Separated families should plan ahead for post-secondary costs
Separated parents are likely to share the hefty price tag associated with a post-secondary education for their child, but, like most issues in family law, details of the arrangement would be determined on a case-by-case basis, says Oakville family lawyer and mediator Cathryn Paul.
Post-secondary education is a very large budget item for all families. Planning for this expense is more challenging when the parents are no longer together and do not necessarily have the same means and goals.
"Under the Child Support Guidelines, post-secondary expenses are considered special or extraordinary expenses and would be shared proportionate to the parties’ income,” Paul tells AdvocateDaily.com. “There is also an expectation that the child will make a reasonable contribution to the costs, but that depends on the specific circumstances. Whether a child has a well-paying job, or is receiving bursaries, grants or scholarships would all be taken into account."
The reasonableness of the expense in relation to the means of the parents and those of the child, as well as the family’s spending pattern prior to separation are considered, says Paul.
“It’s looked at in terms of the overall family income. What’s reasonable for people who are earning $40,000 a year will not be reasonable for others. People with low incomes are not expected to fully fund years of post-secondary education for the child because a lot of their income is used for their own food and housing,” she says.
One of the major principles that will be applied in such a circumstance is how the child would have been provided for if the family remained intact, says Paul. Was there an expectation that the parents would help the child with post-secondary expenses? A child should not be denied an education just because the parents separate.
Help with post-secondary costs is not necessarily limited to one degree, she says.
“Generally, there would be support from the parents for the first degree,” says Paul. “If both parents have advanced degrees, or if there is an ability to pay, there very well may be support for the child for a second degree as well. There isn’t a limit in that regard in the Child Support Guidelines – it all depends on what’s reasonable."
Although there is no upper age limit in the Child Support Guidelines, as children get older, it is less likely that they will be entitled to assistance, says Paul.
“In the case of a child who’s 30, for example, there would have to be an establishment that the child is dependent,” she says. “By the age of 30, many are not dependent, but some are. That’s going to be dealt with on a fact-by-fact basis. Usually, to have support extended to 30, it would be a case where there is a disability.”
Post-secondary expenses are broader than just tuition payments, says Paul, as books, accommodations, food, transportation, utilities, and entertainment will all be factors as well.
“It’s really important for parents and the child to come up with a budget and establish who’s going to fund what,” she says.
At the time that a child starts attending post-secondary education, there is often a change in the way that regular child support is handled.
For example, if the child lives primarily with the father before graduating high school, for example, and the mother has been paying child support monthly, and the child goes away to school, the father may not continue getting the payment, or it may be a smaller amount, says Paul.
“Dad will still have to maintain a home that’s suitable for the child to come home to, but the daily expenses are no longer being met by him.”
Monthly child support may be reinstated if the child returns home in the summer.
Interestingly, says Paul, children of separated families whose expenses are decided by the courts generally have their post-secondary education at least partially-funded by their parents – to which degree depends on the specific circumstances – but children of intact families do not have that advantage, as nothing forces those parents to allot funds for their child’s college or university education.
“A child can bring a support application against their parents if they refuse to fund post-secondary education, but it’s very rare,” says Paul.
Even if children are extremely young, Paul advises separated parents to come up with a plan for funding post-secondary education as part of the separation agreement.
“Often parents will agree to put aside a certain amount of money per month for that future expense,” she says. "Those savings could be held inside one or multiple RESPs to take advantage of the government’s contribution to post-secondary costs. The separation agreement would address who puts in how much, when the funds would be taken out, and what happens if they are not used."
In other cases, Paul has had parents selling a matrimonial home agree to put a portion of the sale proceeds into an education fund.
“However, not everyone can do this. When people are separating, there’s a strain on available resources, and sometimes they need everything they can get to establish a new home,” she says, noting that it’s helpful to have a mediator involved when creating a plan.
It can be challenging to reach agreement when parents don’t place the same importance on education, or have different available resources, says Paul.
In addition to the advance planning, says Paul, in the spring before a child begins their post-secondary education, the family needs to discuss a budget for the expenses and how those expenses are met, and look at what changes, if any, are needed to the ongoing child support structure.