March 23, 2021 – Declared Income vs. Imputed Income

“This is not the first time that a parent who was ordered to pay child support on the basis of imputed income has later sought to vary the order based on line 150 income.  In Trang v. Trang, 2013 ONSC 1980, Justice Pazaratz considered a motion like that of Mr. Dunn. In Trang, as here, the moving party failed to make any financial disclosure prior to the trial that resulted in the order and failed to attend the trial.  Justice Pazaratz’s comments at paras. 51 and 52 about how to approach a motion like this are directly relevant to Mr. Dunn’s motion:

When a court imputes income, that’s a determination of a fact.  It’s not an estimate.  It’s not a guess.  It’s not a provisional order awaiting better disclosure, or further review.   It’s a determination that the court had to calculate a number, because it didn’t feel it was appropriate to rely on – or wait for — representations from the payor.

 A party who argues that an imputed income level is no longer appropriate must go beyond establishing their subsequent “declared” income.  They must address why income had to be imputed in the first place.  They must present evidence of changed circumstances which establish that either:

a. It is no longer necessary or appropriate to impute income.  The payor’s representations as to income should now be accepted, even if they weren’t accepted before.

Or,

b. Even if income should still be imputed, changed circumstances suggest a different amount is more appropriate.

Mr. Dunn has not proven, or even explained, why it is “no longer necessary or appropriate to impute income” to him.  He simply asserts that the court should accept his line 150 income.  I agree with Pazaratz J. that this is not enough:

If “declared income” automatically prevailed on a motion to change support, it would defeat the purpose of imputing income in the first place.  It might even be a disincentive for payors to participate in the initial court process.  They could simply ignore support Applications – as they often do.   They could wait to see if the court imputes income, and how much.  If dissatisfied with the amount, the payor could later return to court waving their tax returns, to suggest that the original judge got it wrong. (Trang, para. 53)”

         Lapp v. Dunn, 2020 ONSC 1720 (CanLII) at 12-13