Calculation of Child Support When a Parent is Underemployed

When a parent is underemployed and earning far less than their capacity, a Court will impute income to calculate child support.  This issue was examined by an Ontario Court earlier this summer. The warring parents in that example provide a great look at the analysis required for determining custody. This blog post is limited only to the analysis on the calculation of child support.

What Does Underemployed Mean for Child Support Purposes

This couple lived together in a common-law relationship between 2006 and 2008. They had one child together who was born in 2008. After birth, the mother and child lived with the grandmother and the father remained involved with the child. Court proceedings were first initiated in 2011 and continued until now.

The mother is currently 47 years old and works for the federal government. The father is 48 years old and is a head chef in a local restaurant. Since a Consent Order in 2012 the father was paying child support based on an imputed income of $30,000 per year. The father provided tax returns which showed income between $0 and $13,000 between 2012 and 2018 and stated the reason for the low income was failed restaurant ventures.

The father was trained as a chef when the child was born and he has an obligation to support his child financially. In this case the judge found that considering his age, skills and experience, it was unreasonable for him to continue with failed business ventures. The alternative was to obtain a steady income so that he could support his child.

This is an example of underemployed. This means that a parent is earning less income than what would be expected when age, skill and experience is considered. There are far more egregious examples of parents who deliberately remain unemployed to avoid support payments. This is a good example of a parent who was working, but not earning enough.

Can Retroactive Child Support Be Awarded When a Parent is Underemployed?

In this case, the mother sought retroactive child support back to the date of separation (12 years ago). The Supreme Court of Canada has provided direction on this issue from a decision in 2006. There are two guiding principles when determining retroactive child support. First, both parents have an obligation to ensure proper support for the child’s benefit. The second guiding principle is that the payor parent has certainty in their debts.

There are then four factors to consider. First, whether the recipient parent had a reasonable excuse for not requesting child support earlier. Second, the conduct of the payor parent. Third, the circumstances of the child and fourth, the potential hardship for the payor parent.

In this case, the evidence was that the father paid child support for the first few years after birth. The mother never told the father she was seeking more support and there was no evidence that the father was putting his interests over the interests of his child. Based on all of this, the Judge decided that this was not an appropriate case for retroactive child support.

Child Support Arrears

In this case, the father went to Court in 2017 and obtained a Court Order rescinding the $11,500 he owed in child support. The mother did not attend Court, because she said she didn’t know about the application. The day after the Court Order was issued, the mother said she received the father’s application.

The mother asked the Court to set aside the earlier Order and have the father pay the $11,500. The Judge looked at the circumstances and found the way the events unfolded were unfair for the child. The father was again ordered to pay the $11,500 in child support that was owing.

What to do if you Have Child Support Arrears?

Child support arrears means that you still owe child support. If you can’t pay child support one month, it still remains owing. The longer you go without paying child support, the larger the debt becomes and this debt does not simply go away when you ignore it.

If you have significant child support arrears owing, you may want to get some legal advice. There may be an opportunity to lessen the amount, but whether or not this can happen is based on a number of factors. Most of the factors are based on your conduct. What is your financial situation and why you are in that situation is important. There is a difference between conducting yourself against the interests of the child and doing everything you can to support your child.

Is Your Ex-Spouse Underemployed?

If you believe your ex-spouse is deliberately underemployed to reduce child support obligations, you may want to seek legal advice. Some analysis must be done on that person’s age, skill and experience. As well, some thought must be put to the local economy and the ability to easily obtain employment. In these times of social distancing, though a parent may not be earning what they have in the past, this does not mean it is intentional.

If you have questions on child support, spousal support, access, custody, division of property or other family law matters, please contact Hearty Law. Alternatively, email toronto@heartylaw.ca or ottawa@heartylaw.ca.

Hearty Law serves Toronto, Ottawa and surrounding communities.