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Calgary Support Underemployed Income Imputation

Calgary Support Underemployed Income Imputation lawyers deal with cases of underemployed or even unemployed paying and receiving spouses involved in Calgary spousal support and Calgary child support cases. Our Calgary Support Underemployed Income Imputation lawyers note a more stringent test to impute income for spousal and child support in Calgary than in BC and Ontario. In today’s blog, Peter GraburnTel 403 444 5503 one of our senior Calgary MacLean Law family lawyers explains how it works.

Calgary Support Underemployed Income Imputation Lawyers

Imputing Income to Unemployed or Under-Employed Support Payors in Alberta

People often ask us: How do I impute income for child and spousal support in Calgary? In Alberta (as in the rest of the country), if your ex-partner is regularly employed, it is relatively straightforward to determine their appropriate income on which they should pay child support or spousal support – take their total income before taxes (as set out in Line 150 of their annual Income Tax and Benefit Return or Notice of Assessment) and apply it to the Federal Child Support Guidelines (FCSGs) table for child support purposes, or the Spousal Support Advisory Guidelines (SSAGs) for spousal support purposes.

But what if that income does not accurately reflect the true amount of money available to your ex-partner or, as in some cases, they are not earning as much as they could or should be earning? The first situation often involves business income or expenses that may be taken into account (more on this in another blog!). The second case may be where your ex-partner (as previously set out in our previous post on this topic – Calgary Imputed Income Support Lawyers ) either:

  • refuses to work;
  • changes jobs from a better paying to lower paying but more personally rewarding job;
  • only works a few hours a week;
  • starts their own business although well-paying jobs exist for them;
  • refuses to take a job because they think they should work a better higher paying job that doesn’t yet exist for them;
  • wants to do volunteer work or stay home until children are out of high school instead of supporting themselves, etc.

In these situations, the Court may find your ex is intentionally unemployed or underemployed. In either case, the Court may then go on to “impute” (assign) to them a higher income than set out on their Line 150 for either child or spousal support purposes (even though they are not actually earning that income).

Calgary Support Underemployed Income Imputation Lawyers – Explain The Test

But what is the legal authority and standard “test” to determine if someone is intentionally unemployed or under-employed? It varies from province to province. The legal authority to impute a different income to a child or spousal support payor other than their standard Line 150 income is found in Section 19(1) of the FCSGs:

Imputing income

19 (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:

  1. 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 FCSGs apply in all provinces of Canada, but the way they are interpreted and applied by the Courts of each province varies from province to province. Click here to see a government summary on imputation from the SSAG.  In Alberta, the leading authority on s. 19(1)(a) of the FCSGs is the case of Hunt v. Smolis-Hunt (2001, ABCA 229), where the Alberta Court of Appeal developed the following principles regarding imputing income in the case of un/under-employment:

● The Court should establish fair levels of support (from both parties) in a predictable and consistent manner (para. 60 & 61);

● The Court will require evidence (either proven or inferred) that the payor has pursued a deliberate course of conduct with the specific intent to evade their support obligations (para. 42 and 73), and;

● The payor is entitled to pursue work that provides not only money but also a sense of self-worth and emotional well-being (para. 68).

The Alberta Court of Appeal recently clarified its position in the case of Keating v. Keating (2017 ABCA 428) when it held that the conduct of the payor and overall circumstances of the situation must permit the inference that the payor took unreasonable actions to undermine or avoid their support obligations (para. 11).

BC Test

This very “high bar” test in Alberta that one must produce evidence of bad faith or intent to evade or minimize support in order to impute income in this situation has not been followed in other provinces: ie. from B.C.:

  • “With deference to the view of the majority in Hunt … intent to evade or minimize the payment of child support is not required for a finding of intentional underemployment or unemployment, although if that intent exists that finding is required.  What matters under the Guidelines is … whether the parent is earning what the parent is capable of earning” (Barker v. Barker, 2005 BCCA 177);
  • “Where a spouse is found to be intentionally underemployed or unemployed, section 19(1)(a) of the Guidelines permits the Court to impute income to that spouse … The focus of this analysis is whether the parent is earning what the parent is capable of earning …” (M.W.B. v. A.R.B., 2011 BCSC 1663);

Ontario Test

and similarly from Ontario:

“It is not necessary to establish bad faith or an attempt to thwart support obligations before imputing income.  A payor is intentionally underemployed if they earn less than they are capable of earning having regard for all of the circumstances” (Smith v. Smith, 2012 ONSC 1116).

Is Test Too Strict?

In Alberta, the Courts have found that payors of child and spousal support do not have a specific duty to maximize their employment income on which such support is based (as long as those employment decisions are reasonable) – they are allowed to make their own employment decisions as long as those decisions are not specifically designed to defeat the payment of support.

So, while it looks like other provinces than Alberta take a less strict and more reasonable approach to imputing income to an under or unemployed ex-partner for child or spousal support purposes, does that mean one should not attempt this in Alberta? – no.  But it does mean one must have very strong evidence to support that the ex-partner is un/under-employed for the purpose of avoiding their obligation to pay support.  Factors the Courts will look at to determine whether someone is intentionally un/under-employed may include:

steps taken to obtain employment according to their age, education, skills and work experience, job opportunities, ability to be trained, other obligations, work availability and health;

the payor’s past earning history and the amount of income that the party could reasonably earn if they worked to capacity;

the number of hours the payor could work in light of competing obligations;

the hourly rate the payor could reasonably earn;

the availability of work within the payor’s field and the industry standard of salary, benefits and other compensation, and;

the parties’ standard of living when the parties were married.

Calgary Support Underemployed Income Imputation

Our top-rated* Calgary Support Underemployed Income Imputation lawyers assist our clients in assembling the evidence required to establish that their ex-partner is intentionally under or unemployed for the purpose of evading their support obligations and advise their clients as to whether this evidence is strong enough to successfully have a Court impute a higher income to their ex-partner. Click here to meet with us.

*Top Choice Award (2014, 2016, 2017 2018, 2019), Top rated reviews on Google, Yelp, threebestrated, lawerratingz.com. Read more about our awards