Can Veterans Affairs Disability Pension Payments be Excluded from Child Support Calculations?

Veterans-Affairs-Disability-Pension-payments-be-excluded-from-child-support-calculationsA common issue that often arises in family law proceedings in Ontario is whether Veterans Affairs disability pension payments are considered income for child support and spousal support purposes. Previously, I wrote about this issue and found that over the past fifteen years, there has been a shift and for the most part, these disability pension payments are considered income.

The purpose of this article is to show that there are situations where this income is excluded from calculations for support purposes. Keep in mind that every case is unique and the summary of an Ontario Superior Court decision that excluded these payments highlights the importance of ensuring the proper evidence is before the court.

Veterans Affairs Disability Pensions

To start, we must consider the nature of the Veterans Affairs disability pensions. Depending on the nature of the award, these pensions are primarily administered under either the Pension Act or the Veterans Well-being Act. Veterans Affairs describes these pensions as a tax-free, monthly financial payment to support the well-being of the veteran. Depending on the nature of the disability, these pension payments can be significant from a financial perspective.

Characterization of Disability Pension Payments

It is worth noting here that after a class action decision made by the Federal Court, there was a line of cases that supported the notion that disability pension payments were property and not income and therefore excluded when determining income for support purposes. Over the years after that decision, courts started to change this approach and started to consider these payments as income and not property. The result is that the payments were included in the calculation for support purposes.

In 2017, the Alberta Court of Appeal in a case called Rooker, determined that the Federal Court case decided in the context of a class-action could not be used as authority that these pensions were property and not income. Rather, the Alberta Court of Appeal determined that the proper approach to this question was to consider the money in the context of the relevant family law legislation, either the Divorce Act or the provincial equivalent.

This Rooker decision was appealed to the Supreme Court of Canada, who did not grant leave to hear the appeal. The result is that this has informed subsequent courts of the nature of this money.

Ontario Courts characterize Veterans Affairs disability pensions as income to be considered for child support and spousal support payments

Veterans-Affairs-Disability-Pension-payments-be-excluded-from-child-support-calculationsIn 2018, Justice Trousadale of the Ontario Superior Court of Justice issued a decision in Hewitt. In this decision, the Court conducted a detailed analysis of the law as it relates to the inclusion of disability benefits in determining income for support purposes. After reviewing the law, the Court concluded that the lump sum benefit the father received in this case ought to be included in his income for the purpose of calculating child support.

In this case, the father received lump sum payments under section 45 of the Canadian Forces Members and Veterans Re-establishment and Compensation Act, for his disability incurred as a result of his service with the Canadian Armed Forces. The lump sum payments totaled approximately $343,000.

To determine the amount of income to be included each year for child support purposes, the Court considered that the life expectancy of an average male in Ontario of 79 years. The Court then took the total lump sum payment and divided it by the number of years the father was expected to live. The result of this calculation was then added to the father’s annual income, grossed up as it was non-taxable.

Can Disability Awards be excluded from income for support purposes?

Last year, Justice Corthorn of the Ontario Superior Court of Justice was faced with a similar decision as was just discussed. In the Blaskavitch case, the mother was a veteran and had received $152,000 as a lump sum payment for a disability she suffered as a member of the Canadian Armed Forces. The father asked that this lump sum payment be included in the mother’s income when determining her child support obligation, in the same manner that the Court included it in the Hewitt decision.

The Court in this case excluded the lump sum disability award from the mother’s income for child support purposes. The reason for this was that the father did not lead the same evidence that was before the Court in the Hewitt decision. Specifically, the father did not have any evidence related to the purpose of the lump sum awards, which was provided to the Court in Hewitt through excerpts from the Veterans Affairs public website.

In this instance, the Court did not take judicial notice of the evidence that was before the Court in Hewitt, and further, there was no evidence on precisely what the lump sum awards were issued for. The Court determined that it was open to the father to seek this evidence, either through a request to the mother, and if that failed, by looking at other legal options. These options included bringing a motion for disclosure or calling an individual from Veterans Affairs to testify. Without any of this evidence, the Court found that no conclusion could be drawn on the nature of these payments.

Is a Veterans Affairs disability pension characterized as income for support purposes in Ontario?

Veterans-Affairs-Disability-Pension-payments-be-excluded-from-child-support-calculationsBased on the current state of case law, it is very likely that any disability pension or lump sum award will be included as income when determining income for child support or spousal support purposes. The exception here is because of an evidence issue. However, evidence is the answer to any question. If you have the evidence to prove your case, then you have a better chance of success. If you do not have the evidence to prove your case, you may end up with a decision that differs from what you think the law requires, as was the case in this latest decision.

As with any issue, it is important that you speak with a lawyer about your specific circumstances. If you are looking to hire a lawyer to assist you with your case, contact Hearty Law for a consultation.

Posted in