Imputation of Income

A common issue in support cases is whether one party should have income imputed to them (whether they should pay support based on a number higher than their actual income). A support payer has an obligation to seek and maintain full-time employment commensurate with their skills and abilities. If they do, it will be difficult to impute income to them unless there is evidence they are deliberately earning less than possible to decrease support payments.

If a payer with income imputed to them becomes unemployed, they can apply for an immediate reduction of support to reflect their actual income, but this won’t continue indefinitely. They will need to show they are making reasonable efforts to find employment, and if the duration of unemployment is prolonged, they may have income imputed to them. Parents with limitations on their ability are required to make efforts to earn what they can to support their children and/or ex-spouse.

Income may also be imputed when the payer is self-employed. These parents have a tax advantage in terms of what they can deduct from income, such as travel and meal expenses. A judge may add back deductions if he/she feels they are “unreasonably” high (even if acceptable to CRA for tax purposes). Even if they are “reasonable”, a judge may still disallow deductions to ensure child and/or spousal support is maintained at a level which reflects that parent’s ability to pay.