Because child support in Alberta is calculated based on the payor’s income, some payors take on a lower-paying job or choose to work less so their child support requirements will be lower. When this happens, the Court may decide to impute income to the payor—that is, to assign the payor a minimum income to fulfill their responsibilities to their children.
For the past 21 years, before the Court would impute income to a payor, Alberta law required evidence to prove that a payor had intentionally made a career change to avoid child support obligations. Proving this could be extremely difficult.
A recent Alberta Court of Appeal case has brought about welcome change to the law on this issue.
The Peters v Atchooay 2022 Appeal Case
In the case of Peters v Atchooay 2022, Ms. Peters and Mr. Atchooay had two children during their common-law relationship between 2007 and 2013. After their separation in 2014, Ms. Peters had full custody of the children. Based on Mr. Atchooay’s stated income of $112,000, he was ordered to pay $1,865 in child support each month.
Between December 2014 and December 2020, $124,534.17 in child support arrears accumulated. In January 2021, Mr. Atchooey applied to retroactively recalculate child support arrears based on more recent income tax returns demonstrating a significantly lower income.
Mr. Atchooey stated the following reasons for his reduced income:
- Loss of his driver’s license due to an impaired driving charge
- Repossession of his vehicles
- A consumer proposal to address his debt load
- Challenges he faces as an Indigenous man
- Struggles with mental health
Based on the information Mr. Atchooey provided at that time, the judge decided in his favour and reduced his child support arrears to $43,111.37.
In October 2022, Ms. Peters successfully appealed this decision based on two main issues:
- The approach to imputation of income in cases of intentional underemployment or unemployment
- The “deliberate evasion test”
The Court agreed to change Alberta law on these issues, allowed Ms. Peters’ appeal, and disallowed the retroactive adjustment to Mr. Atchooay’s child support obligation for some of the years in question, and required a recalculation of his obligations for 2015-2020.
Alberta’s New “Reasonableness Test” Approach to Imputing Income
The appeal of Ms. Peters has brought Alberta law in line with the child-centered approach of other Canadian provincial laws that promote fairness to the child. The Alberta Court now takes a different approach to decide on imputation of income. Before, it used the “deliberate evasion test”. Now, it uses the “reasonableness test”.
The “reasonableness test” asks three questions:
- Is the parent in question intentionally underemployed or unemployed?
- Do the listed exceptions to imputation of income in section 19(1)(a) of the Federal Child Support Guidelines apply?
- Should judicial discretion to impute income be exercised?
Alberta courts can now hold child support to pre-job-change levels and impute income where the career choice is:
- Not the result of circumstances truly beyond the payor’s control (such as lay-offs, reduced hours, or termination without cause)—in other words, the career change is voluntary
- Not required by the needs of the children or by the reasonable educational or health needs of the parent
- Not reasonable, having regard to all the circumstances
What is a reasonable career move under Alberta law?
Under Alberta’s new law, parents should be mindful of the following non-exhaustive list of governing principles before making a career change.
- A healthy parent with the ability to work has a duty to work, regardless of work experience or job skills.
- The financial support of your children must come before personal goals and lifestyle choices.
- A payor is not required to pursue maximum earning potential in all circumstances, but should aim for “reasonable” earning capacity based on factors like age, education, experience, skills, health, and availability of work.
- Agreements made between the parents before the separation about parenting, financial, or employment arrangements do not determine what is “reasonable” after the separation.
- “Reasonableness” involves various factors, including the degree to which child support is impacted and the effect of reduced child support on the child.
- A claim of “It’s in the child’s best interests” or “I’ll be a better parent if I work less” is not enough to justify a reduction of employment or income.
- Underemployment or unemployment for the purpose of evading child support is never reasonable.
Alberta’s new law takes a practical approach that places responsibility on the payor to establish that their income is reasonable and prioritizes the well-being of the children.
Child Support Lawyers in Alberta
It’s important to understand your rights and obligations as a parent after separation or divorce. The reasonableness of a change in employment is based on several factors and decided on a case-by-case basis. Contact a family lawyer at Getz Collins and Associates for more information.