Section 37(2) of the Family Law Act authorizes the court to impute income for support purposes if an individual is intentionally unemployed or earning less than their earning capabilities. The purpose of imputing income is to maximize objectivity, predictability, and consistency in the joint and ongoing obligation of parents to support their children.
Section 19(1) of the Child Support Guidelines includes a non-exhaustive list of nine enumerated categories to impute income:
- the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child or by the reasonable educational or health needs of the spouse;
- the spouse is exempt from paying federal or provincial income tax;
- the spouse lives in a country that has significantly lower income tax rates than those in Canada;
- it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines;
- the spouse’s property is not reasonably utilized to generate income;
- the spouse has failed to provide income information despite legal obligation to do so;
- the spouse unreasonably deducts expenses from income;
- the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment, business income or that are exempt from tax; or
- the spouse is a beneficiary.
Oftentimes, gifts are not included as income. However, the Court of Appeal outlined that the regularity, duration, and exceptionality of a gift may result in an imputation of income where the gift has contributed to the lifestyle and standard of living of either party and their children (See: Bak v. Dobell, 2007 ONCA 304). A party may file a motion to change with respect to the support obligations granted in the previous court order. The court requires a material change in circumstances to amend a prior court order. Working in the same industry or maintaining the same accounting and tax practice will likely result in the court continuing the income imputed at the original amount.
The Ontario Court of Appeal has made it clear that imputing income is one of the methods by which the court gives effect to the obligation of parents to support their children. To meet this obligation, the parties must earn what they are capable of earning. The fundamental obligation of a parent to support their children takes precedence over their own interests and choices.
At Blackburn Lawyers, we strive to provide efficient and effective services for every family law matter. If you and/or a loved one has any questions regarding the imputation of income, please contact our family law lawyers today.
This blog sets out a variety of information relating to law that is to be used for educational purposes and is not legal advice for your matter. The author (Adriana Totera) does not intend for this blog to be a source of legal advice.
Written by: Adriana Totera
* Please note that the information in this article is not intended as legal advice, but rather as a general overview on the subject. If you are seeking legal advice, please consult with a lawyer.
