“In R.L. v. M.F., 2023 ONSC 2885, I recently set out the applicable authorities regarding the imputation of income to a spouse at paras. 337 – 345 as follows:
337 The jurisdiction which allows a court to impute income to a spouse on the basis of intentional underemployment, as the Father claims, is found in s. 19(1)(a) of the CSG, which reads as follows:
Imputing income
19(1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,
(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;
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338 The leading case regarding the imputation of income to a support payor remains the decision of the Ontario Court of Appeal in Drygala v. Pauli (2002), 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711. At paragraph 32 of that decision, the Court described the imputation of income as:
… [O]ne method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this legal obligation, a parent must earn what he or she is capable of earning.
339 In Szitas v. Szitas, 2012 ONSC 1548, at para. 56, Chappel J. explained the meaning of intentional underemployment, citing Drygala v. Pauli, as follows:
The Ontario Court of Appeal has held that in determining whether to impute income on the basis that a party is intentionally underemployed or unemployed pursuant to section 19(1)(a) of the Guidelines, it is not necessary to establish bad faith or an attempt to thwart child support obligations. A parent is intentionally underemployed within the meaning of this section if they earn less than they are capable of earning having regard for all of the circumstances. In determining whether to impute income on this basis, the court must consider what is reasonable in the circumstances.
340 In reviewing the caselaw at para. 57, Chappel J. cites the following seven principles that apply to the imputation of income to a support payor:
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- There is a duty on the part of the payor to actively seek out reasonable employment opportunities that will maximize their income potential so as to meet the needs of their children.
- Underemployment must be measured against what is reasonable to expect of the payor having regard for their background, education, training and experience.
- The court will not excuse a party from their child support obligations or reduce these obligations where the party has persisted in un-remunerative employment, or where they have pursued unrealistic or unproductive career aspirations. A self-induced reduction of income is not a basis upon which to avoid or reduce child support payments.
- If a party chooses to pursue self-employment, the court will examine whether this choice was a reasonable one in all of the circumstances, and may impute an income if it determines that the decision was not appropriate having regard for the parent’s child support obligations.
- When a parent experiences a change in their income, they may be given a “grace period” to adjust to the change and seek out employment in their field at a comparable remuneration before income will be imputed to them. However, if they have been unable to secure comparable employment within a reasonable time frame, they will be required to accept other less remunerative opportunities or options outside of the area of their expertise in order to satisfy their obligation to contribute to the support of their children.
- Where a party fails to provide full financial disclosure relating to their income, the court is entitled to draw an adverse inference and to impute income to them.
- The amount of income that the court imputes to a parent is a matter of discretion. The only limitation on the discretion of the court in this regard is that there must be some basis in the evidence for the amount that the court has chosen to impute.
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[Citations omitted.]
341 While Chappel J.’s seven principles speak to intentional unemployment by support payors, they nonetheless remain relevant to a claim that a spousal support recipient is intentionally underemployed. While payors are required to maximize their income to support their dependants to the extent possible, as set out in CSG s. 19(1)(a), a person seeking to receive support from that payor should have a concurrent obligation (whether to support themselves or their children). While that factor is always relevant, it is even more material when the claim has a non-compensatory or mixed basis for support.
342 Further, while I have broad discretion to impute income to a payor, that discretion is not absolute. As Gillese J.A. wrote for the Court at para. 44 of Drygala v. Pauli:
Section 19 of the Guidelines is not an invitation to the court to arbitrarily select an amount as imputed income. There must be a rational basis underlying the selection of any such figure. The amount selected as an exercise of the court’s discretion must be grounded in the evidence.
343 At para. 23, the Court set out the following three questions which should be answered by a court in considering a request to impute income under s. 19 (1) (a) of the CSG:
[1] Is the party intentionally under-employed or unemployed?
[2] If so, is the intentional under-employment or unemployment required by the needs of any child or by the reasonable educational or health needs of the parent or spouse?
[3] If not, what income is appropriately imputed?
344 The Court was clear in Drygala v. Pauli that the test for imputing income is the same for both child and spousal support.
345 In Lavie v. Lavie, 2018 ONCA 10, the Court appears to have gone a step further in refining the test for imputing income to a spouse. There, Rouleau J.A., speaking for the Court, set out a very clear black line test for intentional underemployment. It is one in which the subjective reasons for the underemployment, (and by extension, unemployment) are not relevant. He wrote at para. 26:
There is no requirement of bad faith or intention to evade support obligations inherent in intentional underemployment: Drygala v. Pauli, at paras. 24-37. the reasons for underemployment are irrelevant. If a parent is earning less than she or he could be, he or she is intentionally underemployed.”