Family Law Principles that we can learn from Thompson v. Thompson 2013 ONSC 5500 (Imputing Income - Intentional Underemployment or Under Employment)
The Ontario Court of Appeal has provided clarification regarding imputing income in cases of intentional underemployment or unemployment. In accordance with section 19(1)(a) of the Guidelines, it has been established that it's not essential to prove bad faith or an attempt to evade support obligations to impute income. A parent can be deemed intentionally underemployed if they earn less than they are capable of earning, given all of the relevant circumstances.
In deciding whether to impute income on these grounds, the court must take into account what is reasonable under the given circumstances. The factors that the court is required to consider include the age, education, experience, skills, and health of the party. In addition, the party’s past earning history and the amount of income that the party could reasonably earn if they worked to capacity are also significant considerations.
When determining a party’s capacity to earn income, the court should consider several principles.
The payor has a duty to actively seek out reasonable employment opportunities that will maximize their income potential in order to meet the needs of their children.
The court will not excuse a party from their child support obligations or reduce these obligations where the party has persisted in un-remunerative employment, or where they have pursued unrealistic or unproductive career aspirations. A self-induced reduction of income is not a basis upon which to avoid or reduce child support payments.
When a party chooses to pursue self-employment or an alternative income earning path, the court will scrutinize this choice to determine whether it was a reasonable one in all of the circumstances. The court may decide to impute an income if it determines that the decision was not appropriate considering the parent’s child support obligations.
Lastly, a party may be imputed income if their unemployment or under-employment are self-induced. Examples of such scenarios include cases where the payor quits their employment for selfish or bad faith reasons, or engages in reckless behaviour which affects their income earning capacity.
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