Imputation of Income to a Spouse with a Disability
When individuals are going through a divorce, if a spouse is found to be underemployed, income may be assigned or “imputed” to them for the purposes of determining how much support is payable.
This raises a novel question, what happens when a spouse has a disability that limits their employment options, or altogether prohibits them from working?
Canadian Courts have provided some guidance on this issue. The general rule is that, where there is no evidence that the respondent could, at present, reasonably earn an income, income will not be imputed to them (Shigehiro v Shigehiro, 2017 ABCA 392; CAG v SG, 2012 ABQB 529; Everitt v Marcelino, 2021 ONSC 6919). However, where there are inconsistencies in actual versus reported income, income may be imputed despite a finding of disability (D.W. v. C.O., 2006 CanLII 13554 (ONSC)).
Prior to the Alberta Court of Appeal decision of Peters v Atchooay, 2022 ABCA 347, Hunt v Smolis-Hunt, 2001 ABCA 229 (“Hunt”) was the leading case for determining whether or not a spouse is “underemployed”. Hunt is no longer good law in Alberta and has been replaced by Peters v Atchooay, 2022 ABCA 347 (“Atchooay”), however, the courts have yet to clarify if Atchooay applies to the imputation of income to the recipient spouse.
When considering whether to impute income pursuant to s.19(1)(a) of the Federal Child Support Guidelines, courts will consider the following:
- There is a duty to seek employment where a parent is healthy and can work;
- A court must consider what is reasonable in the circumstances. The starting point is the payor’s earning capacity;
- Income will not be imputed where a decision to earn less income than the individual is capable of is found to be reasonable;
- A parent is required to act in a manner reflective of his or her obligations and cannot be excused from support obligations in furtherance of unrealistic, unproductive, or non-remunerative career aspirations;
- Any pre-separation agreements or social contracts have some weight in determining Guideline income, but they are not determinative;
- What is reasonable or unreasonable is determined at one point in time and will not necessarily remain static for the entire time the children are owed support; and
- The onus is on the party opposing imputation to prove on a balance of probabilities: 1) that the underemployment or unemployment was not voluntary, or, 2) that the under-employment or unemployment is as a result of one of the listed exceptions in s 19(1)(a). If neither circumstance applies, that party must establish on a balance of probabilities that their under-employment or unemployment is reasonable.
Generally, cases will turn on the medical evidence provided (see for example: Behm v Hansen, 2022 ABQB 430; Dagg v Wong, 2018 ABQB 73; Nykolyshyn v Dalton, 2022 ABKB 860; Mohammed v Sahi, 2012 ONSJ 515; Ram v Cheta, 2017 BCCA 190).
Imputation of income can be a complex issue and is further complicated when one party experiences disability.