"Hybrid" parenting schedules and child support

"Hybrid" parenting schedules and child support

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This issue arises when the parties have multiple children, and the parenting plan/parenting schedule differ for some or all of the children.

For example, a "hybrid" scenario would present itself if the parties have 3 children; the parties are sharing the care of 2 children; and one parent has primary care of 1 child. 

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When confronted with a "hybrid" scenario, the caselaw provides that the court may apply the "two-stage" or "two-step" approach or the "economies of scale" approach when calculating child support. I will provide some excerpts form caselaw below which will describe the two different approaches.

 
In general, the "economies of scale" approach is preferred. 

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R.B. v. L.M.L., 2014 BCSC 134 (CanLII): 

[1]           The parties are the parents of three children: a boy, D, age 14; and two girls, M, now age 12, and C, now age 9. The parties divorced in March 2011 (the “2011 order”).

[11]        According to the claimant, the material change of circumstances justifying a variation of the residency provisions of the order is two-fold: D has primarily resided with the claimant since September 2011 and M primarily resided with the claimant from September 2011 to December 2012. [Emphasis added.]

[20]        There seems to be little doubt that D now chooses, for whatever reason, to live with his father. The provision in paragraph 1 of the 2011 order permits the claimant to apply for a prospective order respecting residency without first establishing a material change in circumstances.

[21]        D is now age 14. I see little point in attempting to impose a continuing shared residency regime on him if he does not accept that is in his best interests. Accordingly, I grant the application that D’s primary residence be with the claimant. The respondent shall have reasonable and generous access. As M has now reverted to alternating weeks with each party as set out in the 2011 order, there is no need to make any further order respecting her.

[37]        Section 9 of the Guidelines addresses shared custody and must still apply here as the parties share custody of M and C. The section lists the factors that the court must take into account in determining the amount of child support payable where a spouse exercises a right of access, or has physical custody of a child, for not less than 40 per cent of the time over the course of a year. The factors include the amounts set out in the tables for each of the spouses (s. 9(a)), the increased cost of shared custody arrangements (s. 9(b)) and the conditions, means, needs and circumstances of each spouse and any child for whom support is sought (s. 9(c)) [Emphasis added.]

[41]        As a result of the change in D’s primary residence, the claimant is no longer obligated to pay child support for D. The parties continue, however, to share custody of the other two children. In the result, the claimant is obligated to pay child support for only two of the children and the respondent is obligated to pay for all three. [Emphasis added.]

[42]        As a result, s. 8 of the Guidelines also applies. It reads: [Emphasis added.]

8.         Where each spouse has custody of one or more children, the amount of a child support order is the difference between the amount that each spouse would otherwise pay if a child support order were sought against each of the spouses.

The section assists in determining the table amounts for each spouse as required by s. 9(a). In Contino v. Leonelli-Contino, 2005 SCC 63, at paras. 41 and 49, the majority approved the set-off approach under s. 8 as a “useful starting point” in considering the amounts set out in the applicable tables for each spouse under s. 9(a). [Emphasis added.]

[43]        The claimant says that the combination of shared custody and principal residence is a “hybrid” parenting situation and that, as a result, I should apply the “economies of scale” approach in determining child support. This approach results in setting off the different orders that the circumstances engender.  [Emphasis added.]

[44]        The court has endorsed the “economies of scale” approach in similar circumstances in the past. In E.G.P. v. S.L.P., 2009 BCSC 1221, the court referred, with approval, to Sadkowski v. Harrison-Sadkowski, 2008 ONCJ 115, at paras. 19‑23:

19.      In Sadkowski, the parents had agreed that they would share custody of the two girls, 19 and 18 years old, on an alternating-week rotation, and that the mother would pay $185 per month in child support. The elder girl then chose to live permanently with her father. The father argued that there had been a material change in circumstances in that he had maintained the elder girl's primary residence since 2006. The issue was the appropriate method to calculate support.

20.      Mr. Sadkowski argued that he should receive the full amount of child support, based on the CSG, for the elder daughter. Therefore, the mother should be required to pay him in accordance with the CSG for one child and based on the mother's income. For the younger daughter, who split her time equally with both parents, the calculations would be for one child and then a set-off between the respective parents' incomes.

21.      Ms. Harrison-Sadkowski argued that the support should be based on setting off two children in the father's care against one child in her care.

22.      Zisman J. reviewed what she termed the father's proposed "two-stage approach" and the mother's suggested "economies of scale approach" and concluded that the approach contended for by the mother was to be preferred.  [Emphasis added.]

23.      I have concluded that I should employ a similar approach in this case. There are arguments that favour each of the plaintiff and the defendant, under the rubric of the factors set out for shared custody in s. 9(c) of the CSG: "the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought." However, the overall objectives of the CSG are "to establish fair levels of support for children from both parents upon marriage breakdown, in a predictable and consistent manner": Francis v. Baker, 1999 CanLII 659 (SCC), [1999] 3 S.C.R. 250, 50 R.F.L. (4th) 228 at para. 39.  [Emphasis added.]

[45]        Other cases adopting the “economies of scale” approach include Hilton v. Hilton, 2011 BCSC 206 and Johal v. Johal, 2013 BCSC 1592. In Johal, for example, one child lived with the respondent and three children were shared equally. [Emphasis added.]

[46]        I observe that all of these decisions reject the more rigid “two-stage” or “two-step” approach as inadequate. The two-step approach is discussed in Sadkowski at para. 11:  [Emphasis added.]

[T]he first step is to calculate the support for the child(ren) living full time with one parent as a sole custody calculation. The second step is to calculate the support for the child(ren) living in a shared custody situation. The  number of children living in the shared arrangement will be the same number of children used for the calculation (for example, if two children share their time equally with both parents, then the two-children table is used for the calculation). The amount that each parent would owe the other parent if they have full custody of the shared custody child(ren) will then be set-off against one another. The court would then consider the increased cost of shared custody and the conditions, means, needs and other circumstances of the parties and the children. Finally, the difference from this calculation is then added to the sole custody calculation from step one to produce the total amount owing to the parent with full custody.

The “economies of scale” approach differs. It recognizes the economies of having more than one child in a residence but retains the flexibility to examine the actual financial circumstances of both parties and all of the children (Sadkowski at para. 27). It also permits consideration of the factors set out in s. 9(b) and (c).  [Emphasis added.]

[47]        The starting point for the “economies of scale” approach, according to the claimant, is that he should pay the table amount for two children ($1,849) based on his current Guidelines income of $129,096, less the respondent’s table amount for three children ($809). The claimant contends that I should impute an income of $39,955 to the respondent for that purpose. This would result in a set-off amount of $1,040.

[48]        Even if I were to impute income as the claimant suggests, a simple set-off is not presumptive but only a starting point. This is because, in any given case, it may not adequately take into account the factors in s. 9(b) and (c).

[49]        As pointed out in Johal, at para. 37, s. 9(b) and (c) afford the court an additional discretion to order an amount that differs from the set-off. The evidence and submissions of the parties did not fully address these considerations, although there is some applicable evidence in the respective financial statements of the parties. I will return to this after I determine the respondent’s current Guidelines income and the appropriate set-off amount.  [Emphasis added.]

[55]        I am satisfied that the respondent’s plan is reasonable. Her educational plan is relatively short-term, offers a reasonable skill upgrade, and also takes into account that she might obtain another position at BC Hydro. All of that is in the best interests of the respondent and, ultimately, the children.

[56]        I am not persuaded that I should impute an income to the respondent that is greater than her actual earnings. I find that the respondent’s current Guidelines income is $17,480. With that in mind, I turn back to the set-off approach and its application here.

[57]        Using the set-off approach as the first step in the present circumstances requires calculating the claimant’s obligation to pay the table amount for two children ($1,849) based on his current Guidelines income of $129,096, less the respondent’s table amount for three children ($330) based on her current Guidelines income of $17,480. This results in a set-off of $1,519.

[58]        Section 9(b) requires me to also consider any increased costs of shared custody arrangements. In Contino, the majority also stated, at para. 41:

The set-off amount must therefore be followed by an examination of the continuing ability of the recipient parent to meet the needs of the child, especially in light of the fact that many costs are fixed. As mentioned by numerous commentators, this is a problem in many cases where there is a great discrepancy in the incomes of the parents. … It is also a problem in cases where one parent actually incurs a higher share of the costs than the other (taking responsibility for clothing or activities for instance).

As a result, s. 9(b) “recognizes that the total cost of raising children in shared custody situations may be greater than in situations where there is sole custody” (emphasis in original) and, as a result, all of the payor parent’s costs should be considered (para. 52). Generally, the court is required to examine the budgets and expenditures of both parents in addressing the needs of the children in order to determine whether the global costs have increased.

[59]        Neither party directly addressed any changes to their costs associated with shared custody under the 2011 order or as a result of the change in D’s residency. Both filed financial statements in July 2013. Both parties own a house and pay mortgages. It does not appear that there are any housing costs associated with D’s change in primary residence as the claimant deposed that it occurred, for the most part, before the 2011 order. The claimant’s overall monthly expenses are $11,700, including a mortgage expense of $1,688. The respondent’s monthly expenses are $4,424, including a mortgage expense of $1,110.

[60]        As to variable ongoing expenses relating to the children, the claimant spends $950 per month (about 8 per cent of his total expenses) and the respondent spends $308 per month (about 7 per cent of her total expenses). Given the disparity of incomes, however, the respondent contributes a disproportionate percentage of her income to the expenses relating to the children. It is not possible, on the limited evidence, to determine whether the global costs have in any way increased as a result of the change in D’s primary residence.

[61]        Section 9(c) relates to the conditions, means, needs and other circumstances of each spouse and of any child. As pointed out in Contino, at para. 54, not every dollar that a payor expends in the circumstances results in a dollar saved by the recipient and, as a result, in cases where there is a significant disparity in income between the parents, a reduction in basic child support may undermine the ability of the lower-income parent to make adequate provision for the child and also exacerbate the differences in standard of living between the two homes. Accordingly, also at para. 54:

… it is possible to presume, in the absence of evidence to the contrary, that the recipient parent’s fixed costs have remained unchanged and that his or her variable costs have been reduced only modestly by the increased access. Thus, when no evidence is adduced, the court should recognize the status quo regarding the recipient parent.  

It is appropriate to consider the ratio of income between the parties at this juncture in terms of their respective ability to absorb the total variable expenses relating to the children (para. 77).

[62]        By my calculation, the income ratio between the parties is 88:12. If the claimant were to pay 88 per cent of the total monthly variable child-related expenses of about $1,260, he would pay $1,109, rather than his actual expenditure of $950.

[63]        A comparison of the respective net worths of the parties might ordinarily be helpful but is not here. The respondent deposed to a net worth of about $588,000 and the claimant deposed that his net worth is about $508,000. In each case, most of the net worth stems from home and pension values.

[64]        The difficulty is that the claimant lives with a partner in respect of whom he claims to owe an unsecured debt of $137,500. I am unable to find any evidence with respect to this debt and am not willing to assume that it legitimately reduces the claimant’s net worth.

[70]        In all the circumstances, I am persuaded that the set-off approach yields the appropriate child support order in the circumstances. Taking all of the above into account, including the claimant’s obligation to pay the table amount for two children ($1,849) based on his current Guidelines income of $129,096, less the respondent’s table amount for three children ($330) based on her current Guidelines income of $17,480, the claimant shall pay, commencing February 1, 2014, and continuing on the 1st day of each month thereafter, child support of $1,500. There will also be a corresponding change to the parties’ contributions to special or extraordinary expenses to reflect the 88:12 ratio set out above.  [Emphasis added.]

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https://www.canlii.org/en/bc/bcsc/doc/2014/2014bcsc134/2014bcsc134.html