WestlawNext Canada insight Blog

Epstein’s This Week in Family Law | RRSP Income

RRSP income not included in father’s annual income for child support calculation purposes in recent Saskatchewan Queen Bench decision

Epstein’s This Week in Family Law

Philip Epstein

Are RRSP Proceeds Income for Child Support Purposes?

Lisko v. Lisko, 2016 CarswellSask 105 (Sask. Q.B.) - Rothery J. The Ontario Court of Appeal decision in Fraser v. Fraser, 40 R.F.L. (7th) 311 (Ont. C.A.) supports the proposition that RRSP withdrawals must be included in calculating annual income for the purposes of paying child support under the Guidelines. I expressed my serious reservations about Fraser at the time of its decision. It seems to me that including RRSP withdrawals is not a fair way of determining a party’s income for the purposes of child support. This is particularly so because when the RRSP holder earned the income, out of which the payor purchased an RRSP, the payor’s income was included for child support purposes.

The Court of Appeal in Ontario included the RRSP withdrawals because under their analysis, the Guidelines required it. However, that Court of Appeal also acknowledged that the facts of a particular case could, in theory, reach the threshold of unfairness. In this case, the mother attempts to include almost $20,000 of RRSP income in the income of the father for support purposes. The father used the RRSP income to pay legal fees, pay down debt and put a down payment on the purchase of a home and purchase appliances for the home. As the Court notes, the father used the money to outfit a home for him and the two children when they were in his care and also used the RRSP funds to generate rental income which was included in his annual income for child support purposes. Justice Rothery finds that including the RRSP income and the father’s income would not be the fairest determination of his income as, in the Court’s view, the father has utilized a capital asset from the division of family property to provide a home for his children.

I think that this is a more satisfactory result and I have always thought that including RRSP income in a child support calculation is a disguised form of double-dipping. The courts across Canada are inconsistent on this issue, but at least all agree that there is no absolute hard and fast rule and each case must turn on its particular facts.

View the Complete Sample Newsletter
© Copyright Westlaw Canada, Thomson Reuters Canada Limited. All rights reserved.