The area and practice of family law is shaped by and evolves through societal change, legislation, global events (like a pandemic), and through judicial decisions of the Courts in Ontario and across Canada. FamilyMatters is the Lerners Family Law Group’s weekly update on how that change is being made:
In my experience as a family lawyer, one of the most challenging things about navigating a separation is that life’s other difficulties don’t stop happening. My clients navigate the same health, money, parenting, and relationship challenges as everyone else, in addition to dealing with the stress of separating from their spouse. Sometimes, these stressors include changes to my clients’ jobs; sometimes they even include the loss of their jobs. The COVID-19 pandemic has only made this worse. When parties in a family law proceeding become unemployed, they may have to deal, not only with the financial difficulties that arise for everyone when they lose their jobs but with a challenging support issue; namely, that their support order may be based on the income that they previously earned.
When courts order support payment, they sometimes deem the support payor or recipient to be earning more than they are; this is called imputing income. Income may be imputed where a spouse is deliberately under-employed or unemployed. This does not necessarily mean that the party is unemployed or underemployed in order to reduce or avoid a support obligation, only that they are earning less than they could if they were fully employed. In other words, while courts don’t force people to work to their highest earning potential, they can and do create a strong incentive to do so.
The purpose of imputing income to support payors is to ensure that people who are entitled to support, usually the payor’s former spouse or children, do not receive less than they would if the payor was fully employed. Income is imputed to recipients to ensure that support payors are not forced to cover the gap created by the recipient’s own choices. Parties cannot reasonably expect their former spouses to pay for them to earn less than they can.
In a hypothetical case, where an Ontario support payor earned $80,000 per year and paid full table child support for two children to her former spouse, monthly child support would be $1,211. If the payor quit her job in order to work at a more satisfying, but lower-earning job with an annual income of $50,000, her monthly support obligation would be reduced to $755 per month, according to the tables in the Federal Child Support Guidelines. However, her former spouse might object; why should the children be left with $456 less each month as a result of the mother’s wish to experience greater career satisfaction? In such a case, the court might impute an annual income of $80,000 to the payor spouse and order her to continue paying her monthly child support of $1,211.
So payors can’t quit their jobs because they would rather do something that they enjoy more and expect the court to allow them to reduce their support payments. Similarly, support recipients cannot choose lifestyle over income and look to their former spouses for a top-up. For most people, that’s understandable. At least, no one has ever asked me to argue a case like that one on their behalf. If they did, I would have to tell them that we shouldn’t expect to win.
The tougher cases are when someone loses their job for involuntary reasons. For example, people are terminated from their employment because of layoffs, misconduct or because of criminal convictions that affect their employability. In most cases, these people did not intend to lose their jobs; the termination was an unfortunate effect, not the desired outcome. Are they deliberately unemployed?
In the case of layoffs, the answer is usually no. Layoffs are almost always beyond the control of the employee. While parties are to “get out there” and actively seek new employment, and the income earned at the new employment is always measured against what is reasonable to expect of the party having regard for their background, education, training, and experience, the courts have been clear that a person who has been laid off will rarely be found to be deliberately unemployed.
The COVID-19 pandemic has made layoffs a fact of life for many. The courts have, so far, been understanding of the financial difficulties that have arisen as a result, accepting that “the COVID-19 pandemic has hit many businesses and industries”. However, it is important to remember that every decision of the court is always based on the facts of the particular case and that the mere fact that COVID-19 has wide-ranging effects is not evidence that a particular support party has been adversely affected.
When a party to a support order is terminated for cause, they are more likely to have income imputed to them. The courts are, in general, unforgiving to parties who are found to be the cause of their own demotion or dismissal. Whether the cause at issue is anti-social or illegal behaviour, or even failing to get along with co-workers, parties who have been fired, rather than laid off, can expect to have income imputed to them in most circumstances.
Criminal conduct that results in unemployment almost invariably results in a finding that the party is deliberately unemployed, with the resulting imputation of income. This general principle has been applied with criminal charges such as sexual misconduct, alcohol-related offences, drug charges, domestic assault and even driving offences.
Loss of employment is always tough. It can be especially challenging to navigate a job loss or a reduced income and a support order. If you or someone you know is experiencing this difficulty, please contact me, or another family lawyer, to get the professional help you need to meet this challenge.
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