Pousette v. Janssen

Pousette v. Janssen

The court held that the claimant's GFI for FCSG purposes is the income reported in Box 5 of his W-2, including elective deferred retirement contributions (Thrift Savings Plan), danger pay, post differential and post allowance; because the claimant paid significantly lower effective US tax rates (approx. 10.4% to 16.4%) than the Canadian effective rates applicable to his converted income (approx. 28.2% to 47%), the court imputed additional income using the CGIENFI method and found a change in circumstances warranting retroactive variation; the claimant's conduct in failing to provide information and in financially benefiting while the child was disadvantaged was blameworthy and justified...

Citation
2021 BCSC 786
Parties
Claimant/payor Parent: Paul Patrick Pousette; Respondent/recipient Parent (applicant): Karen Lynn Janssen
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
16 April 2021
Procedural Posture
Child Support Variation (divorce Act/family Law Act) / Application for Retroactive Variation; Oral Reasons for Judgment Delivered April 16, 2021
Outcome
Application granted in part: variation warranted; retroactive child support and s.7 expenses ordered to 2011; claimant's GFI defined as Box 5 income including deferred retirement, danger pay, post differential and post allowance; additional income imputed to reflect Canadian tax equivalent.
Legal Topics
Federal Child Support Guidelines, Imputation of Income, Retroactive Child Support, Section 7 Expenses, Conversion of Foreign Income, Bundle of Services Analysis
Source Language
English
Family Law Child Support Taxation International/foreign Income Divorce Federal Child Support Guidelines Imputation of Income Retroactive Child Support +3 more

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Parties

Paul Patrick Pousette

Claimant/payor Parent

Karen Lynn Janssen

Respondent/recipient Parent (applicant)

Procedural Posture

Child Support Variation (divorce Act/family Law Act) / Application for Retroactive Variation; Oral Reasons for Judgment Delivered April 16, 2021

Legal Issues

  1. 1 How to calculate a non-resident payor parent's total income for FCSG purposes when earnings are in foreign currency
  2. 2 Whether specific earnings (deferred retirement contributions, danger pay, post differential, post allowance) are includable in gross foreign income (GFI)
  3. 3 Whether differing effective tax rates warrant imputing additional income (CGIENFI)

Ratio Decidendi

The court held that the claimant's GFI for FCSG purposes is the income reported in Box 5 of his W-2, including elective deferred retirement contributions (Thrift Savings Plan), danger pay, post differential and post allowance; because the claimant paid significantly lower effective US tax rates (approx. 10.4% to 16.4%) than the Canadian effective rates applicable to his converted income (approx. 28.2% to 47%), the court imputed additional income using the CGIENFI method and found a change in circumstances warranting retroactive variation; the claimant's conduct in failing to provide information and in financially benefiting while the child was disadvantaged was blameworthy and justified...

Court Disposition

Application granted in part: variation warranted; retroactive child support and s.7 expenses ordered to 2011; claimant's GFI defined as Box 5 income including deferred retirement, danger pay, post differential and post allowance; additional income imputed to reflect Canadian tax equivalent.

Orders

  • The claimant's gross foreign income for FCSG purposes is the income shown in Box 5 of his W-2 and includes deferred Thrift Savings Plan amounts, danger pay, post differential and post allowance
  • Impute additional income using the CGIENFI method because US effective tax rates were significantly lower than Canadian rates; calculate retroactive child support and s.7 expenses back to 2011 (date claimant began US foreign service)