- A court may impute income it considers appropriate, for example where a parent is intentionally under-employed or unemployed.
- Income for support starts with the Total income line of the T1 General tax form, adjusted under Schedule III.
- The respondent in a child support case must provide income documents within 30 days if in Canada or the U.S., or 60 days elsewhere.
If you think your ex quit a job, cut their hours or is keeping income off the books, the support amount may look too low. The law has a tool for this, called imputing income, which lets a court treat a parent as earning more than they report.
This article explains how income is normally worked out in British Columbia, when a court may impute more, and what you can do to prepare. Every case depends on its facts, so a lawyer can help you assess yours.
This article covers the law of British Columbia.
How income is normally determined
Table support is based on the payor's income. The presumptive amount is the table amount for the payor's province plus any section 7 special or extraordinary expense amount. The recipient's income does not change the table figure.
A parent's annual income is determined from the Total income heading of the T1 General tax form, adjusted under Schedule III of the Guidelines. Where income fluctuates, the court may look at the last three years.
If both parents agree in writing on a parent's annual income, the court may accept that amount if it is reasonable given the income information that must be disclosed.
When a court can impute income
Under section 19 of the Guidelines, the court may impute such amount of income as it considers appropriate. The Guidelines give examples:
- a parent is intentionally under-employed or unemployed
- property is not reasonably used to generate income
- a parent unreasonably deducts expenses
Whether an expense deduction is reasonable is not decided solely by whether the Income Tax Act permits it. Imputing is a decision for the court, so quitting a job or earning less does not automatically lead to imputed income. A lawyer can explain what a court may look at on your facts.
Self-employed parents and corporations
When the payor owns or runs a company, the court may include in a shareholder, director or officer's income all or part of the corporation's pre-tax income, or an amount commensurate with the services provided, capped at the corporation's pre-tax income.
Schedule III also adjusts business figures. For example, a capital cost allowance deduction on real property is added back, and payments to non-arm's-length persons are included unless the parent shows they were necessary to earn the income and reasonable. The court may choose not to apply two of the Schedule III adjustments to non-recurring capital or business investment losses.
Getting the income information
An applicant must include the other parent's personal income tax returns for the three most recent taxation years. The respondent must provide income documents within 30 days if in Canada or the U.S., or 60 days elsewhere.
If a parent lives outside Canada, income is determined as though they were a resident of Canada. If they live in a country with significantly higher tax rates, the court determines an appropriate amount.
If financial disclosure is later found to have been lacking, that can matter after an order is made. A court may change an order on evidence of a lack of financial disclosure discovered after the last order.
What to do next
- Collect what you know about your ex's work history, job changes and lifestyle.
- Gather tax returns, notices and pay information you already have.
- Note dates when income changed and the reasons given.
- Request income documents and watch the disclosure deadlines.
- Speak with a lawyer or accountant before asking a court to impute income.
Frequently asked questions
Can a court treat my ex as earning more than they report?
Yes, the court may impute such amount of income as it considers appropriate, for example where a parent is intentionally under-employed or unemployed. Whether it does so depends on the facts.
What if my ex is self-employed?
The court may include some or all of a corporation's pre-tax income in a shareholder, director or officer's income, up to the corporation's pre-tax income. It can also look at whether business expense deductions were unreasonable.
How long does my ex have to hand over income documents?
The respondent must provide them within 30 days if in Canada or the U.S., or 60 days elsewhere.
What if my ex's income changes from year to year?
Where a pattern of income fluctuates, the court may look at income over the last three years.
Sources
- Federal Child Support Guidelines (SOR/97-175) — Justice Laws (federal)
- Federal Child Support Guidelines, Schedule III — Justice Laws (federal)
- Family Law Act s. 152(2) — bclaws.gov.bc.ca
- Federal Child Support Guidelines, Schedule I notes — Justice Laws (federal)
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a family law question
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