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Husband Downgrades Job, Then Quits Altogether – But Support Stays the Same

Husband Downgrades Job, Then Quits Altogether – But Support Stays the Same

This was a case which shows that a voluntary change in circumstances – including a significant reduction in income – does not necessarily mean that a parent’s obligation to pay child support will be reduced correspondingly.

The husband and wife met while in college and got married. They had three children, ranging from 12 to 17. At the beginning of the marriage, the husband had a job with General Motors Acceptance Corporation (GMAC) earning about $30,000. The wife never worked. By the end of the marriage, about 15 years later, the husband was earning about $86,000. At that time, the parties agreed as part of their separation that the husband would pay spousal support of $1,500 per month, and $1,350 in monthly child support.

The husband remarried in the summer of 2007, and filed for bankruptcy a few months later. He then voluntarily quit his job with GMAC and moved to his new wife’s hometown in New Brunswick, taking a job at a car dealership which paid $52,000 per year. Prior to this move – and although he was evasive to the court about his new wife’s finances – he indicated that she had been working at GMAC earning “less than $80,000”, but there was further evidence that she was later let go from that GMAC job and had been earning $100,000 elsewhere. Furthermore, he did not provide evidence as to what the new wife was now earning in New Brunswick, but it appeared that she had purchased a very comfortable home there, in which the both of them lived.

Nonetheless, the husband brought a motion to reduce his existing child support obligations to his first wife, and to end his liability to pay her spousal support altogether. Indeed, before the hearing the husband unilaterally stopped paying spousal support completely, and self-adjusted his child support payments to reflect his new $52,000 income. (And note that as part of a related interim hearing, the court ordered the husband to continue paying both child and spousal support at the old levels, which he failed to do.)

Meanwhile, the husband was let go from his employment in New Brunswick due to a change in the company’s ownership; he began collecting Employment Insurance benefits of $485 per week. This prompted him to stop making any child support payments whatsoever, despite him later admitting to the court that he owed $447 per month, based on his new level of E.I.-based income.

Still, the husband came to court to ask to have his child and spousal support obligations reduced to reflect his change in income. At this point, he was actively looking for work, but was limiting his search to Atlantic Canada.

The court refused his request. First of all, Ontario law gives the court the right to impute income where a spouse is “intentionally under-employed”, meaning deliberately choosing to earn less than he or she is capable of. In this case, given that the husband’s employment decision resulted in a significant reduction in child support, it needed to be justifiable in a compelling way.

This requirement was not met here: the husband had considered only his own interests.

First of all, it found that the husband’s decision to quit his employment with GMAC was entirely his own. It said:

Regarding his decision to quit GMAC Mr. Thompson said that he had heard unofficially from friends and managers that his job was in jeopardy. He claimed that his work performance was suffering because the stressors noted above were weighing on him. Without a vehicle he was often arriving late. However, there was no independent evidence from GMAC that Mr. Thompson’s job situation was indeed insecure. Mr. Thompson did not suggest or provide any evidence that he had been subject to discipline. While we heard that there was financial turmoil with General Motors around that time, there was no evidence that anyone at GMAC or its successor lost their jobs. Mr. Thompson had 22 years of seniority at the time he quit.

Next, citing the husband’s understanding that his children needed only to be “minimally covered” by his child support payments, the court found that the husband failed to appreciate that he had a legal obligation to support his children and that he could not avoid that duty by a self-reduction in income. Furthermore, at the time he made his decision to quit, he had no substantial debt, no other dependents, a good-paying job, and was at minimum sharing living arrangements with a new wife who earned well and owned a home mortgage-free.

The husband had unilaterally reduced the child support payments and was found by the court to be intentionally under-employed. As a result, the court imputed an income of about $86,000 to him, which was in accord with his prior earning levels, and ordered him to continue paying both child support and spousal support accordingly (although it did allow a $500 monthly reduction in spousal support due to other factors).

For the full text of the decision, see:

Thompson v. Gilchrist (2012), 2012 ONSC 4137 http://canlii.ca/t/fs2d2

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at www.RussellAlexander.com.

One Comment
  1. The husband should have argued that the move was motivated by his desire to stay with his new wife, who moved for her own career related reasons, and he merely followed. Nevertheless, if he’s still earning any money at all, the court isn’t likely to by sympathetic to him trying to duck out of child support obligations. If he had limited the argument to spousal support only, it might have gone better for him.

    I wonder how things will go if he’s still unemployed a year from now and makes another application. If the household’s only income is that of his new wife, it doesn’t seem fair to force her to indirectly subsidize her husband’s previous spouse.

    October 12, 2012

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