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Annual $50,000 Gift from Parents Imputed as Husband’s Income

In Horowitz v. Nightingale, the couple had been married for sixteen years and they had three children together. In calculating the husband’s annual “income” for support purposes, the Courts were required to determine if the total should include a regular gift of $50,000 he received each year from his parents and his RRSP withdrawals.

Annual $50,000 Gift

Presumptively, gifts are not considered income. However, Courts may consider whether the circumstances surrounding the particular gift are so unusual that they constitute an appropriate circumstance in which to impute income. The factors the Courts may consider are:

  • The regularity of the gifts;
  • The duration of their receipts;
  • Whether the gifts were part of the family’s income during cohabitation that entrenched a particular lifestyle;
  • The circumstances of the gifts that earmarked them as exceptional;
  • Whether the gifts do more than provide a basic standard of living;
  • The income generated by the gifts in proportion to the payor’s entire income;
  • Whether the gifts are paid to support an adult child through a crisis or period of disability; whether the gifts are likely to continue; and
  • The true purpose and nature of the gifts.

In this case, the Court imputed the annual $50,000 gift received from the husband’s parents in the husband’s income. The Court based this decision on the fact that the gifted sum of $50,000 was consistent; funded the family’s lifestyle; and were regularly given and likely to continue.

RRSP withdrawals

RRSP income is presumptively part of a spouse’s income for child support purposes since RRSP income is included as part of “total income” on the T1 General form. Nevertheless, the inclusion of RRSP proceeds in income is not mandatory and the Court has discretion in appropriate circumstances to decide otherwise.

The Court in this case decided that the majority of the husband’s RRSP withdrawals ought to be included in his income for support purposes as RRSP income is presumptively part of the calculation of income for child support under the Guidelines. However, the substantial withdrawal in 2014 is not to be considered as income as this would unfairly distort the husband’s actual income and such withdrawal was inconsistent with the quantum in all other RRSP withdrawals.

Horowitz v Nightingale, 2015 ONSC 190