Imputing Income for Child Support in BC

Imputing Income to a BC Underemployed Parent

Imputed income is any income attributed to a person, even though the individual may not have earned that income.

Most parents in British Columbia are happy to fulfill their legal obligation to help with the costs of raising a child. However, in some cases, the support obligation is disputed.

In child support cases, the court may impute income to a parent who is intentionally underemployed or unemployed without a good reason, thereby avoiding paying the necessary child support amount. In other words, the parent is not earning as much as he / she could be.

It is helpful to understand more about imputed income—and what the BC courts can and can’t do if a parent is unreasonably underemployed or unemployed.

When can the BC courts impute income?

As per the federal Child Support Guidelines, the B.C. courts can impute income to a parent who is:

“Intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse”.

The provisions of this legislation apply to either or both spouses but the burden of proof rests with the party seeking a court order to impute income to another.

If income is imputed, child support calculations will be based on the higher income and result in a higher monthly child support obligation than would apply if based purely on the current income received.

Imputed income can affect both monthly support amounts and special expenses and extraordinary expenses in British Columbia.

How is “underemployment” established in BC?

One person’s idea of underemployment may differ from another’s. Fortunately, the B.C. courts provide a simple test to assess whether a parent is underemployed.

To impute income, a court simply needs to find that the parent is capable of earning more and can reasonably do so, based on the circumstances. No finding of bad faith or intentionally evading or minimizing child support obligations is necessary.

A spouse’s capacity to earn income will be assessed based on age, education, health, work history, and work availability, including the individual’s ability to be trained to work.

From past case history in B.C., a set of guiding principles for imputing income has been established:

• Both parents have an ongoing legal obligation to support their children and must earn what they are capable of earning.
• Parents must seek employment if they are healthy and have no reason not to work.
• To impute income, courts must consider what is reasonable, based on the age, education, experience, skills, and health of the parent, as well as the availability of work, ability to relocate, and other parental obligations.
• Limited skills or experience are not valid reasons to shirk the pursuit of active employment, even if the work is not well paid or fulfilling.

Typical examples where income is imputed in BC

Income is typically imputed to parents in situations where they are voluntarily underemployed or unemployed, have a history of earning a higher income or are hiding assets.

Typically, income is imputed in child support cases when:

• A parent quits a job without a good reason.
• A parent gets fired and does not seek new employment or moves to part-time work without a good reason.

Besides underemployment or unemployment, income may be imputed in child support cases for other reasons, such as:

• Receiving tip income but not reporting it on tax returns (e.g., in service industry employment)
• Not reporting company benefits from self-employment (e.g., company car, paid meals, cell phone, etc.)
• Not fully disclosing assets (either spouse) during divorce proceedings.

How do step-parent obligations impact income imputation for an underemployed parent?

If a child is raised partly by a step-parent, the obligations of that step-parent to financially support the child are one factor of many that can impact child support cases in B.C.—and they may affect a court’s decision whether to impute income to an underemployed parent.

The court assesses the overall contributions towards raising a child, seeking to make decisions in the child’s best interests. The calculation of a parent’s support obligation may be affected if income is provided by a step-parent but judges will consider this on a case-by-case basis.

Is underemployment due to parenting obligations reasonable?

“Underemployed” parents who must provide childcare at home are unlikely to have income imputed by the B.C. courts, especially if the child is young.

As the child ages, however, a parent will need to provide compelling reasons why staying at home remains necessary. Otherwise, if the other parent raises this with the courts, the stay-at-home parent’s unavailability for employment may be considered unreasonable by the courts, and income subsequently imputed.

Can my income be imputed if I change jobs or careers in BC?

The B.C. family law system understands that people can change direction in life. People change careers, relocate or move to part-time work for a variety of reasons.

However, such major changes can result in income being imputed if a parent’s income is reduced due to unreasonable and voluntary decisions. The court will weigh up all of the relevant factors in the case before doing so.

For instance, if a parent develops a long-term chronic illness that impacts the ability to work, changing to part-time employment would usually be deemed reasonable. Even if the parent accepts a temporarily reduced income with a view to long-term career prospects, this may be acceptable if suitable evidence is provided to the court. However, if the reduced income persists with no improvement in career prospects over a period of time, the courts may then impute income to the parent.

Ultimately, the court will seek to provide a level of child support that meets the child’s needs but is commensurate with the parents’ means and abilities. If that means imputing income to one or both parents, the court has the power to do so.

Child support can be complex. If you need legal assistance with any support matters in the Langley area of British Columbia, DSG Family Law offers a free initial consultation to assess your situation and outline your legal options. Speak with our skilled and compassionate Langley family lawyers today.