Factors to Consider When Determining Income and Apportioning Section 7 Expenses

Family Law

Factors to Consider When Determining Income and Apportioning Section 7 Expenses

Family Law

When two parents separate, there is an obligation to make child support payments. Child support payments are calculated using the Federal Child Support Guidelines (the “Guidelines”) and are determined based on each party’s income and with which parent the child (or children) resides. Child support obligations also include special or extraordinary expenses, or Section 7 expenses, such as expenses arising from a child’s medical or dental care, extra-curricular activities and post-secondary education. Since these expenses can fluctuate, each parent is ordered to pay a specified portion of the expenses as they arise. Depending on the financial circumstances of the parents and the financial requirements of the children of the relationship, Section 7 expenses can be significant. 

In a recent Supreme Court of British Columbia decision, K.R. v J.R., 2022 BCSC 1856, the court ruled on how to determine the income of a parent who had multiple income sources, as well as how to apportion Section 7 expenses between parents.

In this case, two family physicians married in 1988 and had three children together. They then separated 25 years later in 2013, and were divorced in 2015. Among the issues in question was how to determine the wife’s income for support purposes, and how to apportion Section 7 expenses among the parties. During the relationship, the parties integrated their medical practices and operated a family medicine clinic together. While they disagreed on why the wife became less involved in the clinic, both parties acknowledged the wife’s income from her medical practice became less reliable and she also received income from her real estate investments. In consideration of the wife’s reduced employment income, the husband argued that his former spouse was intentionally underemployed. On the contrary, the wife took that position that there were limited suitable employment opportunities in the medical field available to her. 

At the time of the decision, all of the three children were adults at various stages of their medical training. Two of the three children were attending medical school or completing residency outside of Canada. At the time of trial, the collective post-secondary expenses for all three children was in the range of $2,000,000. During the relationship, the parties agreed that the children should attend the best schools. Both parties had made some contribution to their children’s tuition and other post-secondary expenses, such as accommodation and airfare, in various ways. However, the husband had funded a larger portion of the expenses and sought for the wife to compensate him for the expenses she should have paid. The wife disputed some of the husband’s spending, claiming that not all of the expenses can be classified as Section 7 expenses.

Determination of Income

When determining the wife’s income, the court outlined the following approach:

Subject to adjustments pursuant to the succeeding sections, s.16 of the Guidelines provides that the income of a spouse is that shown under “total income” in their T1 General tax return, subject to the adjustments under Schedule III.

If s. 16 would not be the “fairest determination” of that income, s.17 permits a court to consider a spouse’s income over the last three years to arrive at an amount of support that is “fair and reasonable” in light of, among other things, the spouse’s receipt of a non-recurring amount, such as a capital gain, during that period.

In determining whether a spouse is intentionally underemployed, there is no need to prove an intentional evasion of support responsibilities. The court is simply concerned with whether the spouse is earning what they are capable of earning: Barker v. Barker, 2005 BCCA 177, at para. 19. The test for imputing income based on intentional underemployment “is one of reasonableness having regard to the parties’ capacity to earn income in light of their age, education, health, work history and work availability”: Marquez v. Zapiola, 2013 BCCA 433 at para. 37.

With respect to sudden increases in income, such as a capital gain from selling a property, the court referred to Mariangeli v. Mariangeli, (2003) 66 O.R. (3d) at para 30:

While the courts have differed in their approach when dealing with non-recurring income, the recurring theme is that the child of the marriage should benefit from a sudden increase in lifestyle and money available to the family.

In consideration of the above principles, the court imputed the wife’s yearly employment income as $300,000. This is based on what the wife should have been able to make as a doctor. The court also held that the wife’s capital gains from selling her real estate investments should be included in her income.

Allocation of Section 7 Expenses

In this case, the main Section 7 expenses at issue were expenses related to the children’s medical schooling. Although all the children were all over the age of majority at the time of the decision, their post-secondary studies posed a barrier to them being truly independent from their parents and withdrawing from their parents’ charge.

Where children are over the age of majority, section 3(2) of the Guidelines provide two ways to determine Section 7 obligations:

Under ss. (a) the table amounts of support for the income of the payor parent are used, plus any special or extraordinary expenses under s. 7.


If the court proceeds under this table approach, a payor parent who has an income over more than $150,000 faces a strong presumption in favour of the table amount for their income, which can only be departed from based on “clear and compelling” evidence: Metzner v. Metzner,2000 BCCA 474 at para. 30.


Under ss. (b), the court awards “the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child” [emphasis added]. The reasonable needs of the child include accommodation, food, clothing and other similar expenses, as well as actual post-secondary expenses (of the kind that would otherwise have been captured under s. 7): Wesemann v. Wesemann, (1999) 49 R.F.L. (4th) 435 (BCSC), at para. 21.


The choice of which subsection to proceed under is a matter of discretion, and is dependent on the particular circumstances: De Beck v. De Beck, 2012 BCCA 465. However, when an adult child is living away from home to attend school, s. 3(2)(b) will likely be appropriate: P.R.M. v. B.J.M.,2012 BCSC 1795 at para. 121, aff’d on other grounds: 2013 BCCA 327.

The court proceeded to use the approach under section 3(2)(b) of the Guidelines to apportion Section 7 expenses for the time the children resided with a parent and when the children resided away from home to attend school. The court held that there was no meaningful difference in the payments the husband was making when the children lived at home rather than at school, with the exception of saving accommodation costs when the children were residing at home.

In consideration of both parties’ high incomes and the expenses paid by the husband to the date of the decision, the court held that the wife was responsible for 50% of the Section 7 expenses retroactive to when the husband filed his Response to Family Claim in 2016, as well as any future Section 7 expenses. While the husband was seeking to recover retroactive payment beginning in 2013, the court refused to grant such an order as the husband had previously expressed a willingness to finance the children’s schooling regardless of the wife’s financial contribution. The husband’s 2016 Response to Family Claim was the first time he expressed a desire to recover a portion of his Section 7 expenses from the wife.

The point is that whatever formula is applied, the claimant’s income, based on the imputed earnings and capital gains I have identified, amply justifies a 50% share on her part of the child support, whether prospectively, retroactively or both.

As to “the financial ability of each spouse to contribute to” their support, I have found that in the case of both parents it is ample, and that the budget prepared and adhered to by the respondent is in keeping with the level of support that two very affluent professional parents would reasonably wish to provide.

Applying the criteria in D.B.S. , I am satisfied that it is appropriate to order that the claimant pay 50% of the expenses incurred by the respondent.

When considering hardship such an award can place on the parties, the court stated:

There would be no hardship to the claimant in making such an award, given the ample means I have identified and her willingness to spend more than $800,000 to advance the career prospects of two of the children in the U.S. The hardship to the respondent in failing to make an award, on the other hand, would be very substantial, given the burden that his financial sacrifices have placed on his working life.

As such, the wife was ordered to pay the husband 50% of his Section 7 expenses paid from 2016 onwards. The wife was only responsible for these expenses for each child until that child began residency or completed medical school. When a child was no longer a student in a demanding post-secondary program and transitioned to a paid trainee position, the parents’ child support obligations cease.

This case has implications for separated parents who will likely incur Section 7 expenses, particularly where the parents have high incomes or multiple income streams, or if the child has exorbitant Section 7 expenses (for example, attending a lengthy post-secondary program). It also has implications for the duration of child support obligations where children of the relationship are over the age of majority but have not yet withdrawn from the parents’ “charge”. 

For more information on section 7 expenses or for any family law matter, please contact any member of our Family Law Group.

Emilie Ptak
Lawyer | Family Law

This article is intended to be an overview of the law and is for informational purposes only. Readers are cautioned that this article does not constitute legal or professional advice and should not be relied on as such. Rather, readers should obtain specific legal advice in relation to the issues they are facing