An Ontario court recently found that a father owing child support arrears had been intentionally underemployed and retroactively adjusted his child support obligation based on the imputed income of $21,300 annually.
The father brought a motion to change child support that he had previously been ordered to pay, seeking that the arrears owing (more than $11,000) be rescinded or reduced. The court had previously imputed an income of just over $35,000 to the father and required him to pay child support of $332 monthly, as outlined in the Child Support Guidelines.
The father is 29 years old and testified that he had been working as a baggage handler at the airport, earning approximately $18,000 annually until he was injured in a car accident in 2008. After the accident, he could no longer perform anything other than light duties at his job due to the injury and claimed that he was fired as a result. No evidence was provided substantiating this position. The child in question (Ashanti, aged 9) was the only product of a relationship he had had before his current marriage.
Following the end of his relationship with Ashanti’s mother, the father had married and had two other children with his wife. He claimed that he and his wife had come to the agreement that he would be a stay-at-home dad while she finished school.
The argued that he is a talented musician and, at the time of the hearing in this matter, was pursuing a music career when not caring for his two children. He testified that he was not making any money yet, since he had been giving away free CD’s of his music and performing for free “in order to become better known.”
The father filed five years of tax returns showing that he had earned between $0 and approximately $18,000 during each of those years. He had also received $10,000 in a lawsuit stemming from his car accident, but had quickly burned through that money, taking a vacation and spending money on producing music videos.
He argued that he did not make a sufficient enough income to pay any child support for Ashanti under the Guidelines.
We’ve previously blogged about imputing income. Imputing income is one way in which a Court recognizes and gives effect to the ongoing obligation of parents to support their children. In order to comply with this obligation, both parents must earn what they are capable of earning, and if they fail to do this, the Court can find that they are intentionally under-employed or unemployed.
The Ontario Court of Appeal has set out a three-part test to determine whether income should be imputed on a parent:
- Is the parent intentionally underemployed or unemployed?
- If so, is the intentional underemployment or unemployment required because of the parent’s reasonable educational needs?
- If the answer to question #2 is no, what income should be appropriately imputed in the circumstances?
Is the parent intentionally underemployed or unemployed?
In answering this question, the Court noted that there is no need to find a specific intent to evade child-support obligations in order to impute income. A parent is underemployed if they choose to earn less than they are capable of earning.
The Court stated that
… persistence in unremunerative employment may entitle the court to impute income. A parent cannot be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations. As a general rule, a parent cannot avoid child support obligations by a self-induced reduction of income.
Here, the father argued that he was not earning income because:
- He had child-care responsibilities for his other children;
- He wanted to concentrate on his music career;
- His license had been suspended by the Family Responsibility Office (the FRO suspended it when he had failed to pay the arrears owing on the child support payments to Ashanti);
- He was experiencing residual pain from the car accident.
He further argued that he would be willing to pay child support if he knew “for sure” that the child was his (though, notably, had made no attempts to obtain DNA testing). He also argued that it was “unfair to expect him to work and to pay child support when [the mother] was not working and was collecting social assistance.
The Court found that:
…[the father] is deliberately underemployed. He is choosing to earn less income than he is capable of earning. He is choosing to pursue a speculative music career at Ashanti’s expense. He has no desire to pay child support for Ashanti and appears quite content with the status quo (provided that he can get his driver’s license back).
If so, is the intentional under-employment or unemployment required because of the parent’s reasonable educational needs?
Once under-employment is established, as it was here, the onus shifts to the parent who owes back child support in order to establish a reason for their under-employment.
This can come in the form of medical evidence showing that the parent is unable to work; however, in this case, the father provided very dated and undetailed medical evidence (nothing more recent than 2008) that failed to establish that he had any medical reason not to work full-time.
The Court also considered the father’s obligations to his second family and his two other children. In some cases, Courts will accept that parents reduce work hours to care for children in a second family; however, in this case, the Court found that it was not appropriate to accept the father’s argument that his responsibilities to his other children insulated him from his obligations towards Ashanti. His choice to stay home had not been reasonable. He had been aware of his obligations to his first child when he chose to get married and have more children. There had also been no evidence provided that would indicate that his choice to remain at home would improve the financial circumstances of his second family.
Overall, the Court found that the father did not successfully meet his onus on this stage of the test.
What income should be appropriately imputed in the circumstances?
At the last stage of the analysis, a Court must consider the parent’s capacity to earn income in light of factors such as their employment history, age, education, skills, health, standard of living during the parents’ relationship, and available employment opportunities.
Here, the Court noted that the father:
- Had worked steadily until 2008;
- Had earned, at least, minimum wage;
- Is young and “very personable”;
- Only has a Grade 10 education;
- May have some minor medical limitations and likely cannot perform work that requires heavy lifting;
- Has some child-care obligations that might limit his ability to maximize his income and should not be expected to work overtime;
- If he is as talented a musician as he claims, he should be able to obtain work as a freelance musician.
The Court found that the father should be earning at least a minimum wage income (i.e. $21,300 annually), and imputed that amount to him for the purpose of assessing child support obligations going forward.
A Court’s decision to reduce child support arrears is discretionary. If the parent responsible for child support can establish a change in circumstances during the time that arrears were accumulating, rendering them unable to pay the full amount for a substantial period of time, the court might provide relief to that parent.
Here, the Court considered that it was “more probable than not” that the father was only able to earn minimum wage from the time that his support obligations began to accrue, but that he had not provided the Court with this information when he should have.
Various statements he made during the hearing made it clear that he did not feel that he should have to support Ashanti. The Court noted:
[The father’s] behaviour has been blameworthy. He refused to pay child support and completely ignored the order. He has financially abandoned this child. When he received his settlement of $10,000 in 2011, he went on vacations and depleted the settlement within a few months. He has not come to this court with clean hands. The court cannot condone such behaviour and needs to send a clear message that there are consequences for acting this way.
The Court ultimately retroactively adjusted the father’s support obligation based on the imputed income of $21,300 annually, beginning one year prior to the day he filed his motion to change.
If you have questions about child support or your obligations towards your children following a separation, speak with Jason P. Howie, experienced Windsor family law lawyer, at 519-973-1500 or contact us online. We serve clients in Windsor, Essex County and throughout the region.