In Ontario, the Family Responsibility Office (FRO) has the legal authority to garnish up to 100% of a severance package or wrongful dismissal settlement to recover child support arrears. If you lose your job, you remain legally obligated to pay your court-ordered support until a judge formally changes it.
Losing your job in Ontario is an incredibly stressful experience, especially when you have ongoing financial obligations to your family. If you have been let go from a company in Toronto, Mississauga, or Ottawa, you may be relying on your severance package to keep you afloat. However, if you are behind on your child support payments, that safety net is legally vulnerable.
Many parents mistakenly believe that a private wrongful dismissal settlement or statutory severance pay is exempt from family law enforcement. This is completely false. In Ontario, child support is heavily prioritized. The Family Responsibility Office (FRO) operates under strict provincial legislation, granting them immense power to intercept lump-sum payouts before the money ever reaches your bank account. If you are facing termination and have child support arrears, connecting with a local Ontario family lawyer from our directory is essential to manage your legal and financial exposure. 💰
Step-by-Step Process of Severance Garnishment in Ontario
Understanding how the FRO intercepts your severance can help you take proactive steps to manage the situation. Whether you work for a small business in Hamilton or a massive corporation in Brampton, the procedural steps for wage and settlement garnishment remain the same.
Step 1: The Support Deduction Notice (SDN)
When you are ordered to pay child support in Ontario, the court order is automatically filed with the Family Responsibility Office. The FRO immediately issues a Support Deduction Notice (SDN) to your employer. This notice legally compels your employer to deduct your regular monthly child support from your standard paycheque.
Step 2: Employer Mandatory Reporting on Severance
Under the Family Responsibility and Support Arrears Enforcement Act, an employer is legally obligated to notify the FRO if a payor’s employment is terminated. When the company finalizes your severance package-whether it is the minimum statutory severance under the Employment Standards Act or a negotiated wrongful dismissal payout-the employer must hold those funds and contact the FRO before issuing your final cheque.
Step 3: Interception of Funds for Arrears
If you owe child support arrears (past-due support), the FRO will legally instruct your employer to divert the severance funds directly to them. While standard paycheque garnishments are usually capped at 50% of your net income, a lump-sum severance payment can often be garnished up to 100% to satisfy existing arrears. ⚠️ Your employer has no choice but to comply with this provincial order.
Step 4: Negotiating a Voluntary Payment Plan
If you discover that your severance is about to be seized, you must act incredibly fast. You can contact the FRO directly to try and negotiate a voluntary payment plan. If you agree to a structured repayment schedule for your arrears, the FRO may agree to lift the massive garnishment on your severance, allowing you to access some of the funds to pay your rent and living expenses while you look for new work.
Step 5: Filing a Motion to Change (Form 15)
A job loss is a “material change in circumstances.” Because your income has plummeted, your ongoing child support obligation should theoretically decrease. However, it does not happen automatically. You must file a Motion to Change (Form 15) at the Ontario Superior Court of Justice or Family Court to officially reduce your ongoing monthly obligations based on your new, lower income (or Employment Insurance benefits).
How Much Does it Cost in Ontario?
Dealing with child support arrears and job loss involves careful legal maneuvering. Here are the estimated costs in Canadian dollars (CAD) if you need professional help:
| Legal Step / Service | Estimated Cost (CAD) | Details |
|---|---|---|
| FRO Default Penalty Fees | $50 – $400+ | Administrative penalties added by FRO for missed payments. |
| Initial Lawyer Consultation | $300 – $500 | To review your severance offer and support order. |
| Drafting a Motion to Change | $1,500 – $3,500+ | Lawyer fees to legally reduce your ongoing support obligation. |
| Refraining Order Application | $1,000 – $2,500 | Emergency court order to stop FRO from suspending your driver’s licence. |
How Long Does the Process Take?
The FRO moves exceptionally fast. Once your employer notifies them of a severance payout, the garnishment directive can be issued within 5 to 10 business days. However, changing your actual court order is a very slow process. Filing a Motion to Change in an Ontario Family Court and getting a judge to formally reduce your monthly child support payments generally takes 3 to 6 months. This is why you must file the paperwork the moment you lose your job. ⌛
Frequently Asked Questions (FAQ)
Can I ask my employer to pay my severance in cash to hide it?
Absolutely not. It is illegal for an Ontario employer to bypass a Support Deduction Notice. If an employer colludes with you to hide your severance from the Family Responsibility Office, the employer can be held legally and financially liable for the child support arrears.
Is Employment Insurance (EI) subject to child support garnishment?
Yes. The federal government cooperates fully with the Ontario FRO. If you go on Employment Insurance after losing your job, the FRO can and will garnish your bi-weekly EI benefit payments to ensure ongoing child support is paid.
What if I direct my severance directly into an RRSP?
While rolling a severance package into a Registered Retirement Savings Plan (RRSP) is a great tax-shelter strategy, it does not hide the money from the FRO. If the FRO is aware of the payout, they can intercept the funds before the RRSP transfer occurs to satisfy outstanding child support arrears.
Does child support automatically stop if I am unemployed?
No. A court order remains a valid, legally binding document until a judge explicitly signs a new order. If you stop paying because you lost your job, arrears will relentlessly accumulate, and the FRO will take enforcement action against you.
Can the FRO take my spouse’s income for my arrears?
Generally, no. Child support is calculated based on the payor’s income, not the income of a new partner. The FRO cannot garnish the wages of your new spouse or common-law partner to pay for your specific child support obligations.
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