“This is what the court said I was earning then. This is what I say I’m earning now.”
At the risk of oversimplifying, that’s the analysis many support payors provide on motions to change, where they gloss over – or ignore – the reasons why income had to be imputed to them in the first place.
Does “imputed income” mean anything if, on a motion to change, a payor can simply rely on his current line 150 income?
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The starting point for any motion to change support is that the party seeking the change must establish that some important facts or circumstances have changed since the date the order was made. A “material change in circumstances” must be established. This generally entails some new facts or circumstances which, if known at the time, would likely have resulted in different terms in the order.
Quite often, motions to change can entail complex and countervailing allegations that more than one thing has changed. Entitlement, need, and ability to pay can all get thrown into the mix.
But almost invariably, an alleged change with respect to the payor’s income becomes a central issue. Often it is the only real issue. Simplistically, this part of the analysis might be summarized:
a. What was the payor earning then?
b. What is the payor earning now?
c. When did the payor’s income change – and why?
The first question – “what was the payor earning then?” – requires a fundamental (and often overlooked) determination:
a. Was the support order based upon the court accepting the payor’s “declared” income?
Or,
b. Was the support order based upon the court “imputing” income to the payor?
This preliminary determination is vital to an analysis of whether there has been a material change in circumstances relating to ability to pay. It will affect the onus on the moving party. It will prescribe what new or changed facts the party will have to establish, to convince the court that support should be changed.
If support was initially calculated based on the court’s acceptance of a payor’s “declared” income, then changes in declared income in subsequent years may be persuasive. If the court was prepared to rely on things like T4 slips and tax returns when it made the original order, T4 slips and tax returns for subsequent years may be sufficient evidence of changed circumstances. This of course would be subject to other considerations, such as the possibility that employment levels or income were deliberately manipulated by the payor.
But if the original support order was based upon “imputed” income, a more comprehensive analysis is required on a motion to change. The court must consider:
a. Why did income have to be imputed in the first instance? Have those circumstances changed? Is it still appropriate or necessary to impute income, to achieve a fair result?
b. How exactly did the court quantify the imputed income? What were the calculations, and are they still applicable?”