Imputing Income: Intentional Under- or Unemployment

What if my spouse isn't working, or I don't think they're not making enough money?

The Child Support Guidelines use payor income and number of children as factors to derive a “table amount” of child support that should be paid each month to the recipient parent. The reasoning behind the Table amount following the income of the payor is simple: minor children ought to continue to benefit from the income level of both of their parents. Generally speaking, the more money the payor makes, the greater the amount of child support that will need be paid; and conversely, the less money a payor makes, the lower the amount of child support.

However, there are cases of parents being intentionally under or un-employed, giving them an extremely low Table amount that can be unfair to both the other parent and the child(ren) in question.  In this post, Jeffrey Sun, a University of Ottawa law student and Fresh Legal intern, along with Kayla Sanger, our former articling student, review some cases where income was imputed to a payor for being intentionally under- or unemployed.

Imputing Income

The case Contino v Leonelli-Contino makes clear that when a parent’s financial statement does not reflect a fair assessment of their income, then the court can “impute” additional income to that parent based on their earning capacity. Imputing income is when the court makes an assumption about a parent’s income, be it true or not.  There are many reasons why a court may impute income to a parent. Among these reasons is when a parent is intentionally under- or un-employed.

If a parent is not earning as much as they could, then in some circumstances, the court may impute income to them. In other words, the court will say “you ought to be earning $X, you have no reason to be earning less, and so for the purposes of child support, we will use $X as your income to calculate child support.” The authority from this comes from section 19(1)(a) of the Child Support Guidelines.

Cases Where Income Has Been Imputed for Underemployment or Unemployment

A leading case on imputing income is Drygala v Pauli. In that case, the question of intentions was analyzed, particularly whether there was a bad faith requirement needed to impute income under section 19(1)(a). The Court held that bad faith is not required to impute income. In other words, “there is no need to find a specific intent to evade child support obligations before income can be imputed.” The Court also held that while being intentionally underemployed may be reasonable for some purposes (e.g. returning to school as an adult), it was nonetheless unreasonable for child support purposes. As such, income was imputed to the payor father, estimated as that of a part time employee with his then current level of education.

In an Alberta case, A v A, the payor parent won the lottery and ceased to work and earn income. For the purposes of child support, however, the Court imputed both employment and investment income to the payor parent.

In the British Columbia case Baldini v Baldini, the Court imputed income to a payor parent who was dismissed from his employment with cause. Since the payor parent acted in a manner that led to being fired, as opposed to laid off without any fault, that parent was intentionally unemployed: they chose to act, they acted intentionally, and the result was unemployment. Income was imputed as if they had not been fired.

Finally, in the case Currie v Currie, the court imputed income to the payor who was a defence attorney. The reasoning behind this was that the lawyer had previously been employed with the crown prosecutor’s service, but decided to open his own defence firm, leading to an income reduction. That choice was intentional, and the Court found that the lawyer was, therefore, intentionally underemployed.