By Kayleigh Pink, Associate Research Lawyer,
Lam Family Law*

General Principles

RRSP income is presumptively part of a party’s income for child support purposes because it is included as part of total income on the T1 tax form. Additionally, the clear wording of the Federal Child Support Guidelines (“Guidelines”) includes RRSP withdrawals, and Schedule III to the Guidelines does not create any specific exception for RRSPs: Roloson v Clyde, 2017 ONSC 3642 (CanLII), at para 199, citing Fraser v. Fraser, 2013 ONCA 715 (CanLII) & Ludmer v. Ludmer, 2014 ONCA 827 (CanLII). See also J.M.M. v. C.R.M, 2025 ONSC 3067 (CanLII), at para 599.

Given this presumption, the onus is on the party seeking to exclude RRSP withdrawals from their income to satisfy the court that it is appropriate to do so: Roloson v Clyde, ibid, at para 200, citing Burzminski v. Burzminski, 2010 SKCA 16 (CanLII). See also J.M.M. v. C.R.M, ibid, at para 600.

There is overlap in the principles concerning the treatment of RRSP withdrawals for child and spousal support purposes. However, different considerations may also apply. For example, in the spousal support context, there may be a concern about double recovery if the RRSP forms part of a property settlement or equalization payment and the entire amount or equalized portion is subsequently included as income. In contrast, the fact that an RRSP was included in a property settlement or equalization payment is not in and of itself considered to be a basis to exclude it from income for child support purposes, “since equalization is a matter between spouses and child support is not paid to increase a spouse’s lifestyle”: Kinsella v. Mills, 2020 ONSC 4785 (CanLII), at para 192.

This article focuses on the treatment of RRSP withdrawals for child support purposes.

The Reason (or the ‘Why’) behind the RRSP Withdrawal(s) is an Important Factor

While the frequency or regularity of RRSP withdrawals is often considered by the court when determining whether to include the withdrawals in income for support purposes, it is not determinative of the issue. Rather, it appears that the court typically puts more weight on the reason for the withdrawal.

In the recent case of J.M.M. v. C.R.M. (2025), Justice Chappel observed as follows:

if the RRSP withdrawals are fairly regular and appear to have been used to cover ordinary living expenses for the party’s lifestyle choices, they are more likely to be included as income for the purposes of determining support… However, the fact that RRSP withdrawals are irregular or non-recurring in nature is not determinative of the issue… The reason for the RRSP withdrawal is an important factor in determining whether it should be included in income.”: J.M.M. v. C.R.M, 2025 ONSC 3067 (CanLII), at para 600 [underlining added], citing various cases.

This article explores two categories of reasons that may justify excluding RRSP withdrawals from income for child support purposes. First, the use of RRSP withdrawals to pay for legal fees, to pay off debt, or for a specific purpose. Second, the use of RRSP withdrawals to make ends meet when a party is not receiving proper child and/or spousal support.

A. Legal Fees / Debt / Specific Purpose

It may be appropriate to exclude RRSP withdrawals where a party needs the funds to pay for family litigation, to pay off debt, or for a pressing specific purpose, rather than routine living expenses: J.M.M. v. C.R.M, 2025 ONSC 3067 (CanLII), at para 600.

For example, in Zigiris v. Foustanellas (2016), Justice Shelston declined to include the father’s RRSP withdrawals in his income for child support purposes where he had cashed in his RRSPs to pay his support obligations and legal fees and to avoid being in default of a temporary order at the time of trial: Zigiris v Foustanellas, 2016 ONSC 7528 (CanLII), at paras 80-81.

However, RRSP withdrawals will not be excluded where the party claims their withdrawals were used for one of these reasons (i.e., family law litigation, to pay off debt, or for a pressing specific purpose), but provides no or insufficient evidence to support their claim.

For example, in Boyer v. Brown (2023), the father argued, for the first time in closing submissions, that he withdrew from his RRSPs to pay legal expenses. He did not address legal expenses incurred in his opening statement, his testimony, or his documentary evidence. Justice Corthorn found that it would be unfair to permit the father to rely on legal expenses as a ground for excluding RRSP income when he failed to give the mother or the court notice that he intended to rely on that ground. The court noted that it would “in any event” deny the father’s request because he “failed to present any evidence to connect the withdrawal of RRSP funds to payment of legal expenses.”: Boyer v. Brown, 2023 ONSC 3905 (CanLII), at paras 147-150.

Justice Corthorn also rejected the father’s alternative explanation that he used the RRSP funds to pay arrears of and ongoing child support. In addition to a lack of evidence connecting the withdrawals to support payments, the court was not persuaded that excluding RRSP income would lead to the fairest determination of income because: (1) if the funds were withdrawn to meet child support obligations, they were withdrawn in an effort to catch up on over five years of arrears, including arrears that accrued in two years when the father was making a six-figure income; (2) the Guidelines do not make any special provision for RRSP income; and (3) the inclusion of the father’s RRSP for the purpose of equalization addressed the assets as between the parties, but did not address the availability of funds from which the father “could have been fulfilling his separate and distinct obligations to his children”: Boyer v Brown, ibid, at paras 153-167, citing various cases.

Similarly, in Richard v. Holmes (2020), Justice Minnema included the father’s RRSP withdrawals in his income for child support purposes where there was a lack of evidence to connect the withdrawals to legal fees. The father withdrew $25,000 in 2018 and $103,372 in 2019 (the relevant years for the mother’s retroactive child support claim). He argued the primary reason for his withdrawals in 2017 and 2018 was to pay for legal fees associated with the family law dispute. He argued that his large withdrawal in 2019, after he became unemployed, was primarily used for ongoing legal fees but also “to keep a roof over his head”. The court found that the father failed to provide evidence setting out the amount of his claimed legal fees. He did not provide “bills, statements of account, or other evidence about legal fees to substantiate his suggestion that was what the withdrawals were for. He did not even reference a specific amount.” Given the lack of evidence, Justice Minnema found that the father had not established legal fees as the reason for his withdrawals: Richard v. Holmes, 2020 ONSC 6485 (CanLII), at paras 30-31, 33, & 38. See also Tone v. Tone, 2020 ONSC 2965 (CanLII), at paras 95-97 [Baltman J. rejected the father’s argument that his RRSP income of $18,102 should be excluded because he “needed the money for his legal fees and other expenses”, where the father failed to provide any receipts or other evidence showing he used the funds for legal expenses or support payments].

B. Necessity Due to Not Receiving Proper Support

The court will not usually include a recipient spouse’s RRSP withdrawals in their income where they made withdrawals out of necessity during a period when they were not receiving appropriate support from the other spouse.

As observed by Justice Chappel in J.M.M. v. C.R.M. (2025), the “caselaw reflects a reluctance to include non-recurring RRSP withdrawals in the income of a recipient spouse where the funds were used to cover their needs during a period when they were not receiving the correct amount of support”: J.M.M. v. C.R.M, 2025 ONSC 3067 (CanLII), at para 600, citing McConnell v. McConnell, 2015 ONSC 2243 (CanLII) & Collins v. Nowosad, 2019 ONSC 755 (CanLII), at paras 47-50.

For example, in Collins v. Nowosad (2019), the court declined to include the mother’s RRSP withdrawals in her income for support purposes where she made the withdrawals to pay her credit card bills and make ends meet during a period of three years when the father was not paying any spousal support and only started paying child support after about two years. Justice Shelston found that it would not be “fair” or “reasonable” to include the mother’s RRSPs/mutual fund withdrawals because it would result in her having an “unrealistically high income.” Further, the court noted that “including her RRSPs/mutual fund would not fairly reflect her financial capacity for child and spousal support purposes. It would artificially increase her income which would benefit the [father]”: Collins v Nowosad, ibid, at paras 46-50.

Similarly, in McConnell v. McConnell (2015), Justice Price found that it made “no sense” to include the wife’s RRSP withdrawals in her income for support purposes when they were “made necessary by the fact that she was not receiving timely payments of child and spousal support”. Including the withdrawals would “diminish” the spousal support the wife received in the future, when she would no longer be receiving RRSP income. The court stated that “[t]aking such an approach would result in a support amount that is premised on an unrealistically high income.” These transactions were also considered anomalous when compared to her prior transactions relating to her RRSP, which supported her claim that these were “one-time” withdrawals: McConnell v. McConnell, 2015 ONSC 2243 (CanLII), at paras 104-109. See also McMurter v. McMurter, 2016 ONSC 1225 (CanLII), at para 165 [MacLeod-Beliveau J. deducted the recipient’s one-time RRSP withdrawal where she withdrew the funds to support herself during a time she was not receiving adequate spousal support].

Summary

If your client is seeking to exclude RRSP withdrawals from their income for child support purposes, ensure that they have a good reason to exclude the withdrawals, and that they have sufficient supporting evidence to support their claim.

*with thanks to Maria Golarz for her suggestions and edits.
 

This blog is informational only and should not be relied on as legal advice.