Imputed Income and Spousal Support When Your Ex Quits Work in Alberta

If your ex suddenly stops working, takes a lower-paying job or seems to be underreporting income, spousal support can feel out of reach. Imputing income means a court treats someone as earning more than they are actually reporting or receiving.

This article explains the parts of Alberta and federal law that bear on this question, and what to gather if you are worried about your ex's income. How a court decides what income to use depends on the facts, so a lawyer should confirm how it applies to you.

This article covers the law of Alberta.

Income and means in a support decision

Under the Divorce Act, the court must consider the condition, means, needs and other circumstances of each spouse. Alberta's Family Law Act similarly looks at each party's conditions, means, needs and other circumstances, and also at the payer's legal obligation to support another person.

Income is a major part of means, but it is not the whole picture. The Spousal Support Advisory Guidelines are not law, although judges often base their decisions on them. They also do not decide entitlement, and an income gap alone is not enough.

Where income numbers come in

The guidelines use different income measures depending on the situation. The without-child-support formula works from the gross income difference, while the with-child-support formula is based on net disposable income. That is why the income figure used for your ex matters so much: a change in it can change the range the guidelines produce.

Whether a court will use a figure higher than what a person actually earns is a fact-specific question. It can turn on why work stopped, whether it was a real choice, and what the person could reasonably earn. A lawyer can tell you how those questions are approached.

When your ex quits work or retires

If there is already an order, the first question is whether it should change. A court may vary, rescind or suspend a spousal support order, but only after being satisfied that there has been a change in the condition, means, needs or other circumstances of either former spouse since the order. The change must be substantial and continuing, and the court should vary only as far as the change justifies rather than rehear the case.

Retirement is a common example. Where an order or agreement is silent, retirement is usually treated as a material change. But retirement is treated as early if the payor retires on a reduced pension, or on an unreduced pension before age 65, absent health or other special circumstances; early or voluntary retirements are scrutinized closely and courts may find no material change.

• An order or agreement can name retirement as an express review ground.
• A review clause or court-ordered review at retirement avoids debate over whether retirement is a material change.
• Where part of a pension was already divided as property, the payor must prove it, and the burden then shifts to the recipient to show hardship or need.

If you are the one whose income dropped

If you have genuinely lost income, apply to vary the order instead of simply paying less. A support agreement cannot vary an existing support order, and for Family Law Act orders the ground for variation is a change in the condition, means, needs or other circumstances of either party.

A court can also make an interim order while the main application is decided. Be ready to explain why your income changed and what you are doing about it, since the court looks at your circumstances as a whole.

What to do next

• Gather your support order or agreement and check for any review or retirement clause.
• Collect recent tax returns, notices of assessment, pay stubs and statements for both of you, as far as you can.
• Write down when and why your ex stopped working or changed jobs.
• Note any pension, business or other income that may not appear on pay stubs.
• Speak with a lawyer or accountant about how a court might treat the income and whether to apply to vary the order.

Frequently asked questions