Alberta has a new set of standards/test as to how it will impute income for support purposes. In the case of Peters v Atchooay, 2022 ABCA 347 (hereinafter, “Peters”), the court held that the test for imputing income to a payor parent pursuant to section 19(1) of the Federal Child Support Guidelines, which states that, “the court may impute such amount of income to a spouse as it considers appropriate when a spouse is intentionally underemployed or unemployed…”, is based on a reasonableness test. Where a payor parent must prove to the Court that their employment (or lack thereof) is reasonable in the circumstances. Thus, this is an objective analysis rather than a subjective analysis.
For the past 21 years the Alberta Courts have been interpreting section 19(1) of the Federal Child Support Guidelines based on the Alberta Court of Appeal Case, Hunt v Smolis-Hunt, 2001 ABCA 229, which states that the test for whether a payor parent is underemployed or unemployed is subjective and is based on the payor parent’s intent. Thus, the thrust of the Alberta approach for the past 21 years has been one of deliberative evasion, where the payor parent must be found to be purposely evading child support obligations in order to have income imputed to them under section 19(1) of the Federal Child Support Guidelines.
Peters has put Alberta in line with the rest of the country in employing the reasonableness test. Up until this case, Alberta was the only province utilizing the deliberate evasion test. Switching to a test of reasonableness test is in line with recent Supreme Court of Canada Cases, Michel v Graydon, 2020 SCC 24 and Colucci v Colucci, 2021 SCC 24, all of which reinforce and clarify that the ultimate goal of child support is ensuring that a child receives everything that they are rightfully owed. A child is entitled to child support in accordance with their parent’s income and the reasonableness test is intended to help that this occurs. The previous deliberate evasion test unfairly prejudiced the payee parent and the child by placing the obligation on the payee parent to establish on an evidentiary basis, that the payor parent was purposely evading their child support obligations by being underemployed or unemployed. The reasonableness test theoretically is intended to put 2the best interests of the child first, which is the modern approach to child support.
Peters provides a set of 7 non-exhaustive factors to consider when determining whether a payor parent is reasonably employed in the context of an application to impute a parent’s guideline income under section 19(1) of the Federal Child Support Guidelines. These 7 non-exhaustive factors include the following:
- Parents have a general duty to work if they are healthy enough to work;
- A parent’s general earning capacity is used to assess reasonableness in the circumstances;
- The court has discretion to impute or not impute income based on the circumstances;
- The obligation to support children is the overarching goal of this analysis;
- Agreements between the parties will contextualize reasonableness in the circumstances;
- Reasonableness is not fixed in time and can change as the circumstances change; and
- The ultimate onus of proving reasonableness is on the party opposing imputation of their income.
In summary, parents must be live to Peters when it comes to their employment decisions. This does not mean that parents are unable to switch jobs or careers if it means a pay decrease, but payor parents must be aware of the 7 non-exhaustive factors when making this type of decision.
Note: This article provides general commentary and is in no way intended to replace the need to consult with a legal professional concerning the specific circumstances of your situation. This article should not be construed or relied upon as legal advice.