Is a severance package counted as income for child support in the year it's received in Ontario?

A severance package is generally included in a parent's income for the year it's received, since it replaces employment income the parent would otherwise have been earning and is a genuine financial benefit received in that year. Because a severance payment is typically a one-time lump sum rather than a recurring amount, courts recognize that simply adding the full amount to that year's income and using it as the go-forward figure can overstate what the parent will realistically earn afterward, so courts have discretion to treat it as a non-recurring amount and adjust the calculation accordingly, sometimes spreading its effect over more than one year.

The right approach often depends on the parent's circumstances afterward: someone who quickly finds comparable new employment is in a different position than someone who remains without work for an extended period and is genuinely relying on the severance to cover living expenses during that gap. Courts also look at whether the parent is making reasonable efforts to find new work, since a severance payment does not eliminate the ordinary expectation that a parent will seek employment consistent with their capacity. Because this involves both a one-time inclusion question and a go-forward income question, clear evidence about the parent's employment status after the severance matters.