BACKGROUND

The parties married in November 2004 and separated in March 2014. There are 2 children of the marriage.

In December 2014, the parties entered into a separation agreement, where the Respondent father agreed to pay $1,392 per month in spousal support and $1,330 per month in child support based on an income of $93,000. The parties had a shared parenting arrangement from 2014 until March 31, 2022, when the children began residing primarily with the Applicant mother.

The mother is now seeking to vary the terms of the Separation Agreement.

ISSUES

1. Should either party be imputed at a higher income?
2. Should child support be varied retroactively?
3. How should section 7 expenses be fixed?
4. Should spousal support be varied retroactively? When should spousal support terminate?

ANALYSIS

1. Should either party be imputed to a higher income?

The Respondent’s Income

Both parties agreed that the Respondent father’s income for child support purposes should be valued as the following: $180,000 for 2020, $155,453 for 2021, and $170,521 for 2022. The Respondent agreed to table child support, despite having an income greater than $150,000.

The Applicant’s Income

There’s a 3-part test to determine whether income should be imputed:

1. The onus is on the party seeking to impute income to prove that the other party is intentionally unemployed or underemployed.

1. 1. There is evidence that the Applicant is physically able to work, has post-secondary education and experience that would contribute to a workplace, and has worked as recently as 2019. The Applicant is also fluent in 3 languages, and both of the children are in school full-time. Thus, the Applicant has the time to work.
   2. Based on the above, the Respondent proved that the Applicant is intentionally unemployed.

2. Are there reasonable educational, health, or child needs that prevent the Applicant from working?

1. 1. The Applicant has a significant education. She also has the time to retrain if required. There is no health reason for the Applicant to not work, nor are any accommodations required. Further, both children attend school full-time, so they do not require the Applicant’s care during this time.

3. The onus then shifts to the party disputing the imputed income to show the reasonableness of their decision to not work.

1. 1. The Applicant has no evidence and no reasonable explanation for why she is not working. The Court also noted that the Applicant’s efforts to obtain employment were perfunctory at best.

Thus, the Court determined that income will be imputed to the Applicant considering her age, education, experience, skills, and available opportunities.

The Applicant owns 2 homes and rents out one of them. Further, in 2018 and 2019, the Applicant earned an annual salary of approximately $60,000. The Respondent hired a vocational evaluator and estimated that the Applicant’s earning potential is between $70,000 and $78,000 per year.

The Court accepted the Respondent's evidence and determined that the Applicant be imputed an annual income of $70,000 plus an amount for rental income of $14,000 (the amount of rental income minus expenses incurred for the property). The income imputation is effective January 1, 2020 (see child support section below).

2. Should child support be varied retroactively?

Both parties agreed that the Respondent’s income increased for the purposes of child support, and that there was a change to the parenting arrangements in March 2022, when the children began to live primarily with the Applicant.

The Court has the authority to make retroactive support orders under section 34(1)(f) of the Family Law Act. Both parties agreed that support should change retroactively to January 1, 2020, and the Court agreed.

Amount of Child Support Owed

Section 9 of the Child Support Guidelines states that where parents are sharing parenting time with the children, such that each parent has no less than 40% if the time over the course of a year, then child support must be determined by considering: (a) the Table amount for each parent; (b) the general increased costs of shared parenting time; and (c) the conditions, means, needs, and other circumstances of each parent and child.

Here, the Court found that the parties will have an offset of child support arrears, based on the Applicant’s imputed income of $84,000 and the Respondent’s evaluated income, effective January 1, 2020. Thus, the Applicant owes the Respondent approximately $19,000.

The Court also ruled that the Respondent owes the Applicant $9,804 in child support for 2 children from April 1, 2022 and April 30, 2023. Finally, the Respondent will continue to pay table child support in the amount of $2,232 per month.

3. How should section 7 expenses be fixed?

The Court determined that the parties should share any special expenses not covered by insurance proportionate to their incomes. Specifically, the Court found that the parties should share any outstanding and future costs of their daughter’s cochlear implants, proportionate to their respective incomes: 67% to the Respondent and 33% to the Applicant.

4. Should spousal support be varied retroactively? When should spousal support terminate?

The Applicant is seeking indefinite increased spousal support; the Respondent is seeking to terminate spousal support. Both parties agreed that changes to spousal support should be effective January 1, 2020.

There are various grounds for entitlement to spousal support, including compensatory and where the spouse is unable to become self-sufficient and the support is based on need. Further, the Court noted that the recipient must make reasonable efforts to become economically self-sufficient.

The Court must also determine whether there was a material change in circumstances since the original order when looking at whether to vary spousal support. The test for this is: (1) there is a change in the condition, means, needs or circumstances of the child and/or ability of the parents to meet those needs; (2) the change must materially affect the child; and (3) the change could not have been reasonably contemplated by the judge who made the initial order.

Here, the judge determined that there was a material change in circumstances.

Quantum

Although the Respondent’s income increased, the Applicant is not automatically entitled to share in the Respondent’s post-separation increase in income. The Court stated that the court’s assessment of the needs of the recipient is a significant factor in determining sharing of post-separation income increases. Further, evidence that the recipient spouse has not taken reasonable steps towards fulfilling self-sufficiency is another factor that courts consider.

In this case, the Court noted that there is no evidence suggesting that the Applicant’s pre-separation efforts contributed to the Respondent’s post-separation business, and the parties equally shared in the children’s care post-separation. Further, the Applicant owns 2 properties and earns rental income. The Applicant also only had the children for half the time until March 2022, after which the children were in school full-time. In addition, the Court stated that the Applicant had 10 years since separation to pursue her own employment income.

Thus, the Court decided that the Applicant should not share in the Respondent’s post-separation increase of income from his new business.

In applying the SSAG formula, the Court used the high-range spousal support amounts. Per the Court’s SSAG calculations, the Respondent overpaid spousal support at the high-end range by $29,264 starting from January 2020, using the Respondent’s evaluated income and the Applicant’s imputed income.

Finally, based on the above factors, the Court found that the Applicant’s entitlement to spousal support ends on March 31, 2022.

CONCLUSION

The Court ruled that (1) the Applicant’s income is imputed at $84,000 for child and spousal support purposes; (2) the Respondent will continue to pay monthly table child support in the amount of $2,232 per month; (3) each party owes the other child support arrears; (4) spousal support terminates March 31, 2022; (5) the Respondent will pay 67% of the daughter’s cochlear implants; and (6) section 7 expenses will be shared in proportionate to the parties’ incomes.