Imputing Income for Child Support
If a child support or spousal support payor’s income is reduced, the court is permitted to imputed income to the person for purposes of support calculations. This means, for instance, that if you stop work to go back to school, or take a lower paying job, a court can require you to continue to pay support as if you were still at your old higher paying job.
The relevant portion of the Canada child support guidelines is section 19(1)(a), which states:
The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:
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 leading case on this is Drygala v. Pauli. The relevant facts of the case are as follows:
During the marriage, Mr. Pauli earned $21.00 per hour as a certified tool and die maker working over 40 hours per week. He was asked to work further overtime for which he would have received over $30.00 per hour. He refused to work the overtime and quit his job.
Mr Pauli commenced a program leading to a Bachelor of Arts. Mr. Pauli testified that his goal was to become an elementary school teacher. He expected to complete his B.A. in psychology in one and a half to two years. Thereafter he intended to take a one-year Bachelor of Education program.
Mr. Pauli’s mother placed him on the payroll of his stepfather’s company, Gemar Tool Inc., for the years 1997 through 2000. Mr. Pauli did not work for Gemar during that period.
The court’s decision was that in applying section 19(1)(a) of the Canada child support guidelines, three questions must be considered.
1. Is the spouse intentionally under-employed or unemployed?
The court found that choosing to attend university rather than working full time could be considered intentional unemployment. The court found that there does not need to be bad faith or an intention to evade child support.
2. If the spouse is intentionally under-employed or unemployed, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs?
There are two aspects to this stage of inquiry. The trial judge must first determine whether the educational needs are reasonable. This involves a consideration of the course of study. The court must then determine what is required by virtue of those educational needs. In other words, considerations such as can the person work part-time, or can the person take the course part-time and continue working full time.
3. If the answer to question #2 is negative, what income is appropriately imputed in the circumstances?
When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in the circumstances. The factors to be considered are the person’s age, education, experience, skills, health, availability of job opportunities, the number of hours that could be worked in light of the parent’s overall obligations including educational demands and the hourly rate that the parent could reasonably be expected to obtain.