Proving intentional underemployment a tough task
By AdvocateDaily.com Staff
Gelman, principal of Gelman & Associates, says it’s relatively common for former spouses to suspect that a payor is deliberately remaining underemployed or out of work altogether in order to suppress support obligations to a former spouse. But proving it can be tough, she says.
“You have to conduct a risk-benefit analysis,” Gelman says. “It will depend on the case, but so long as people impute a reasonable amount of income to themselves, there’s uncertainty about what an expert will say or how a judge will rule, and it may not be worthwhile going through all the expense of a trial for an extra $50 per month in support.”
Gelman explains that the federal Child Support Guidelines allow an income to be imputed to payors in cases of intentional underemployment or unemployment, but she points out there is a three-part test a recipient must meet in order to prove their case — a requirement which has its roots in a landmark 2002 Ontario Court of Appeal judgment.
First, is the underemployment a voluntary act?
“If someone was fired or let go due to downsizing at their workplace that was beyond their control, then it can’t be said to be voluntary,” Gelman says. “But should they remain unemployed for a long time, you can revisit the issue if they’re not conducting a proper search for work.”
Second, is the underemployment required for educational needs?
“If a person is not working at all, or only employed part-time because they are going to school, retraining or adding skills, that’s going to be a factor,” Gelman says.
And third, what income is appropriate to impute in the circumstances?
Gelman says the final part of the test is often the most difficult for parties to prove in family law litigation.
“The ideal situation would be to hire an expert witness who can research the circumstances and come up with an appropriate estimate for the imputed income,” she says.
An expert’s job in these cases is to analyze the payor’s resume and search efforts, as well as look at the transferability of any skills they hold that could be used in a different field, Gelman says.
“The expert can then generate a list of potential occupations within the available labour market, taking into consideration current demand and competition,” she says. “Once they’ve done that, they can come up with an estimate for imputed income. It’s usually expressed as a range of potential salaries, as opposed to a single number.”
In one recent case, a self-represented litigant succeeded in convincing the Ontario Court of Appeal that his ex-wife was intentionally underemployed, even though her line of work was agreed to by the parties before their split.
“There is no requirement of bad faith or intention to evade support obligations inherent in intentional underemployment,” the unanimous three-judge panel concluded. “The reasons for underemployment are irrelevant. If a parent is earning less than she or he could be, he or she is intentionally underemployed.”
“The case clarifies that you can be found intentionally underemployed whether or not you’re trying to avoid paying support,” Gelman says.