The formula from hell: A divorced dad uncovers a deliberate policy to drive separated parents farther apart

The Report, May 13, 2002, p. 52

By CANDIS MCLEAN

This says it all!" exulted Toronto geologist Alar Soever at last month's discovery of a 31-page document obtained under a Freedom of Information request. "It is a detailed financial analysis of the Federal Child Support Guidelines showing how impoverished the paying parent would be and the inherent inequities in the model."

Titled "Detailing the Components of the Canadian Child Support Formula, 1997 Edition," labelled draft #6 and dated November 15, 1996, what makes it so different from the guidelines which, pared down to nine pages, were eventually made public, is its level of detail, as well as an appendix of case examples. "This is the comprehensive explanation of the guidelines that Parliament and the Canadian public deserved at the time they were debating and passing this legislation in the fall of 1996," declares Mr. Soever (dadalar@aol.com).

Spokesmen for the Justice Department, however, deny that the document was suppressed, saying it was merely delayed while being fine-tuned for the public. 'We struggled mightily with the level of technicality and decided to cut it down to make it short and succinct. If we gave examples, it was too long," attests senior researcher Jim Sturrock, one of the developers of the guidelines. Senior council Lise Lafreniere Henrie adds that MPs had briefing notes while making their decision on the guidelines, but they were not public documents. "It was advice to the ministers, so it was confidential. However, we published a set of tables and in January 1995 we published an overview illustrated in a more simplistic way, so information was out there."

In the newly discovered draft, a theoretical case is given in which both parents live in Newfoundland, the two children live full-time with the custodial parent and each parent earns $25,000. Utilizing the formula, the document then indicates that the "after-tax, after [child-support] award" income for the custodial parent is $27,369, while the non-custodial parent's income is slashed to almost one-half that, at $14,489. Of the total expenditures on children, $4,435 is paid by the non-custodial parent, while only $2,825 is paid by the custodial parent. "This is without even considering any direct expenditures made by the non-custodial parent during his or her time with the children," points out Mr. Soever.

When the non-custodial parent earns $1,000 more (i.e., $26,000), while the income of the custodial parent remains unchanged at $25,000, the child-support award increases by $170 per year. The actual income of both parents rise: the custodial parent's to $27,539, the non-custodial parent's to $14,983, but while the non-custodial parent now pays $170 more of the children's expenses than before (at $4,605), the custodial parent actually pays $100 less than before. Of the $170 increase in child support, only $70 goes to "direct expenditures on the children," while $100 is directed to the "personal (for parent) disposable income."

So why is an apparent "spousal support" built into the child support in the new formula? Justice officials say it is simply mislabelled and should have been called "household income." Mr. Soever says. The fact that the larger proportion of the child-support award is going to the receiving parent is perhaps inevitable, but very few people grasp the concept, and that's because it was never made clear when it was passed that the formula was a simple household standard-of-living equalization formula. Even two years after the guidelines were passed, the Supreme Court of Canada still didn't seem to grasp it," he says, pointing to the April 27, 1999, judgment in Francis v. Baker.

"However, even though the guidelines have their own stated objectives, they have not displaced the .Divorce Act, which clearly dictates that maintenance of the children, rather than household equalization or spousal support, is the objective of child-support payments." According to Mr. Soever, "Either the justices didn't know the very basis of the guidelines was a household-equalization formula, or they have ruled that the manner in which the guidelines are constructed contravenes the Divorce Act."

Contends Mr. Soever, "In these case examples, the standard of living of the paying parent is already much lower than that of the receiver, despite using the guidelines' assumption that the household of the paying parent has only a single person and no direct expenditures on the children. In reality, one must remember that the children might be living with the paying parent up to 40% of the time and in that case, his or her direct expenditures on the children would only be marginally less than those of the receiving parent. Clearly being left with a disposable income half that of the receiving parent, the paying parent would not be in a position to provide a comparable standard of living for the children while they are with him.

"This November 1996 draft report with its case examples exposes the deficiencies in the child-support formula. Had it been published in the fall of 1996, as promised earlier, I do not believe the guidelines would have made it through Parliament in their present form. This, I believe, explains why the formula was not published in the fall of 1996.

"In all subsequent drafts, the detailed financial analysis and all the examples which exposed the true financial hardship inflicted by the Guidelines were deleted, so unless you do the detailed analysis yourself—which takes some time and knowledge—you cannot appreciate how it affects families and children. It took the Justice Department 18 months to remove the examples and financial analysis and edit this 31-page draft document down to nine pages which say far less about the nature of the Guidelines than the original. The fact that it has now been revealed that there was a comprehensive draft ready in November 1996 raises serious questions as to why the release of this document was delayed in an open and democratic society."