Imputing Income for Spousal Support Purposes
In the recent decision in Zigiris v. Foustanellas , the Ontario Superior Court of Justice emphasized the duty on the spouse receiving spousal support to actively seek out reasonable employment. Where that spouse is not employed, but ought to be, income may be imputed to them.
The Marriage Breakdown
The parties were married in January 2002, and separated in February 2014. They had four children who, at the time of separation, ranged in age from 3 to 11.
The parties signed a prenuptial agreement prior to getting married. There was no dispute over whether she had full financial disclosure at the time of signing, as the husband’s assets and liabilities were appended as a schedule to the agreement.
The wife testified that she did not know much about the husband’s finances once they were married. They each had their own bank account, but shared a joint account out of which bills were paid. She had a debit card and Visa card for this account, and unfettered access to the account. The money in the account consisted of money they had received at their wedding (the remainder of which they had deposited into the account after wedding expenses were paid), the husband’s net weekly salary of $1500, as well as child tax credits.
The husband stopped depositing money into the joint account in October 2013, citing concerns over the wife’s spending habits.
The Wife’s Employment
The wife’s last employment was in March 2005. Prior to separation, she was qualified to work as a medical lab assistant, and had worked in various positions at a hospital.
The wife testified that she has not investigated what steps she would have to take to upgrade her employment skills (as it had been some time since she was last working), and noted that she is not bilingual which could be an inpediment to finding employment (the parties live in the Ottawa area). She indicated that she would like to “ease back into work” for the sake of her four children.
She testified that her days are spent caring for her four children, including driving them to school in the morning, picking them up in the afternoon, and dropping them off at their respective activities during the week. She further testified that it is difficult to find a job because of these childcare responsibilities and that the cost of childcare for all the children would be as much as $1600 a month.
The wife admitted that she and the husband had agreed, while they were still together, that she would return to work when the youngest child started school (the youngest child started school in 2015, approximately one year after separation). The applicant also admitted, that there were jobs that she could have applied for but did not as she was focused on her children.
Since separation, she has taken a French course to start upgrading her French language skills, had two job interviews, and sent out a number of resumes.
The Position of the Parties
The wife argued that it is not reasonable to impute an income for her until November 2017, that being one year following the trial. She submitted that due to the roles each party had assumed during marriage (with her acting as caregiver for the children), the lengthy period that she had been out of the workforce, and the stress of the litigation, she would need time to return to the work, and would potentially do so on a part-time basis.
The husband argued that the wife should have an income of $32,500 imputed to her, on the basis of the lowest wages paid to a medical lab assistance with 0-5 years of experience in the City of Ottawa according to the Pay Scale website. An additional $39,600 should be imputed to the applicant, which represents the $3,300 per month of temporary spousal support she was receiving per a previous court order (which was based on the husband’s income of $250,000. That $39,600 should be imputed for nine years as a result of the wife receiving the husband’s half interest in the matrimonial home in exchange for a waiver of spousal support.
The Federal Child Support Guidelines
Justice Shelston considered section 19 of the Federal Child Support Guidelines in making his decision in this matter. Section 19 provides:
(1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,
(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse.
The Ontario Court of Appeal has set out a three-part test for determining whether income should be imputed in situations of unemployment or intentional underemployment:
- Is the spouse intentionally under-employed or unemployed?
- If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs?
- If the answer to question #2 is negative, what income is appropriately imputed in the circumstances?
According to the Court of Appeal, a spouse is intentionally underemployed if he or she chooses to earn less than they are capable of earning. The test does not require that the under-employment be in bad faith or with the explicit intention of avoiding support payments.
The onus is on the spouse seeking to impute income to establish that the other spouse is intentionally unemployed or underemployed.
Is the Spouse Intentionally Under-Employed or Unemployed?
When considering a spouse’s capacity to earn income, the court should consider, among other things, the following principles:
- The duty on the spouse to “actively seek out reasonable employment opportunities that will maximize their income potential so as to meet the needs of their children”
- The influence of the spouse’s age, education, health, work history, and availability of work within the spouse’s capabilities on their capacity to earn income.
Is the Intentional Under-Employment or Unemployment Required Because of Reasonable Educational Needs?
The second step of the test is generally an overall test of reasonableness.
Once intentional underemployment or unemployment is established, the onus shifts to the underemployed/unemployed spouse to establish one of the exceptions of reasonableness.
Courts have previously noted that
Parents are required to act responsibly when making financial decisions that may affect the level of child support available. They must not arrange their financial affairs so as to prefer their own interests over those of their children.
What Income Can Be Appropriately Imputed?
Where a spouse is found to be intentionally and unreasonably under-employed or unemployed, the Court has discretion to impute an “amount founded on a rational basis” as income, taking into considering the spouse’s age, education, skills, health, the number of hours that the spouse could work in light of competing obligations, as well as the hourly rate the spouse could reasonably earn.
The Court’s Findings
Justice Shelston found it reasonable to impute an income to the wife, but rejected the suggestion that it should be $39,600. Instead, based on the salary and working hours of various job postings available to the wife and presented to her during cross-examination, which appeared to be jobs that she could perform, as well as her age, employment and educational background, as well as the fact that she had not worked since March 2005, the Judge found it reasonable that she would be able to earn $24,000 (which was $12/hour x 40 hours x 52 weeks).
Justice Shelston additionally found that:
The [wife] has had 32 months to make arrangements about going back to work. I acknowledge that the parties agreed that she would do so in September 2015. The applicant has not done so. Now is the time for her to return to the workforce.
If you have questions about spousal support, or your obligations following a separation, speak with experienced Windsor family law lawyer, Jason P. Howie, at 519.973.1500 or contact us online. We serve clients in Windsor, Essex County and throughout the region.