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How to Determine a Party’s Capacity to Earn Income:

Justice Chappel in Corcios v Burgess, 2011 ONSC 3326 laid out the following principles that are still followed to date on how to determine a party’s capacity to earn income:

1. 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.

2. 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.

3. 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.

4. When a parent experiences a sudden 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 in order to satisfy their obligation to contribute to the support of their children.

5. 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.

6. 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.

7. A parent who decides to stay at home to care for subsequent children, or to work in the home at a reduced rate so that they can continue to care for the children, may be imputed a reasonable income in the absence of evidence to support a finding that the parent’s underemployment is required by the needs of the subsequent children within the meaning of section 19(1)(a) of the Guidelines.

In the above case, the Court found that:

The Respondent should have begun a comprehensive, expanded employment search in October, 2007, and that if he had done so, he could have in all likelihood secured employment at a similar rate to his current position within three months, i.e. by January, 2008. His current position has an annual salary of approximately $32,032.00. I find that the income that he reported at line 150 of his 2007 Income Tax return, $33,269.00, was reasonable having regard for the termination of his employment and his need for time to secure alternative employment. However, based on the foregoing analysis, I impute an income of $32,032.00 to him commencing January 1, 2008. The Court went on to add that “I have considered the fact that the Respondent declared bankruptcy in July, 2009, and was discharged from bankruptcy on May 28, 2010. Further, I am cognizant of the fact that the Respondent received Ontario Works benefits in 2010. While these considerations are relevant in determining whether to impute income to a child support payor, they are not determinative of the issue, and do not preclude the court from imputing income where the evidence indicates that the child support payor’s employment search efforts were deficient and that the payor was not employed to their capacity during the relevant time frame.”

The evidence in this case shows that when claiming for reduced child support, the claimant needs to show evidence of material change of circumstances, supported by actual evidence. This evidence requires analysis by a competent lawyer to analyze the situation. We, at Shankar Law, are confident of assisting parties in determining whether or not such a material change has occurred.

At Shankar Law, we are happy to assist and guide you through whatever challenges you have in your spousal life. We work all over Ontario, but primarily in three counties: Huron, Bruce, and Grey and span several cities (Southampton, Kincardine, Goderich, Wiarton, Hanover, Dundalk, Walkerton, Meaford, Markdale, Chatsworth), through our two locations in Port Elgin and in Owen Sound.


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