I. What is Imputed Income?
After a couple separates/divorces, the parent without decision-making responsibility is usually required to pay child support. A judge will impute income when they find that the income the non-custodial parent presents is not a fair reflection of what they could be earning, and assign an amount they must pay for child support. The payer must ensure that they fulfill their duty in seeking employment that will maximize their income to provide adequately for the child. The Ontario Court of Appeal set out a 3 part test to decide on whether to impute income. First, a judge will look at employment and whether or not the payer is intentionally unemployed or underemployed in order to pay less child support. Next, a judge would look at whether the above mentioned employment status stems from a medical condition, educational needs or another accommodation required to fit the needs of the child. Finally, if the employment status is unjustified, then an income must be imputed at a reasonable amount.
II. When may (or may not) a judge impute income?
A. Underemployment When it is clear that the child-support payer is deliberately earning less than reasonably based on their skillset and education, a judge may choose to impute income. For example, the non-custodial parent quits a high paying job after separation to work an entry-level position, or moves to another province and earns less income than before. The latter is true in the 2018 Edmonton-Ontarian case of Switzer v. Switzer. The defendant, Mr Switzer, deliberately terminated his job in Alberta to move to Ontario where he continued his work for much lower income, thus reducing his spousal and child support by approximately 30%. The court of the Queen’s Bench (the equivalent of the Superior Court of Justice) concluded that it was not appropriate to impute income to Mr Switzer based on 2 reasons; number one reflected his reasoning for moving, being to further his relationship with his new partner in Ontario, and the second reason being an uncertainty with his future career due to a notice of staff reduction at his company. In this case, imputing income was denied for the plaintiff as the defendant made the employment decision to carry on with his life and job in Ontario without any malicious intent.
B. Dishonesty about income In the 2020 cross-appeal case Abbas v. Albohamra, a married father and wealthy business owner is taken to court by the appellant, his second wife. The respondent refused to disclose how he decided his salary and his companies revenue considering that he is able to live a wealthy life and provided for both wives. The respondents ability to live his expensive lifestyle with his first family with 2 luxury vehicles and owning property valued at $2,780,000 while simultaneously 19/10/21 Jazmine Noori Persaud Hussain LLP - CO-OP paying for his ex wife’s living expenses resulted in both courts agreeing upon an imputed income of $420,000 instead of his requested $105,000 per annum.
C. Unemployment In the complex case of Nour v. Youssef, the applicant, Ms Nour, requested that her ex-husband pay an imputed amount of child and spousal support. Mr Youssef, the defendant, worked as a foreign pilot for Korean airlines and applied for permanent residency in Canada. Due to the pandemic, his work began laying off foreign pilots and he requested a leave of absence to fulfill his 720 day requirement to remain in Canada. On top of his steady income loss, he developed Tinnitus which prevented him from passing any medical examination in his attempt to advance to becoming a Canadian pilot. His medical condition further supported that his unemployment was unintentional as it prevented him from flying as a pilot. The court found that his persistent attempts in seeking residency and earning a Canadian pilot position on top of his many hardships were reasonable grounds in rejecting the applicant's request to impute income.
Works Cited:
Case Law Abbas v Albohamra, 2020 ONSC 591
Nour v Youssef, 2021 ONSC 2717
Switzer v Switzer, 2018 ABQB 373 Online materials Andrew Feldstein, “Imputation of Income” online (blog): Feldstein Family Law Group
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