Both custodial and non-custodial parent are responsible for the financial expenses of raising their children. When it comes to child support, typically the monthly support payment is determined by the Courts to be based upon line 150 of the payor parent’s income tax return. While in most situations, a Court will be able to calculate payment in this manner, sometimes there may be an issue when the payor parent is under-employed, unemployed, or is being paid in cash. In these situations, a Court can decide that the payor parent’s income should be a particular amount. In legal terms, the Court will “attribute” or “impute” a certain amount of income to the payor parent based on such parent’s earning capacity instead of his or her declared income.
In Canadian provinces outside of Alberta, the Courts have interpreted “intentionally under-employed or unemployed” using a reasonableness standard which takes a case-by-case approach and considers whether the payor spouses’ employment choices are reasonable within the context of his or her particular child support obligations. In contrast, since the 2001 case of Hunt v. Solis-Hunt, 2011 ABCA 229 until very recently, Alberta was an outlier, and the Alberta Courts applied a legal test far less favourable to payee parents and required the payee parent to prove that the payor parent was intentionally under or unemployed explicitly for the purpose of avoiding meeting child support obligations. This historically has been difficult to prove in court.
The recent Alberta Court of Appeal case of Peters v. Atchooay, 2022 ABCA 347hasaltered the legal landscape in Alberta and brought the Alberta test in line with the rest of Canada. In this case, the Court applied the reasonableness test and effectively reversed the burden of proof by requiring the payor to prove that his or her income is reasonable. This case set a new test that takes the following into consideration:
- Whether the payor parent is intentionally under or unemployed. The factors considered will include the payors age, qualifications, earning capacity and if there are any other circumstances that are beyond this or her control.
- Whether any of the exceptions from section 19 of the Child Support Guidelines are both applicable and are relevant to the circumstances of the situation under consideration.
- If the payor is intentionally under or unemployed and not covered by one of the exemptions, then should the court use judicial discretion to impute income?
Do you receive or pay child support in Alberta and feel that the amount was calculated unfairly and should be re-assessed or are worried that it could be? The Calgary Legal Team has extensive experience with child support agreements and can assist you in based on this recent development from the Alberta Court of Appeal.