Share This Article
Introduction
Child support is a fundamental legal and financial obligation in British Columbia, ensuring that children receive the support they are entitled to under the Family Law Act (FLA) and Federal Child Support Guidelines (FCSG). The courts prioritize the best interests of the child when determining how support should be paid.
While periodic monthly payments are the standard, courts may consider lump sum payments in certain circumstances. However, lump sum payments carry risks and may not always reflect the child’s evolving financial needs.
This article examines the legal framework, case law, financial implications, and enforcement considerations surrounding lump sum and periodic child support payments in British Columbia.
Legal Framework for Child Support in British Columbia
Child support obligations in British Columbia are governed by:
- The Federal Child Support Guidelines (FCSG) – Determines child support amounts based on the payor’s income and the number of children.
- The Family Law Act (FLA), Section 155(1) – Allows for child support recalculations if a payor’s income changes.
- The Divorce Act (for divorced parents) – Reinforces the principle that child support is the right of the child, not the parent.
In addition to basic child support, parents may also share special and extraordinary expenses (also known as section 7 expenses), which include:
- Childcare and daycare costs
- Medical treatments not covered by insurance
- Dental or orthodontic work
- Post-secondary education expenses
- Extracurricular activities such as sports, music lessons, or tutoring
When a payor’s income fluctuates, child support must be adjusted accordingly to ensure the child’s needs continue to be met.
Legal Basis for Lump Sum Child Support
Lump sum child support is recognized under Section 11 of the Federal Child Support Guidelines, which states: “The court may require in a child support order that the amount payable under the order be paid in periodic payments, in a lump sum, or in a lump sum and periodic payments.” However, courts prefer periodic payments, unless there are exceptional circumstances justifying a lump sum order.
When Courts May Order a Lump Sum Payment
Lump sum child support payments are not common and are typically considered in the following situations:
- Where the payor has a history of non-payment of child support payment or non-compliance with a court order or separation agreement, a lump sum may be ordered to guarantee financial stability for the child. The court has also awarded lump sum orders where the payor parent has not complied with the court orders and lives in a non-reciprocating jurisdiction: K.V.D.P. v. T.E., 2004 BCSC 537
- Where there is difficulty in enforcing regular payments such as where the payor moves frequently, works irregularly, or is self-employed, enforcing monthly payments may be difficult, making a lump sum preferable. The BC Supreme Court held that lump sum payments may be justified where enforcement of periodic payments is difficult or impossible: Mansoor v. Mansoor, 2012 BCSC 602
- Where there is high conflict between parents and hostility between the parents makes enforcing periodic payments difficult, a lump sum may help avoid ongoing legal disputes.
- Where there is finality in a child support matter, a court may order a lump sum payment to permanently settle financial obligations, particularly when the payor’s future income is unpredictable. The court ruled that a lump sum may be appropriate when there is a risk of future non-payment, especially when one party moves frequently or is financially unstable: Gallacher v. Friesen, 2014 BCSC 1575
- Where there is underemployment or lack of assets in British Columbia such as when the payor is intentionally underemployed or lacks assets in BC, a lump sum may secure financial support for the child.
Financial Implications of Lump Sum vs. Periodic Child Support
Lump sum child support payment will provide immediate financial security for the child while ensuring that there would be no future enforcement issues or needs should the financial situation of the payor change in the future or if the payor’s future income is uncertain. It also reduces ongoing disputes between parents and would be ideal in a situation where the parties are seeking a clean break. However, it must be in the best interest of the child.
On the contrary, lump sum child support payment does not allow for any adjustments in payment in changing circumstances. Unless the lump sum payment is properly invested, inflation or rises in the cost of living may subsequently render a lump sum payment inadequate. Also note that there is the potential for serious financial loss if the lump sum is not properly invested, such that the lump sum payment is insufficient to cover the child’s needs over time. Thus, lump sum payments may result in less support over time, unless carefully structured.
Enforcement of Lump Sum and Periodic Payments
If a parent fails to pay child support, enforcement may be pursued through:
1. Family Maintenance Enforcement Program (FMEP): The BC Family Maintenance Agencu may use enforcement mechanisms such as; garnishing wages & income, and seizing federal payments such as tax Refunds and EI Benefits. The agency could also go after the driver’s license suspension of the non-paying payor or place a lien on any property owner by the payor.
2. Court Action for Contempt: The courts may impose fines or jail time for deliberate non-payment. In Gallacher v. Friesen, 2014 BCSC 1575 the courts reaffirmed that intentional non-payment may result in serious legal penalties.
Risks of Accepting a Lump Sum Settlement
Indemnity Clauses and Future Claims
If a lump sum payment is accepted, the recipient parent may be required to indemnify the payor, meaning:
- The recipient cannot request additional support later
- The child may still have the right to claim support in the future
- Future financial hardship cannot be remedied through additional payments
While courts prioritize the child’s best interests, accepting a lump sum payment may limit future financial options.
Conclusion
While lump sum payments can provide certainty, they come with significant risks. Unless enforcement concerns exist, monthly child support payments that adjust over time remain the preferred option. Before agreeing to a lump sum payment, legal and financial advice should be sought to ensure the child’s best interests are protected. If you are facing a child support dispute, consulting with a family lawyer can help determine the best approach for your situation.
Arcstone Law Corporation is dedicated to assisting parents and guardians through the legal process of accessing and enforcing child support payments and orders. You can reach us by email at admin@arcstonelaw.com or schedule a consultation on our website. All legal services are provided by Arcstone, a law corporation.
