Understanding Section 18 of the Child Support Guidelines in British Columbia
In British Columbia, the Federal Child Support Guidelines play a crucial role in determining income for child support purposes, especially when dealing with income held within a corporation controlled by a party. Section 18 of these guidelines is particularly significant as it allows for adjustments to a party’s income to include amounts retained in a corporation that the party controls. This ensures that child support calculations reflect the true financial resources available, preventing manipulation through corporate structures.
Key Aspects of Section 18
Control and Income Adjustment: Section 18 focuses on the degree of control a party has over a corporation. It allows the court to adjust income calculations to include retained earnings that should be considered part of the controlling party’s personal income.
Burden of Proof: Initially, the party seeking an income adjustment must demonstrate that the retained earnings should be included. Subsequently, the burden may shift to the other party to justify why certain corporate expenses should not be included.
Legitimate Business Expenses: The legitimacy of business expenses claimed by the corporation is scrutinized. The opposing party must prove that these expenses are necessary and should not be considered available for personal use.
Practical Implications
Ensuring Fairness: Section 18 ensures that child support obligations are based on a party’s true financial capacity, preventing underreporting of income by retaining earnings within a corporation.
Legal Strategy: Lawyers must be skilled in analyzing corporate financial statements and understanding the nuances of control and income distribution within corporations. This expertise is crucial when representing clients involved in child support cases.
Balancing Interests: The guidelines highlight the importance of balancing accurate income assessment with the recognition of legitimate business expenses, ensuring fair and equitable child support determinations.
In conclusion, Section 18 of the Federal Child Support Guidelines is essential for ensuring that child support calculations accurately reflect the financial resources available to the parties involved. This provision helps maintain fairness and transparency in family law proceedings.
Cases to Note
