Why Lump Sum Child Support is a Really Dumb Idea - For Everyone!

Writing a lump sum child support cheque

When couples separate, they often want a “clean break”, meaning they want as little to do with each other as possible so that they start new lives. That is often a good idea.  It is a common, important, and good reason why, when spousal support is payable (listen to this podcast or watch this video to find out if it is), couples opt for a single “lump sum payment” instead of on-going monthly payments.   However, child support is very different from spousal support in a number of ways.  Lump sun child support payments, or the transfer of an asset, such as house, in satisfaction of all future child support is not a good idea - for anyone involved.  Ontario’s Family Law Act allows lump sum child support payments, but really discourages judges from ordering such payments.   When child support is payable, separated couples cannot achieve a complete clean-break because both parents should continue to have some involvement in the children’s lives.  In addition, lump sum child support is dangerous for the paying parent, the receiving parent and especially the children.

Parent repeatedly paying child support

In Ontario, since 1997, judges have to order child support that is in accordance with the Child Support Guidelines (even if the parents agree otherwise), unless the parents have agreed on arrangements that benefit the children as much as the monthly table support payments and section 7 payments pursuant to the Child Support Guidelines AND it would be somehow unfair to order those "usual payments."  You can see those provisions at sections 33(10) and 33(12) of the Family Law Act.  Judges very, very rarely deviate from strictly following the Child Support Guidelines.

One situation that clearly results in an unfair situation, that does not benefit the children, is where the parent with custody forgoes child support in exchange for receiving the family home. Again, that can be a good solution for dealing with spousal support, but does not work well for child support.  The parent receiving child support may need the child support to sustain the mortgage on the house. Without the child support, or because of other factors, that parent can lose the house that he gave up child support to keep.  However, the children suffer even more because they lose their home and they do not share in the economic security and stability of the parent who otherwise would be paying child support.   Both the law, and judges, support changing the child support terms in such situations.  That child support can be easily changed is why making an agreement for a lump sum child support payment, or the transfer of assets in exchange for future child support, is a very dumb idea for child support payers.  Those support payers can end up having to pay periodic support again in addition to the lump sum payment that was supposed to end their child support obligations.

Section 14 of the Child Support Guidelines states that any change in circumstances that would change the amount of child support by any amount justifies a court making an order to change the amount of support.  Sections 25 and 25.1 of the Child Support Guidelines require support payers to provide income information every year.  The combined effect of those provisions is that Child Support can be changed every year.  On top of that, section 14 of the Child Support Guidelines also provides that changes in circumstances of the children also justify a change in child support - that could include the children being at risk of losing their home.

On any request to change child support, section 37(2.3) of the Family Law Act
says the judge must again order Child Support in accordance with the Child Support Guidelines, unless the existing order or written agreement benefits the children as much as the "usual" child support arrangements and ordering the usual child support would somehow be unfair.   Again, judges rarely do this.

In situations where the parent who should have been receiving support could not make ends meet without on-going support, or even where that parent recklessly squandered that money, the lump sum child support payments turn out to be a really bad idea for child support payers.  The parent who got the lump sum payment can ask for the other parents’s income information, and if her income had changed at all (which almost always happens), then the support recipient can bring  a motion to change child support.  This video explains how to bring motions to change support.   Once that motion was before the court, the judge would be hard pressed not to order child support, perhaps even table child support, in light of the children’s circumstances.  After all, child support is for the children and to meet their needs.  Judges do not want to see children suffer because their parents made a bad deal.  That variation of support works well for the children who are suffering financially, but not so well for a parent who thought that that she had “pre-paid” all of her child support obligations.

A parent who paid lump sum support does not have to worry forever that his ex or children will can come back for more child support.  In the case of Louie v. Lastman, the Ontario Court of Appeal said that child support claims can only be brought while the children are still dependent children.  So, when the children are all  adults who are finished school, neither they, nor the ex-spouse, are not in a position to seek child support, or even retroactive child support anymore (unless the child is unable to become independent because of disability or illness).

If you are still a dependent child (and children can continue to be entitled to child support past age 18), or the parent of a dependent child, then watch this video and listen to this podcast on how the amount of child support is determined under the Child Support Guidelines.

There is also a lot more on child support, retroactive child support, and how to change support orders in this $20-easy-to-understand book on Ontario Family Law.  That book, which has excellent reviews, also discusses most other family law issues.  

Nothing is better than speaking to a good family law lawyer (especially a lawyer who is a Certified Specialist) about difficult issues such as this one.  There may be particular facts in any case that make a big difference and only an in-person consultation with a lawyer will let you know what your rights and options are.  To meet with top Toronto Family Law and Divorce Lawyer, John Schuman,  please call 416-446-5847, email us, or use the form below.  As you can see from the post above, family law mistakes can be costly and meeting with a good family law lawyer can protect you form making such mistakes. 

Guide to the Basic of Ontario Family Law (Book)

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Guide to the Basics of Ontario Family Law Available on Kindle

Lillian LaRosa - Attorney at LaRosa/Toland Law Offices

I had one case some years ago where the child was already in college so the Court was ok with a lump sum for support in that situation. My client really wanted this outcome although I was not really sure that this was going to be approved by the Court and I would tend to doubt that this would work in Massachusetts for a child not close to the child support obligation finish line. Of course paying a lump sum could go both ways if there are changed circumstances - all in all it’s not a good idea.


© John P. Schuman 2014