Understanding “special and extraordinary expenses” under family law in Canada
A large and often painful part of separation and divorce is financial, and if you have children, that includes determining the financial responsibilities of each parent involved.
Section 7 expenses are a crucial part of the process and ensure that the best interests of any children are considered fairly and adequately between parents.
Section 7 expenses in Canadian family law refer to the additional costs associated with raising a child after separation or divorce. These expenses are considered "special and extraordinary" and are typically beyond the basic child support amounts covered in the federal Child Support Guidelines. Understanding how to calculate and share these expenses is crucial for anyone drafting up a separation agreement or navigating the financial complexities of co-parenting.
Many factors can shift what is considered a Section 7 expense, so it will depend on your situation and your child(ren)’s needs. If you aren’t sure about what counts as this type of expense in your situation, a lawyer or mediator can help and advise you.
Deciding what counts as a Section 7 expense
In a nutshell, Section 7 expenses are costs that go beyond the essentials and are often tied to your child's specific needs and circumstances. These types of expenses are considered “special or extraordinary” and must be both reasonable (both parents can afford it) and necessary for the child’s best interests. Section 7 expenses are also considered part of the necessary costs that help ensure a child’s well being.
A lawyer is the best person to advise you on what types of child-related expenses are covered under Section 7 in your own situation, but some common examples include:
child care or daycare needed while one or both parents are working
medical, dental, and other health-related expenses
educational costs beyond basic school fees
Costs that are not typically considered as Section 7 expenses can include:
non-necessities (non-essential or luxury items not associated with the child's upbringing)
personal expenses (expenses not directly related to the child's well-being such as personal entertainment or leisure activities)
unilateral decisions (when one parent unilaterally incurs an expense without consulting the other parent or without it being deemed necessary for the child's well-being)
some discretionary educational costs
It’s critical that parents understand the discretionary nature of these expenses, which allows them to tailor their separation and divorce agreements to their unique circumstances. It’s also really important that you take time to clearly document and define these expenses in your separation or divorce agreement to avoid future conflicts with your co-parent.
Deciding who pays for Section 7 expenses
The responsibility for paying Section 7 expenses in a separation or divorce is typically shared between both parents. Generally, these expenses are usually shared in proportion to each parent's income, as determined by the Child Support Guidelines. The idea is to distribute the financial responsibility in a way that reflects each parent's ability to contribute.
As with any other aspect of a separation and divorce agreement, it goes without saying that open, proactive dialogue and transparent communication can help parents reach agreements on sharing these costs in a fair and reasonable manner which helps ensure the best outcomes for their children.
Calculating Section 7 expenses
You can follow the steps for calculating Section 7 expenses as outlined in the Child Support Guidelines, and keep in mind these steps are linked to various federal and provincial family laws.
My Support Calculator also offers some insights into sharing the costs of special expenses and has its own comprehensive guide on how to determine each parent's responsibility for Section 7 expenses, taking into account each parent’s respective incomes and the child support amounts already in place.
In each case, the formula involves determining each parent's proportionate share of Section 7 expenses. The specific steps may vary, and consulting legal professionals is advisable.
It’s also worth noting that while the general principle is a shared responsibility, the specific details of how Section 7 expenses are divided may vary based on the complexity of the parents' agreements or any court decisions.
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