Support Payments and Unemployment
An unexpected layoff can be a stressful experience for anyone, but particularly for a separated spouse who is required to make regular support payments. For the payor, support obligations can quickly run through any savings that have been accumulated, and previously comfortable individuals are put into the difficult financial situation of struggling to make payments.
A common question asked is whether an individual can begin to pay a lesser support amount because of their unemployment. The answer is that it all depends on the circumstances of the unemployment. A court would look at the reasons for the employment change before making the decision of whether or not to vary the child or spousal support amounts.
Examples of When Courts Will Reduce Payments
In some situations an applicant may be able to significantly reduce their payment amount. In the case of Chambers v Chambers (2008 ONSC), the applicant was unemployed and living in poverty because his critically ill wife required constant care on the order of the doctor. Unable to look for employment until after his wife’s surgery, the court reduced child support payments from $668 per month to $100 per month. This reduction was not meant to be permanent, however, and the applicant would have to find employment following his wife’s surgery.
Regarding spousal support, the 2013 decision of Hay v Hay (ONSC) had the applicant successfully terminate spousal support due to the combination of his unemployment and his wife’s recent employment. The court placed emphasis on three factors relating to Mr. Hay’s unemployment: the unemployment was due to no fault of his own, he continued to pay all of his spousal support obligations during unemployment, and that his search for new employment was being made in good faith.
For those who have accumulated arrears during their unemployment, it may be possible in some scenarios to have it reduced. In the case of Krause v Zadow (2014 ONCJ), the father lost his job and was unemployed for a year before accepting a new position at half his previous salary. During the year of unemployment, the father was unable to meet his support obligations and quickly accumulated sizable arrears. In its decision, the court lowered the future spousal support payments from $1654 per month to $700. Recognizing the father’s good faith attempt to continue paying support into his unemployment for as long as possible, the court rescinded all the arrears of child and spousal support that accumulated during his unemployment.
When Reduced Income will not Result in Reduced Payments
Reducing payments is not as easy as just reducing income and the above cases should not be taken as a guarantee that everyone will receive a reduction in payment amounts. For those who claim to be actively seeking a new job but unable to find suitable new employment, the courts will look for evidence of an active job search. In Filippetto v Assunta Timpano (2008 ONSC), the unemployed applicant brought a motion to decrease his support payments from $783 to $335 per month because his only income was his Employment Insurance. In the decision, the court was unimpressed by the applicant’s lack of evidence of a diligent job search, and the result was only a temporary reduction of child support payments to $570 per month.
Courts are very alert to individuals who are purposefully unemployed or underemployed in order to lower payment amounts. If, for example, a high-earning executive decided to quit their job and instead become a gas station attendant, a court may decide to impute income under Section 19 of the Federal Child Support Guidelines and maintain support payments at his previous position’s salary. Imputing income can occur with both child support and spousal support. One of the common reasons for imputing income is when a court believes there is intentional unemployment or underemployment.
A court may also impute income if the applicant has been fired for cause. The applicant in Aboagye v Sakyi (2012 ONCJ) was fired due to poor performance, frequently being late, using his cell phone during company time, and damaging company property. The court held that if the employer was justified in firing the payor then he cannot use his dismissal as a reason to reduce his support obligations. The court imputed income to the payor at the same level he was earning before his dismissal.
Finally, it is also important to note that leaving secure employment in favour of a riskier venture can also result in a court imputing income. In Le Page v Porter (2000 ONSC), the parent left a social worker position to engage in stock speculation and real estate investing. When his income plummeted; the court imputed income to him.
Conclusion
Whether unemployment will cause a reduction in support payments will depend on the circumstance of the individual. It may be possible to receive a substantial reduction, but it is also possible that a court will impute income and maintain the payment amount.
If you need any help with family law matters, contact A. Princewill Law Firm in Markham, Toronto, Pickering, and Scarborough. You can call us at (905) 492-7662 or email us at [email protected] to schedule a consultation.
