Income Decreased

C

Canadaguy

Member
Finally got my ex's tax papers last month (yeah, better late than never!) and noticed that she switched jobs and now makes about $10k less at her new career choice. It was voluntary switch.

Am I off base by saying her CS is based on her previous earnings and inputting an income to her for CS?

We have shared 50/50 custody with offset CS, me being the payor (higher income).

Would be nice if anyone could point me to some case law where someone switched jobs and made less but was forced income imputed to them.

Thanks.
 
Canadaguy said:
Finally got my ex's tax papers last month (yeah, better late than never!) and noticed that she switched jobs and now makes about $10k less at her new career choice. It was voluntary switch.

Am I off base by saying her CS is based on her previous earnings and inputting an income to her for CS?

We have shared 50/50 custody with offset CS, me being the payor (higher income).

Would be nice if anyone could point me to some case law where someone switched jobs and made less but was forced income imputed to them.

Thanks.
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I haven't read any case law on that, but I think you're reasonable in your assumption that the offset should be based on what she was making, and is capable of making.

Did you run the numbers? What is the actual difference monthly?
If it's a small amount, may not even be worth addressing.
 
It may hinge on why she changed jobs.

If her old job ended and was no longer available, and the newer job was in the same field and paid less, then she may have a case.

If she voluntarily left the position for a lower paying one in a different field, then she should have the old income imputed.
 
CS should be based on her most recent Line 150. But before you think about going after her for the difference between what she made in 2012 and what she made in 2013, consider whether this is worth the time and effort or whether you should just pay the offset based on her most recent tax form going forward. How much difference would $10K make in your payments? This depends on your income and hers:

Scenario A: You earn $80K per year; she went from earning $30K to $20K

Scenario B: You earn $150 per year; she went from earning $110 to $100K.

In the first case, it makes a big difference; in the second case probably not worth your time to pursue. My understanding is that imputing an income is only really worth it when someone is very clearly underemployed - working far below what they could work. People are allowed to switch jobs and to have their income fluctuate.
 
She left her job for a different one in a different field for less money because she wanted too. Her previous job was government with good pension and crazy pay for what she did.

The pay difference is more like Stripes example #1, so it is worth fighting for me.

I pay by cheque, so if she disagrees by having me input her income she has to take me to mediation according to our agreement and has to pay for mediation which will cost more than it's worth. So really it is up too me what I decide to do.

Going to have to do some research so that if I do go to mediation I have case law on my side that input income is the right thing to do.
 
Canadaguy said:
She left her job for a different one in a different field for less money because she wanted too. Her previous job was government with good pension and crazy pay for what she did.

The pay difference is more like Stripes example #1, so it is worth fighting for me.

I pay by cheque, so if she disagrees by having me input her income she has to take me to mediation according to our agreement and has to pay for mediation which will cost more than it's worth. So really it is up too me what I decide to do.

Going to have to do some research so that if I do go to mediation I have case law on my side that input income is the right thing to do.
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I don't think you can imput her income yourself, I think a judge has to do that.
 
standing on the sidelines said:
I don't think you can imput her income yourself, I think a judge has to do that.
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Yes, true but we have to agree on the change in support. And if we don't we can either keep it the same or change it to whatever we feel like.

Then the other party has to determine if it is worth taking to court. If I have case law backing me up, then why would she fight a potential losing cause that will cost more than it's worth when a judge would just do the same as me.

I write the cheques so I have some leverage on what I decide to pay.
 
I would just not modify the child support and keep paying the same amount and let her start the conflict.
 
Canadaguy said:
I write the cheques so I have some leverage on what I decide to pay.
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No, you pay what the law and your agreement says you pay until you have a legal piece of paper saying otherwise. You don't get to just decide that your ex should be imputed (not "inputted") some arbitrary amount of income and then pay what you want to pay. You are not a judge. You use the most recent income information available; if you think this does not reflect her true earning power, take it to mediation or to court. If you deliberately underpay your child support obligations because you don't feel like following the law, it will not look good on you.

Think about it this way: maybe YOU should be imputed a higher income. You could probably make more money than you currently do, if you really tried. What would you think if your ex said "I'd like to 'input' your income at $200 000 because I believe you could earn that much money if you really tried. So starting next month, you owe me an additional $500"? Ridiculous, right?
 
Canadaguy said:
Yes, true but we have to agree on the change in support. And if we don't we can either keep it the same or change it to whatever we feel like.

Then the other party has to determine if it is worth taking to court. If I have case law backing me up, then why would she fight a potential losing cause that will cost more than it's worth when a judge would just do the same as me.

I write the cheques so I have some leverage on what I decide to pay.
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You have it alll wrong. If you want to lower your support obligations you must get a new order. I am sure your order or agreement does not say 'the parties must agree on new cs amounts and if they don't one party gets to arbitrarily decide what's owed'

You pay based on line 150, if you feel she should be making more you have to be the one to initiate mediation or court to have her income imputed. There are many cases to back up the fact that changing jobs for reduced income is actually in the best interest of the children so your case law you have backing you up may be worthless to you.
 
You might pay by cheque right now, but if you just make the decision to change the amount without discussion and a court order, she can decide to register with FRO and they will enforce the court order regardless. So be careful thinking you hold all the cards.
 
Beachnana said:
You might pay by cheque right now, but if you just make the decision to change the amount without discussion and a court order, she can decide to register with FRO and they will enforce the court order regardless. So be careful thinking you hold all the cards.
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Yes BUT, if his order has the ex at the higher income then offset will stay the same when shes lowered her income too.

However, she can still register at FRO and from the sounds of it you're making less so you're still subject to the higher amount.

Tread carefully. My partner reduced his cs based on lower income AND provided a cheque for arrears on the higher income he was making the previous year. Ex filed with FRO. Now for him, the order was signed when he was on EI before so he was covered in a way but now they will have to go to court when he gets a higher paying job because his ex is high conflict and non-negotiable. Best to speak to a lawyer to see just how you go about it. You might have some negotiating power IF imputing looks successful. You also have to weigh the legal costs too. If you're unsuccessful, you could be on the hook for her costs too.
 
Simple question:

What would you want to happen should you decide to take a lower paying job? Would you want your c/s payments to be reduced accordingly? Do you think your ex would agree to reducing c/s?

This is another cost/benefit question - How much are you willing to spend to have the income imputed? You may win the battle in having the income imputed, but lose the war in legal fees.

Should you refuse to agree to your ex's new income, the ex can file a motion to up c/s accordingly. There may be good reason to her for the change, notwithstanding whether or not you agree with that reason.

Think big picture here. Are you likely to succeed? How much are you willing to pay to succeed? What would you want to happen if roles were reversed?
 
I went through a similar income change with my ex; she reduced her pay by $12,000 per year when she switched jobs. I received no notification from her about this change; no reason was given. I found out when we exchanged our financials for our annual review. I pointed out to her that because she is a child support payor she cannot arbitrarily volunteer to reduce her income without notifying me considering the financial impact - based on my understanding neither one of us can arbitrarily volunteer to reduce our incomes. We compromised, we did our annual review using the income she should have been earning for that year. Then we redid the numbers using her actual income for the next year. I knew it would cost more to go to court or hire a lawyer than it would be to accept that she had changed jobs. She also has an imputed income (she has a history of stopping work when she feels like it) so she can choose to make less but she knows her cs will be based on the imputed amount regardless. Her income currently hovers just above the imputed amount.
 
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first timer said:
I went through a similar income change with my ex; she reduced her pay by $12,000 per year when she switched jobs. I received no notification from her about this change; no reason was given.
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People don't have to justify their household decisions to the other former spouse.

I found out when we exchanged our financials for our annual review. I pointed out to her that because she is a child support payor she cannot arbitrarily volunteer to reduce her income without notifying me considering the financial impact - based on my understanding neither one of us can arbitrarily volunteer to reduce our incomes.
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Says who? An individual may choose to take a lower paying job for a number of reasonable reasons. As mentioned above, as they are no longer married, they don't have to justify their decisions with their former spouse.

We compromised, we did our annual review using the income she should have been earning for that year. Then we redid the numbers using her actual income for the next year. I knew it would cost more to go to court or hire a lawyer than it would be to accept that she had changed jobs. She also has an imputed income (she has a history of stopping work when she feels like it) so she can choose to make less but she knows her cs will be based on the imputed amount regardless. Her income currently hovers just above the imputed amount.
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It is good that you were able to negotiate this, because had it gone to court, your success on imputing the old income would hinge off of whether the ex's decision was reasonable.

One can't arbitrarily quit their $100k job to take a job at Timmies making $20k annually. But one can certainly take a job that moves their income from $50k to $40k if there is good reason behind it (closer to home, better/flexible work hours, better benefits etc. etc.)

Many years ago I took a job that paid me about $10k less annually to be closer to my child. I didn't tell my ex about the decreased income as my income is none of her business until it comes time to make the annual adjustments. At that time I reduced my c/s accordingly. My ex complained, but I told her my reasoning and that if she had a problem she can take me to court. She didn't because my reasoning was sound and she would've lost.
 
Our Order stipulates we notify each other of any/all changes to income immediately because it does impact the other parent financially; your right though, it doesn't mean she will, case in point.

I did not impute an income on her, the judge did in our Order because of her past actions with regards to stopping work for no valid reason.

She told the judge she did not feel financially responsible for our children that it was my responsibility, well she ended up with an imputed income. The amount is fair and it means I am not fully financially responsible for our children. So for me going to court way back when was a good thing, my ex did all the hard work for me.
 
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stripes said:
No, you pay what the law and your agreement says you pay until you have a legal piece of paper saying otherwise. You don't get to just decide that your ex should be imputed (not "inputted") some arbitrary amount of income and then pay what you want to pay. You are not a judge. You use the most recent income information available; if you think this does not reflect her true earning power, take it to mediation or to court.
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My income is not changing, it is the same. It is her income that is changing. I am not changing anything. She is requesting more CS from me (offset) because her income has decreased. I did nothing nor did I approach her on the subject, she came to me.

According to our agreement, she has a material change in circumstances. She has to provide me with information (employment records, reason for changes, etc) and request a change in child support.

I can simply say no, I do not agree to the change and according to our agreement she has to first take it to mediation and pay 100% of the mediation. I can sit thru mediation, agree on nothing and then after a few $1,000'ish she has to file a court application. Then a year after court we go in front of a judge and he says income will be imputed to her because she cannot reduce her income and expect a reduction in CS.

I just need to find the case law out there to show the judge why our situation imputed income would be the case.

Berner_Faith said:
There are many cases to back up the fact that changing jobs for reduced income is actually in the best interest of the children so your case law you have backing you up may be worthless to you.
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Please provide.

I won't change the CS without first having the discussion and trying to agree on something, maybe a compromise in the middle for CS or something. But before I agree I have to run the full numbers and see the cost vs. court benefit. But it helps to have case law proof to backup my main point:

"That child support is the right of the child and that both parents have a financial responsibility to provide child support to each other for the child. If either parent has a change to reduce their child support obligation it must be for just cause and not for personal benefit."

For example my CS went down because I got a huge bonus the one year. The next year my income was lower because I didn't receive the bonus. Totally out of my control. However, I was still making the same base income and didn't switch jobs to work for less pay because I felt like it.
 
Canadaguy said:
My income is not changing, it is the same. It is her income that is changing. I am not changing anything. She is requesting more CS from me (offset) because her income has decreased. I did nothing nor did I approach her on the subject, she came to me.

According to our agreement, she has a material change in circumstances. She has to provide me with information (employment records, reason for changes, etc) and request a change in child support.

I can simply say no, I do not agree to the change and according to our agreement she has to first take it to mediation and pay 100% of the mediation. I can sit thru mediation, agree on nothing and then after a few $1,000'ish she has to file a court application. Then a year after court we go in front of a judge and he says income will be imputed to her because she cannot reduce her income and expect a reduction in CS.

I just need to find the case law out there to show the judge why our situation imputed income would be the case.

I won't change the CS without first having the discussion and trying to agree on something, maybe a compromise in the middle for CS or something. But before I agree I have to run the full numbers and see the cost vs. court benefit. But it helps to have case law proof to backup my main point:

"That child support is the right of the child and that both parents have a financial responsibility to provide child support to each other for the child. If either parent has a change to reduce their child support obligation it must be for just cause and not for personal benefit."

For example my CS went down because I got a huge bonus the one year. The next year my income was lower because I didn't receive the bonus. Totally out of my control. However, I was still making the same base income and didn't switch jobs to work for less pay because I felt like it.
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You're assuming a lot of things. I am not a lawyer, but my sense is that the bolded sentence in your agreement, on which you seem to be pinning your hopes, won't hold up. Who is to say when an employment change is "for just cause"? What constitutes "just cause": my doctor told me to cut back my work hours, I'm phasing into retirement, my company reorganized, I'm tired of really long commutes, I don't like my colleagues any more, I want more time with my family, I'm changing fields? You may see your ex's job change as a nuisance for you, because it means you're on the hook for more money, but to her, the reasons for the change may be completely justified.

Your ex doesn't have to get your permission to change jobs, any more than she has to get your permission to repaint her kitchen. HammerDad is right.

Similarly, I don't think the part about reducing child support obligations is relevant here - neither of you are attempting to alter your obligations, you're both still obligated to pay each other the table amount (offset) - only the dollar figure attached to those obligations is changing.

And I don't think it's going to be as simple as refusing to increase your payments, sitting through a couple of mediation sessions, and then going before a judge who will see it as right and obvious that your ex should be imputed a higher income, once you throw in a few case law references. I think it is just as likely that the judge may see you as unreasonable in refusing to follow very simple FSCG calculations and hit you with costs and arrears. My understanding is that when attempting to impute income, the burden is on you to prove that your ex is deliberately choosing to not work, not on her to justify why she changed jobs.

My ex took a partial leave last year because his new wife had health problems. His income dropped. I had to pay more in offset. It's life, it happens. I didn't try to have income imputed on the grounds that he could have been earning more money, and therefore he should have been earning more.

What number is on line 150 of your most recent annual tax return?
What number is on line 150 of her most recent tax return?
What are the guideline payments for each?
What is the difference between the two payments?
There you go.
 
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