IMPUTATION OF INCOME
A further issue that can arise in support cases is whether or not one party should have income imputed to them (i.e. whether or not they should pay support based on something higher than their actual income). Usually this applies to the party paying support. The issue that the court must decide is whether or not that party is deliberately avoiding their support obligations. What this means is that a party who is required to pay support has an obligation to seek and maintain full time employment commensurate with their skills and abilities. It does not, however, mean that the payer of support has to spend every waking hour working so as to maximize their income. As long as the payer is working full-time, it will be difficult to impute income to them, unless there is evidence that they are deliberately earning less than they could so as to minimize support payments.
When a payer becomes unemployed, they can apply for an immediate reduction of support to reflect their actual income, but this will not be allowed to continue indefinitely. They will have to show that they are making reasonable efforts to find employment and if the unemployment is prolonged, they may have income imputed to give them an incentive to find employment. Alberta courts have stated that short of suffering from a mental or physical disability, a non-custodial parent must always pay some support. Even parents who do have some limitations on their ability will still be required to make efforts to earn what they can in order to support their children and/or spouse.
Another context in which income can be imputed to a party for child support and/or spousal support purposes is where the parent paying support is self-employed. Self-employed parents have some tax advantages in terms of what they can deduct from their income such as fuel and mileage for their vehicle, travel and meal expenses, etc. A judge may, but is not required to, add back some or all of the deductions made from income if he/she feels that the deductions claimed are unreasonably high (even if they are accepted by CRA for income tax purposes) or even if they are reasonable so as to ensure that child and/or spousal support is paid at a level that truly reflects that parent’s ability to pay.