Income Imputation
If your ex-partner is employed, determining her/his income for the purposes of child or spousal support is relatively straightforward.We use his/her income before taxes as outlined within Line 150 of their tax return and apply this number to the Child Support Guidelines when determining child support or the Spousal Support Advisory Guidelines for spousal support in Ontario.
What happens when you can’t determine income?
What is not so straightforward is determining your ex-partner’s income when that income does not accurately reflect the true amount of money available to her/him (ex. where the individual is self-employed). Or when they are not earning as much as they should. Some situations include the individual is intentionally underemployed or unemployed, refuses better income earning opportunities, refuses to work within his/her field, decides to switch jobs from a better paying job to a lower paying but more personally rewarding one, or wants to to volunteer work for no pay.
In these cases, the Court may “impute”, or assign, an income to him/her that is higher than what is set out on their Line 150 for support purposes. The Court has this authority further to Section 19 of the Federal Child Support Guidelines.
There is a high evidentiary threshold to meet to establish a case for income imputation and we at Noori Law have years of experience dealing with this issue. Contact us to book an appointment with our family lawyers in Etobicoke.
Commonly Asked Questions About Income imputation
Does imputed income stay fixed, or can it change over time?
Imputed income is not permanent and can be changed if either party’s financial circumstances change significantly. You will have to request the court to reassess and update the amount.
Can business owners have income imputed based on their company’s retained earnings?
In some cases, yes. Ontario courts may look beyond personal T1 income and consider corporate financials. If the business retains earnings or pays non-essential expenses through the company, the court might add that value back when imputing income.
Is income imputation limited to child support cases?
While income is most commonly imputed in child support cases, it also applies in spousal support and sometimes in equalization of property if a party manipulates reported income to shift division outcomes.
Does voluntary retirement affect imputed income calculations?
Yes. Early or strategic retirement doesn’t automatically reduce support obligations. If a payor retires while still capable of working, the court may impute income based on what they could reasonably earn post-retirement.
How do courts handle imputation when income fluctuates seasonally or annually?
In cases of fluctuating income, courts typically average earnings over three years to reach a fair imputed amount. They may also adjust for predictable highs and lows if the payor works in seasonal industries or commission-based roles.