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Worried About Having Your Income Grossed-Up for Support Purposes? Here’s Some Court-Inspired Insight

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Worried About Having Your Income Grossed-Up for Support Purposes? Here’s Some Court-Inspired Insight

As we have written before (such as “Court Disbelieves Father Claims About Income for Support Purposes – Concludes Lack of Job Search Means Father Already Earns a Good Living”;  and “Husband Downgrades Job, Then Quits Altogether – But Support Stays the Same” about the concept of “imputed income” in spousal and child support calculations, where the court decides that a paying spouse is deliberately under-employed, all as a means of artificially reducing the income on which support obligations are calculated. The court’s remedy – which is authorized in Canadian family legislation – is to gross-up or “impute” income to the support-paying spouse, to bring it in line with the true reality of that person’s income or income-earning capacity (as the case may be).

Given the case-by-case, fact-driven nature of spousal and child support determinations, the precise mechanics of a court’s conclusion to impute income can be difficult to generalize. However, in a decision called Smith v. Smith, Justice Chappel took a stab at setting out some of the factors that should guide family courts in deciding whether to impute income in any given case.

Justice Chappel identified the following points and factors as being relevant:

General points:

• Where any party fails to provide full financial disclosure relating to their income, a court is entitled to draw an adverse inference of that lack of disclosure, and to impute income to him or her.

• Similarly, a court may impute income in a situation where it finds that a paying spouse is deliberately under-employed.

• In order for a court to impute income, it is not necessary to establish bad faith on the part of the paying spouse, nor that there was an attempt to thwart his or her support obligations.

• The amount of income that the court imputes is a matter of its own discretion; however, there must be some basis on the evidence for the amount that the court has chosen to impute.

Respecting under-employment by the paying spouse:

• A paying spouse has a duty to actively seek out reasonable employment opportunities that maximize his or her income potential in order to meet the needs of dependants.

• A self-induced reduction of income is not a basis on which a paying spouse can reduce his or her support obligations.

• Likewise, courts will not excuse or reduce the support obligations of an under-employed person who has persisted in un-remunerative employment, or who has pursued “unrealistic or unproductive career aspirations”.

• “Intentional under-employment” occurs where the paying spouse earns less than he or she is capable of, having regard to all the circumstances, and with the court assessing what is reasonable in the situation (taking account the age, education, experience, skills, health, and past-earning history of the paying spouse, as well as the amount he or she could reasonably earn if employed to full capacity).

For the full text of the decision, see:

Smith v. Smith, 2012 ONSC 1116

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

Do You Have an Obligation to Support a Child Who Wants Nothing to Do With You?

 

Do You Have an Obligation to Support a Child Who Wants Nothing to Do With You?

As I have written in the past, the question of whether, and to what extent, a parent has to pay support in connection with a child is a complex one at the best of times, and can include consideration of support obligations in cases where a child over 18 is still attending school.    An off-shoot of this issue is the narrower question of whether in such scenarios a parent has a continuing obligation to support such a child with whom he or she is not on speaking terms, because the child has chosen to discontinue the parent-child relationship entirely.

A number of Ontario cases address this question.  In a relatively recent one called A.C. v. M.Z., the father claimed his support obligation should be reduced or eliminated because his four children had completely rejected him and he had not seen them for 10 years.   (Although the father claimed that he did not remember all the events leading up to that estrangement, the evidence showed it was punctuated by incidents of verbal and physical abuse:  for example, he did recall being criminally charged with uttering a death threat at his daughter’s first communion).  

To determine whether the father was still obliged to pay support in these circumstances, the court evaluated the prior court cases on this issue, which established the following points:

• As with spousal support, there is nothing in the law that makes the obligation to pay child support contingent on the paying parent and the child getting along or “being nice”.  To the contrary, the law has deliberately removed any fault or conduct component from the equation, and there is no express statutory basis (whether under the Ontario Family Law Act or the federal Divorce Act) to deprive an otherwise dependant adult child of support simply because of a breakdown in the child’s relationship with the paying parent. (See A.C. v. M.Z.)

• However, as part of the general determination of whether it would be “fit and just” to order support for a mature child, a court retains the discretion to consider several factors.  These include the quality of the parent-child relationship. (See Bradley v. Zaba)

• In this regard, the court will consider a child’s unilateral decision to terminate a relationship with one of the parents without any apparent reason, or for reasons that are vague.  (See Law v. Law and Whitton v. Whitton)

• Courts will also consider what steps the rejected parent has taken to promote meaningful involvement or a positive relationship with the estranged child.  Conversely, the court will also consider whether the parent has been significantly involved in the deterioration of the relationship, by behaving in such a way to make it impossible or very difficult for the child to continue it.   (See Smith v. Smith)

• The onus is on a parent complaining of estrangement to show he or she made meaningful efforts to maintain a positive relationship with the adult child. (See Casademont v. Casademont)

• The overriding principle remains the question of whether a child is a “child of the marriage”.  (See Jackson v. Jackson)

Note that the nature of estrangement is also important:  the question is whether it amounts to a “change,” meaning a recent rejection as opposed to a long-standing rift.  (See Athwal v. Athwal)  

Moreover, there must be a “unilateral termination”, and not merely an argument, falling out, drifting apart, or temporary breakdown in the parent-child relationship. (See Farden v. Farden)

Returning to the case of the father who had not seen his four children for 10 years, the court applied the governing factors and found that he still had an obligation to pay child support for them, nonetheless.

For the full text of the decisions, see:

A.C. v. M.Z., 2010 ONSC 6473 (CanLII)  http://canlii.ca/t/2dss8

Bradley v. Zaba, 1996 CanLII 4930 (SK CA) 

Law v. Law, [1986] O.J. No. 2513 (Gen. Div.)

Whitton v. Whitton, [1989] O.J. No. 1002 (Ont. C.A.)

Smith v. Smith, 79 R.F.L. (6th) 166 (Sask. Q.B)

Casademont v. Casademont, (2007) 44 R.F.L. (6th) 287 (S.C.J.)

Jackson v. Jackson, [1973] S.C.R. 205 (S.C.C.)

Athwal v. Athwal, 2007 BCSC 221 (CanLII), 2007 BCSC 221 (B.C. S.C.)

Farden v. Farden, 1993 CanLII 2570 (BC SC), (1993), 48 R.F.L. (3d) 60 (B.C. Master)

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.