Disclaimer: This article aims to provide educational information surrounding child support. It is not intended to serve as legal advice. Consult with a lawyer and exercise your discretion before taking action based on the information provided in the blog.
Determining fair child support can get complicated—especially when one parent isn’t fully transparent about their income or is intentionally earning less than they could. In such cases, Ontario courts can use a legal tool called “imputing income” to ensure that child support calculations reflect what’s fair. But what does imputing income mean, and how does it work? That is what we will consider in this article.
What does imputation of income mean?
Imputation of income means that the court assigns a parent an income based on what they could realistically earn rather than what they are currently reporting.
What do the Federal Child Support Guidelines say regarding imputing income and increasing a party’s support obligation?
The Federal Support Guidelines allow the courts to impute a party’s income for various reasons listed under Section 19(1). Subsections (g) and (h) relate to self-employed and corporate income, which have been discussed in other articles.
Let’s consider two reasons the courts are permitted to impute a party’s income – where the party is deliberately underemployed (Section 19(1)(a)) and where the party purposefully withholds financial information (Section 19(1)(f)).
The courts can impute an income when the spouse is intentionally under-employed or unemployed.
Section 19(1)(a) reads: “the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;”
The Ontario Court of Appeal examined this issue in Drygala v. Pauli, establishing a three-part test for determining when income should be imputed based on intentional underemployment or unemployment. The first two parts relate to whether or not income should be imputed.
- Is the spouse intentionally under-employed or unemployed?
The first step in the test is to determine whether the spouse intentionally chooses to earn less than they are capable of. This means the spouse has made a conscious decision to earn less, even if this decision is not made in bad faith or to lower their support payments. - Is the intentional under-employment or unemployment required for reasonable educational needs?
The second part of the test looks at whether the spouse’s under-employment or unemployment is a necessary result of their reasonable educational or health needs or the needs of a child. For example, if a spouse works fewer hours to attend school or care for a child, the court may allow this under-employment as a valid reason if it is genuinely required.
The third question relates to how much income should be imputed, which we will cover in the next section.
Income can be imputed when a spouse fails to be transparent about their earnings.
Section 19(1)(f) says the courts can impute income if “the spouse has failed to provide income information when under a legal obligation to do so.”
For example, imagine a situation where a woman’s former partner works a regular day job but also works for cash on the weekends, and he fails to declare this additional income in his financial statement. In this case, the woman could ask the court to impute this undeclared income when calculating child support.
The party seeking to impute income is responsible for providing evidence that the other spouse is either underemployed, unemployed, or withholding financial information. This could include details about the spouse’s work history, ability to earn more, or evidence of their unreported income.
How Ontario Family Law Determines How Much Income to Impute for Child Support
The final question in the test outlined above is: What income is appropriately imputed in the circumstances?
The answer will depend on many factors and is unique to each case. The courts will consider the spouse’s earning capacity, their work history, education, skills, and available job opportunities. The goal is to assign an income to the paying spouse that reflects their true earning potential and results in fair child support payments.
Plat Simionati LLP: Your Ontario Family Law Lawyers
Making sure that your child support obligations are fair can be complex. However, it is essential to ensure that you and your children’s financial needs are met while protecting your rights as a parent.
At Plat Simionati LLP, we have extensive experience helping clients in Ontario with their child support matters. If you’re unsure how the guidelines apply to your case, our expert family law lawyers are here to help. We can guide you through the process and ensure that your family’s best interests are protected.
Don’t navigate complex child support matters alone. Contact Plat Simionati LLP today to protect your rights and your child’s needs.