The Nova Scotia Supreme Court (Family Division) has been clear that child support is the right of the child, and not the parent. As such, parents have an obligation to support their children commensurate with their earning potential and capacity. Upon separation, this gives rise to a child support obligation. More information on the concept of child support can be found in our previous child support blog.
However, clients often wonder what happens if a parent quits their job to avoid paying child support. Or what happens when a parent chooses to go back to school? Or quit their high-earning job to start their own business? How does this affect child support? Our family law lawyers explain.
Advancing a Claim to Impute an Income
Because child support is based on the payor’s income, changes to employment and income may create concern that a payor is not supporting their children to the fullest extent they would ordinarily have been able to. In some of these circumstances, the recipient parent may wish to advance a claim to “impute” an income to the payor parent. In these kinds of applications, a parent can ask the Court to attribute to the other parent an income they are not actually earning. The payor parent would then pay child support based on the imputed income – not their actual income.
Circumstances in Which Income Can Be Imputed
This is only one example of an “imputed income.” Under s. 19(1) of the Federal Child Support Guidelines, there are many different circumstances in which incomes can be imputed. Section 19(1) states:
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:
(a) 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;
(b) the spouse is exempt from paying federal or provincial income tax;
(c) the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;
(d) it appears that income has been diverted, which would affect the level of child support to be determined under these Guidelines;
(e) the spouse’s property is not reasonably utilized to generate income;
(f) the spouse has failed to provide income information when under a legal obligation to do so;
(g) the spouse unreasonably deducts expenses from income;
(h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and
(i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.
Claims for imputed income are very fact specific, and require evidence to advance. The family law lawyers at Lenehan Musgrave LLP can help you navigate whether such a claim would be appropriate in your circumstances, and how best to present this to the Court. Learn more about booking a family law consultation or complete the form below to book yours today…
