GOVERNMENT ANNOUNCES NEW CHILD SUPPORT STRATEGY

OTTAWA, March 6, 1996 -- Today the Government of Canada, through the work of four departments, outlined the government's child support strategy.

"Children's needs are at the heart of this strategy", said Minister of Justice and Attorney General of Canada, Allan Rock. "Child support is the first obligation of parents and I believe these measures meet the realities of families in the 1990s. I am confident the components outlined in this package protect the interests of children and ensure parents live up to their responsibilities for child support payments in a manner that is fair and consistent."

"We heard from Canadians that they wanted a comprehensive child support strategy", said Secretary of State for the Status of Women, Dr. Hedy Fry. "The government has worked hard to take everyone's concerns into account. I believe this package is a step in the right direction".

The four pillars of the strategy are:

Taxation:

The Income Tax Act will be amended to eliminate both the requirement to include child support in the custodial parent's taxable income and the deduction available to payers of child support. The new tax rules will apply to agreements or court orders made on or after May 1, 1997. The new tax rules do not apply to child support awards made before May 1, 1997 unless:

the parties change their written agreement or court order after April 30, 1997 to change the amount of child support; or

the order or agreement specifically provides that the new tax rules will apply after a specific date (which cannot be earlier than May 1, 1997); or

the parties both sign and file a form with Revenue Canada agreeing that the new tax rules will apply after a specific date (which cannot be earlier than May 1, 1997).

The Divorce Act will be amended to introduce Guidelines that will establish fairer and more consistent child support payments. The Guidelines, which take into account the tax changes, have three main parts:

child support payment schedules for each province and territory that show the basic amount of support to be paid by the support-paying parent according to the number of children and income of that parent;

four types of special expenses for children that can be added on to the Schedule amount;

rules to alter the amounts of these payments in rare cases of undue hardship.

The new tax rules do not take effect until May 1, 1997 to allow time to enact federal child support guidelines, which are also expected to come into effect on the same date. This will allow time to prepare for an expected increase in applications to change existing orders to conform to the new child support rules.

Enforcement:

The federal government will strengthen enforcement procedures to help provincial and territorial enforcement agencies ensure that family support obligations are respected. The federal measures will include:

the suspension of certain federal licenses, including, passports and various licenses issued by Transport Canada, in cases of persistent default;

the addition of Revenue Canada to the list of departments whose databanks can be searched to locate defaulters;

expanding access to federal pension benefits to satisfy support arrears;

improvements to computer systems to permit on-line computer access between federal, provincial and territorial enforcement services; and

a public awareness campaign designed to improve societal attitudes toward support obligations;

Over the next two years, the maximum annual level of the Working Income Supplement will be doubled as child support reforms are implemented. The Working Income Supplement was designed to help low-income parents meet the extra costs related to their participation in the work force.

The maximum annual level of the Working Income Supplement of the Child Tax Benefit will be increased from $500 to $750 in July 1997, and to $1,000 in July 1998.

To improve the living standards of lower-income families, the doubling of the WIS is now being introduced with the reallocation of funds from other government spending. The revenue gains from the new tax rules will not be realized for some time, but as they are realized they will be used to fund the doubling of the Working Income Supplement.

Implementation

The federal government will provide financial assistance to the provinces/territories to help implement the Guidelines and enforcement measures of this strategy.

An advisory committee composed of individuals with various perspectives will be set up to assist the Department of Justice in monitoring the Guidelines and examining new ways to make the divorce process more efficient.

For further information on child support, please call 1-800-343-8282.

Ref.:      Jennifer Lang
           Minister Rock's office
           (613) 992-4621

(See also in Publications)