Why does my ex need to see my income tax return?

Jack has been paying child and spousal support to Jill for over a year now, pursuant to a temporary agreement reached between them in mediation based on what they anticipated to earn in 2013.  Jack recently completed his 2013 income tax return, which confirms that his actual income for that year was higher than he had anticipated.  He wonders whether he has an obligation to tell Jill about his higher income.  The last thing he wants is for her to find out that he is making more money and, as a result, that he needs to increase the monthly support payments he is making!  

 

Normally, final separation agreements (or court orders) which contain child support obligations will provide that parties have to exchange their income information each year.  This is because the law (Child Support Guidelines) specifically says that child support may be varied each year to reflect any changes in the parents’ income.  The change does not have to be important: as a payor’s income fluctuates, so does his or her child support obligation. Thus, the importance for parents to exchange income information each year.

This is not necessarily the case for spousal support.  Usually, an ex-spouse’s obligation to pay spousal support is based on the income that the parties earned at the time of their separation.  To subsequently vary a spousal support agreement or court order, the person requesting the change  must show that there has been a “material change in either party’s circumstances” since the making of the agreement or court order.  A significant change in one’s income may (and I say “may”) justify a change in spousal support. Other circumstances justifying a variation of spousal support could include a payor’s retirement; the support recipient moving in with a new spouse; the termination of a child support obligation; a change in employment for either party; or any other such change affecting either parties’ financial situation.  Since there is no inherent right to vary spousal support each year, there is normally no positive obligation imposed on the ex-spouses to exchange their income information yearly.  However, the ex-spouses have an obligation to disclose any “material change in one’s circumstances” when it arises. As always, if the parties cannot agree on the new support amount, they will need to seek the variance through a court order.