house should not deprive his children of an available source of child support.
In Ludmer v. Ludmer, 2014 ONCA 827, 52 R.F.L. (7th) 17, the Court of Appeal upheld the exclusion of RRSP withdrawals where, in the Court’s discretion, it was considered appropriate in the circumstances not to include them. In that case, the withdrawals were found to be “non-repeating encroachments on capital” that were used by the payor to fund the costly litigation and not to enhance the payor’s lifestyle: at para. 24.
In Kotyck v. Kotyck, 2017 ONSC 7261, the Court considered whether the $57,261 the payor received from the collapse of his United States 401(K), the equivalent to a Canadian RRSP, should be included in his income. The court noted that RRSP income is presumptively part of a parent’s income for child support purposes and no exception for withdrawals has been provided in Schedule III of the Guidelines. Justice Hood found that the payor had not demonstrated any unfairness in including the equivalent of the RRSP withdrawal in his income: at para. 9.
In Knight v. Frobel, 2018 ONSC 3651 (Ont. Div. Ct.), the Divisional Court upheld the trial judge’s decision to include a severance payment in the calculation of the payor’s income for a given year.
In MacDonald v. MacDonald, 1997 ABCA 409, 57 Alta. L.R. (3d) 195, the Court of Appeal overturned the trial judge’s decision when the trial judge found that bonuses, stock options and a severance package were property, rather than income. They said that a bonus is considered income for tax purposes and that if any bonus had previously been received by the payor, the Court would look upon it as income for purposes of calculating child support under the Guidelines: at para. 15. The Court of Appeal also found that a severance package was an acceleration of income and a direct income replacement, so it should be added to any other income the payor earns during the period, at para. 17.
In Molitor v. Andreou, [2005] O.J. No. 3815 (S.C.), Mr. Justice Clark found, at para. 7, that a payor does not have the right to forego readily available income to the prejudice of his or her child in terms of reduced support and the Court imputed income to the payor, when he made such a deferral. This Court, in that instance, also included in income for purposes of calculating child support, a one-time payment of USD $353,288, which was a payment settling a collusion claim: at para. 9.”