BC Spousal Support and Child Support: Imputing Income to Under-Employed Spouse

When it comes to determining income for the purposes of calculating BC spousal support and child support obligations, it is not uncommon for one spouse to ask the court to impute income on the basis that the other spouse intentionally under-employed or unemployed. For the purposes of both BC spousal support and child support, the court has broad discretion to impute income to either or both spouses. This article will examine how the court exercises that discretion.Guidelines permit income to be imputed to a spouse

The Federal Child Support Guidelines (SOR/97-175) (the “Guidelines”) allow a court to impute income to a spouse in various circumstances. Relevant to the discussion in this article is section 19(1)(a) of the Guidelines, which permits the court to impute income to a spouse as it considers appropriate in the circumstances if the spouse is intentionally under-employed or unemployed, but not  where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority, or by the reasonable educational or health needs of the spouse.

Test for imputing income for BC spousal support/child support

The spouse seeking to have income imputed to the other spouse has the burden of establishing an evidentiary basis for such a finding. The test for imputing income for intentional under-employment or unemployment is one of reasonableness, having regard to the spouses’ capacity to earn income in light of their age, education, health, work history and work availability. A spouse’s capacity to earn income includes that person’s ability to work or to be trained to work.

Recent BC family litigation where income was imputed

Income was imputed to the wife for the purposes of calculating BC spousal support and child support in H.C.F. v. D.T.F., 2017 BCSC 1226.  The spouses married in 2004, had a son in 2005, and separated in 2014. Throughout the marriage, the husband worked as one of the most senior executives at ScotiaMcLeod. His income included bonuses and other discretionary amounts, but overall it was relatively consistent from year to year, fluctuating between approximately $939,000 and $1,093,000 in the six years from 2011 to 2016. The court found that the most appropriate means of calculating the husband’s income for support purposes was to apply section 17(1) of the Guidelines to average the last three years of his income. The wife, on the other hand, had not been formally employed since 2004. Prior to the marriage, the wife had earned a B.A. and a M.Sc. in Business Administration. From 1992 to 2004 she worked as a consultant in a variety of settings, generally earning about $60,000 to $70,000 per year.

Reason for spouse’s unemployment is a significant consideration

At trial, there was no medical evidence of any physical or emotional hurdle to the wife seeking and holding employment. The child of the marriage was nearly in high school and it was anticipated that he would be spending more time with his father, all of which would assist the wife in finding and holding employment. Importantly, the evidence at trial also showed that this was not a case where the spouses agreed that one of them should stay at home as this would advance their interests as a family unit, nor was it a measured decision made by both spouses to help advance the husband’s career. Rather, the evidence established that the husband wanted the wife to return to work and told her so, but the wife made the personal decision over the express wish of her spouse to stay at home rather than return to work.

Can income be imputed where spouse made choice to be unemployed?

By the time the matter went to trial, the wife had been out of the workforce for 12 years. The court noted that after the spouses separated in 2014, the wife made virtually no effort to seek employment, nor had she in any meaningful way sought out any career counselling, vocational testing, or retraining. It did not appear from the wife’s evidence that she had any intention to do so and the court found her to seem “quite indifferent to the positive obligation that lies with her to endeavour to become economically self-sufficient.” (at para. 191). Given the circumstances, the husband asked the court to impute income to the wife for the purposes of calculating BC spousal support and child support, and the court agreed that it was appropriate to do so.

How much income should be imputed for BC spousal and child support?

Counsel for the wife suggested that the court should impute income of $20,000 (i.e., minimum wage) to her for the next three to five years. The court found no principled basis to impute income at minimum wage, finding no reason that an individual of the wife’s age, attributes, and education would or should be holding a minimum wage job. While some of her skills and knowledge were dated, on the wife’s own evidence at trial, she conceded that she could earn more than minimum wage.  In the result, for the purposes of calculating BC spousal support and child support obligations, the court imputed an income of $60,000 a year to the wife (an amount at the low end of what she earned more than 15 years prior).

Bottom line on imputing income for BC spousal support/child support 

BC spousal support and child support are calculated on the basis of the spouses’ incomes. Where one or both of the spouses are underemployed or unemployed, the court can impute income. Whether the court exercises its discretion to impute income depends on the reason why the spouse has low (or zero) income. Where the court determines that it is appropriate in the circumstances to impute income, the amount of income to be imputed depends on factors such as the spouse’s education, experience, and ability to work or to be trained to work.