What Are Section 7 Expenses?
You may have heard the term “Section 7 expenses” in relation to child support before, but do you understand what they are?
Many people believe that all expenses incurred for a child are shareable between the two parents, or that all “extra-curricular” expenses are necessarily s.7 expenses.
The Federal Child Support Guidelines state at s.7 that:
Special or extraordinary expenses
7 (1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:
[Note: this means that the court will look at the particular circumstances of the family to determine what is a shareable s.7 expense – the incomes of the parties, the types of expenses and activities the parents paid for prior to the relationship breakdown, the child’s best interests and whether the expenses are “necessary” and “reasonable” will all be relevant to whether an expense is a s.7 expense. This means that what is considered a s.7 expense for one family may not be for another family!]
(a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment;
[Note: this means that not ALL child care expenses are shareable if they are not incurred for the above-noted reasons.]
(b) that portion of the medical and dental insurance premiums attributable to the child;
[Note: this means that the ENTIRE premium is not shareable if the parent/parent’s new spouse is also included in the benefit premiums! Only the portion attributable to the child is shareable.]
(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;
(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;
(e) expenses for post-secondary education; and
(f) extraordinary expenses for extracurricular activities.
[Note that (d) and (f) have the term “extraordinary” in the definition. That means that not necessarily ALL of these expenses will be considered s.7 expenses. Expenses for primary or secondary school education or for any other educational program that meets the child’s needs AND expenses for extracurricular activities must be “extraordinary” to be a s.7 expense. So what is considered to be an “extraordinary” expense?!]
The Federal Child Support Guidelines define the term “extraordinary expenses” as follows:
(1.1) For the purposes of paragraphs (1)(d) and (f), the term extraordinary expenses means
(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or
(b) where paragraph (a) is not applicable, expenses that the court considers are extraordinary taking into account
(i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,
[Note: subsections (a) and (b) direct the court to consider the particular financial circumstances of the requesting party. Subsection (a) sets out that an expense is extraordinary if it exceeds what the requesting parent can reasonably cover, given their income and the amount of child support they receive. Subsection (b) sets out that, if the party can reasonably cover the expense, the court must still consider subsections (i) to (v) to determine if the expense is “extraordinary” in the circumstances.]
(ii) the nature and number of the educational programs and extracurricular activities,
[Note: this means that there may be a limit on the number and/or cost of activities that a parent can receive contribution from the other parent for. It also means that the court can look at the cumulative total of a child’s expenses to determine if the sum total qualifies as an “extraordinary expense.” For example, it may not be reasonable given the incomes of the parties to make a parent contribute to more than a few extra-curricular activities per child per year.]
(iii) any special needs and talents of the child or children,
[Note: this means the court will consider whether the children have special needs or special talents in determining whether the other parent should be required to contribute to the expense. For example, a child who needs tutoring due to a learning delay or music lessons for a particularly gifted child who may pursue music as a career.]
(iv) the overall cost of the programs and activities, and
(v) any other similar factor that the court considers relevant.
Clearly the determination of what is a s.7 expense is discretionary and based on the particular circumstances of the child and the family, both before and after the marriage breakdown.
Once you have determined what is a legitimate s.7 expense, how are these expenses shared? Typically, they are shared in proportion to incomes. For instance, if one party make $20,000 per year and the other makes $80,000, the expenses would be shared 20%/80%. If a child is old enough to contribute to their own expenses – for example, a child attending college who has a part-time job – the child’s contribution will be deducted and the parents will share the remainder.
The Court also has to take into account any “subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.”
[For more information, see the helpful paper by Sheila Gibb, “A Reasonable and Necessary Guide to Section 7: Clothing and cell phones and computers! Oh my!” (2016) 35 CFLQ 211.]