Imputation of Income

Today, we'll be discussing the Federal Child Support Guidelines and the issue of imputing income to a payor spouse.

Hello everyone, my name is Andrew Feldstein and I am the founding/managing partner of Feldstein Family Law Group. Today I will be discussing the issue of imputing income to a payor spouse.

The purpose of the Federal Child Support Guidelines is to establish a fair standard of support that children continue to benefit from the financial means of both spouses after separation. This is done by using a methodology that strives to achieve objectivity, efficiency and consistency. A Court can consider imputing an income under section 19(1)(a) of the Child Support Guidelines to give effect to the joint and ongoing obligation of parents to support their children.

The Ontario Court of Appeal set out the following three-part test to be applied when considering a request to impute income:

  1. First, is the spouse intentionally underemployed or unemployed?
  2. Second, if so, is this required by virtue of his or her reasonable educational needs, or the needs of the child of the marriage, or arising from reasonable medical needs? And
  3. Third, If the answer to the prior question is “no”, then the court must decide whether to exercise its discretion to impute income and, if so, in what amount.

There is a duty on the part of a payor to actively seek out reasonable employment opportunities that will maximize their income potential so as to meet the needs of their dependants. The onus remains on the party seeking to impute an income to the other party that he/she is “intentionally underemployed or unemployed”. Once this onus has been dispensed with, the payor must show one of the exceptions of reasonableness. That is to say, when an employment decision results in a significant reduction of child support, it needs to be justified in a compelling way.

Where a party involuntarily loses his or her job through a layoff followed by a lengthy period of unemployment, the Court must consider the payor’s situation, options, and opportunities…in the context of other individuals…facing similar circumstances. An involuntarily laid off employee may require a reasonable period of time to investigate and pursue reasonable income-producing options.

A Court may consider the circumstances of an individual who is underemployed or unemployed, and whether that individual continues to be in such circumstances because he or she is receiving support from another family member or new partner. Further, a Court will consider a person’s lifestyle as a criterion for imputing income.

Given the above, there is one common theme – reasonableness.

Parents are required to act responsibly when making financial decisions that may affect the level of child support available. They must not arrange their financial affairs so as to prefer their own interests over those of their children.

If you have further questions regarding child support or any other family law issue, please contact us online or call us for an initial consultation at (905) 581-7222.

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