Voluntary Job Changes, Child Support, and the Imputation of Income

If I quit my job, do I still have to pay child support?

What if I leave my boring office job to start my (lower-paying) dream business? Will my support payments go down?

When it comes to determining what amount of support a parent or spouse should pay, courts will look not only at what that person’s income is on paper, but also what he or she is capable of earning. If a support payor is making less than what the court thinks he or she should be earning, the court may impute income to that person. In other words, the court may pretend that that person’s income is higher than what he or she says it is and order support based on that higher amount.

Section 19 of the Child Support Guidelines authorizes courts to impute income to a parent in a number of circumstances, including where that parent is “under-employed or unemployed”, unless that under-employment or unemployment is required due to the needs of a child or the “reasonable educational or health needs” of the parent. In Drygala v Pauli, (2002) 61 OR (3d) 711, the Ontario Court of Appeal set out a three-part test to determine whether this section should be applied:

  1. Is the parent intentionally under-employed or unemployed?
  2. If so, is the intentional under-employment or unemployment required by virtue of his or her reasonable educational or health needs?
  3. If the answer to question 2 is “no”, what income should be imputed?

Returning to the questions at the start of this post, the answer to the first (“If I quit my job, do I still have to pay child support?”) depends on the reason for quitting. If, for example, the support payor has quit a job in order to return to school and re-train for a more lucrative career, the court might find that his unemployment is justified and reduce or suspend child support. If, on the other hand, it is clear that the payor has quit a job simply because he does not want to pay support, the court will impute whatever income it believes he is capable of earning. In doing so, the court will consider numerous factors such as his past income levels, education, work experience, and other credentials.

While income is likely to be imputed if there is evidence of “bad faith” – that is, if there is evidence that the payor is simply trying to evade his or her obligations – there is no requirement of bad faith. This means that even if the reasons for a reduced income are completely innocent, the court may still impute income if the payor’s underemployment is not the result of his or her reasonable educational needs or the needs of the child(ren). Accordingly, there is a good chance that the answer to the second question at the start of this post will be “no”. If a support payor quits her office job, where she earns, say, $100,000.00 per year, to set up her unrelated dream business with a net income of $20,000.00 a year, a judge may very well deem this decision unreasonable and order support to continue based on an income of $100,000.00.

To put all of this simply, if you are obligated to pay support, think carefully before you quit your day job, or you may find yourself paying support based on an income you no longer have.

 

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