Can a Court Impute Income for Child Support in Alberta?

You may suspect that the other parent has quit a job, cut back hours, or arranged their company pay to look small. Because child support depends heavily on the payer's income, that can feel unfair and worrying.

The law gives courts tools for these situations. This article explains how income is normally set, when a judge can look past the numbers on paper, and what disclosure rules help you find out what is really going on.

This article covers the law of Alberta.

How income is normally set

Table child support is driven by the paying parent's annual income, the number of children, and the payer's province. Income is generally taken from the Total income line of the T1 General tax form, adjusted under Schedule III.

Parents can also agree in writing on what the income is, and the court may accept the agreed figure if it is reasonable. An agreement is not automatic, so a figure that looks badly out of line may still be questioned.

The same approach applies whether you are divorcing or not. Divorcing spouses are under the Divorce Act, and the Federal Child Support Guidelines apply unless both are habitually resident in a province designated by order. Unmarried, separated-but-not-divorced, and adult interdependent partners proceed under Alberta's Family Law Act and the Alberta Child Support Guidelines. Those Alberta guidelines adopt the Federal Child Support Guidelines, so the table amounts are the same.

When a court can impute income

To impute income means the court treats a parent as earning a certain amount, even if their tax return shows less. The court may impute the income it considers appropriate, for example for intentional under-employment or unemployment, or for unreasonable deductions of expenses.

Situations where parents commonly raise this include:

• A parent who leaves a job or reduces hours without a good reason.
• A self-employed parent whose business expenses seem inflated.
• A parent who stays out of work although they could work.
• A parent who does not hand over income information at all.

Whether a particular choice counts as intentional, and what figure is appropriate, depends on the facts. A lawyer can help you judge how strong your situation is.

Fluctuating income and company pay

If a parent's income this year would not fairly reflect their real income, the court may look at their income over the last three years. Fluctuating income and one-time amounts are examples.

For a shareholder, director or officer of a corporation, the court may attribute all or part of the corporation's pre-tax income to that parent where the salary figure does not fairly reflect the money available for support.

Disclosure: how you find out

When someone applies for child support, the applicant must include every personal income tax return filed by the other spouse for each of the three most recent taxation years, plus every notice of assessment and reassessment for those years. If the spouse is an employee, pay information is included too.

A respondent who is served with an application must provide the same income documents within 30 days if in Canada or the United States, or 60 days if elsewhere, unless the court sets another deadline.

If a spouse does not comply, the other spouse may apply for a hearing or judgment, or for an order requiring the documents. The court may also impute income.

After the order, and what to do next

Disclosure continues once an order is made. While the child is a child under the Guidelines, a spouse must provide updated income documents on written request, not more than once a year, within 30 days (Canada or the United States) or 60 days (elsewhere).

If you think income is being understated, practical steps include:

• Gather any tax returns, notices of assessment and pay information you already have.
• Note job changes, business details or lifestyle facts that do not match the reported income.
• Make a written request for updated income documents if an order is already in place.
• Keep the response deadlines in mind and record the dates.
• Speak with a lawyer or accountant about whether imputing income or attributing corporate income fits your facts.

Frequently asked questions