Reducing Child Support with an RESP

October 28th, 2014 by

Toronto family law expert John Schuman recently addressed a pressing question that plagues many separated parents as their children grow: “I do not have a legal separation in place in Ontario. I have been paying child support for my 16 and 17 year old daughters at $900.00 a month for several years. My oldest daughter starts university in September. My wife and I contributed towards an RESP and there is now $120,000 in the plan. My daughter will be living with her mother and attending university. My wife is talking about a divorce and wants me to provide financial disclosure. I have nothing to gain by obtaining a divorce now. My income is $60,000 annually and I was wondering if I could reduce the support paid and have the money come out of the RESP. Can my wife force me to disclose my assets and proceed with a divorce? I don’t want to go to court and have a court order if I can avoid it.”

It sounds like you have a good case to change the way support is paid.  Child support is much more flexible after age 18.  Available funds such an RESP should be used first.

When it comes to university and college expenses, parents contribute to those expenses, above what the child could reasonably contribute, in portion to their incomes with some consideration as to what is affordable.  For more on these types of expenses, you may want to listen to this podcast.  RESPs can significantly affect what each parent must pay while a child is in post-secondary education.

Generally speaking, parents can use an RESP to cover their portion of a child’s post-secondary education expenses.  This means that if one parent put all the money into the RESP, what comes out of the RESP will be considered that parent’s contribution to the post-secondary education expenses.  There is some benefit to doing that after separation as the parent who uses the RESP will also get to use the government credits and the investment’s growth as part of his or her contribution, while the other parent has to pay using all of their own money.  Where both parties contributed, but in different amounts, the money used out of the RESP is often allocated to each parent’s contribution in proportion to what each parent contributed.  Where both parents contributed equally, then the RESP is considered an equal contribution from each parent.

The child also has an obligation to contribute to his or her own educational expenses by applying for scholarships and bursaries that are available and by working if there is not enough money to cover school expenses, although that does not sound like it applies in your case.

Also, you should note that when you are contributing to a child’s post secondary education expenses (either through your RESP contribution or directly), there may be a change to the base child support where the child is going away to school.  Part of the expenses that the parents will be sharing are for things like residence, meal plans and other living expenses that would usually be covered by base support.  So, it is common for base or table child support to be reduced so that one parent does not pay for the same expenses twice.

It may also be the case that spousal support would be changed as well.  See this webpage for details.

If you want some information about how to change a support order, watch this video.

You can also learn a lot more about these child support issues, and other family law matters, by reading this $20 easy-to-understand book on Ontario Family Law.

Since these child support for children in college or university cases depend a lot on the particular facts, you should probably speak to a good family law lawyer to find out how the law applies to your specific situation and determine your best options.

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