Can I quit my job to avoid paying my ex child support?

The answer is no, probably not. If a payor is seeking to quit their job simply to avoid paying child support, this is likely a non-starter.

However, if a payor’s reduction in income falls within one of the reasonable exceptions, and evidence supporting this is provided, a payor may avoid having income imputed to them for the purposes of support.

However, if a child support payor’s choice to quit their job thereby reducing their income, does not fit within an exception, the payor risks the Court imputing income to them for the purposes of support if they are found to be intentionally underemployed or unemployed.

The Federal Child Support Guidelines prescribes at section 19 that the Court has discretion to impute income where a parent is intentionally under-employed or unemployed.

The Algner v Algner, 2008 SKQB 132 decision of Madam Justice Ryan-Froslie (as she was then) remains the leading decision on this issue and has clearly set out the guiding principles respecting the imputation of income.

That case notes that a parent has an obligation to seek employment commensurate with their ability to earn income, and as a general rule, a parent cannot avoid his or her child support obligations by a self-induced reduction of income. However, parents are entitled to make employment or career changes that may impact their ability to pay child support so long as the decision is reasonable in the circumstances.

The first stage of the analysis is determining whether the payor is intentionally under-employed, and then, to determine whether any of the exceptions as set out at section 19(1)(a) of the Guidelines are applicable, namely, whether the under-employment or unemployment is required by reason of:

(i) the needs of a child of the marriage;

(ii) the needs of any child under the age of majority;

(iii) the reasonable educational needs of the spouse; or

(iv) the reasonable health needs of a spouse.

If the Court determines that a parent is intentionally under-employed, the onus then shifts to the parent earning less than they are capable of to demonstrate that their choice was reasonable in the circumstances. The Court does not need to first find that the parent is intentionally avoiding their child support obligation, only that it was a voluntary choice to become under-employed or unemployed.

A number of scenarios could be considered to fall within the exceptions when parties voluntarily leave their employment.

Given the limited scope of this article, I will touch on the health and reasonable educational needs exceptions.

If a health reason, namely the reasonable health needs of a spouse is being relied upon to justify a reduction in income and lower support, the Court needs to be satisfied that a career change is reasonable and require cogent evidence from a medical specialist establishing that the payor cannot do the work they did prior to quitting their employment.

It is critical that a medical specialist provide this evidence, as the Court in Clement v Bridges, 2013 SKQB 356 gave little weight to a chiropractor’s opinion as to whether the payor could continue to work on oil rigs, indicating that chiropractors are not medical doctors, nor are they qualified medical specialists and income was imputed to the payor.

The Court considered the reasonable educational needs exception in the Hinz v Hinz, 2017 SKQB 248 and D.A. v S.A., 2017 SKQB 108 decisions. In these cases, the Court found that a parent who decided to further their education despite having secure, fulltime employment with respectable income, that the practical implication on employment choices and salary was remote and modest. Accordingly, in finding the educational pursuit was not necessary nor reasonable for a parent to reduce their income to pursue this opportunity when there were child support obligations, the Court imputed income to the payors.

Accordingly, there is a wide array of facts that may support a reduction in income, provided it is reasonable and evidence in support is furnished. If you are the recipient of support or the payor of support and seek to reduce your obligations, I recommend you seek legal advice with respect to your family law matter.

Contacting a Lawyer on this Subject

Siobhan Morgan’s primary focus rests on family law and wills and estates. For more information on this subject, contact Siobhan at 1 306 933 1308.

The above is for general information only. Parties should always seek legal advice prior to taking action in specific situations. 

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Protecting Your Assets the Right Way

A creditor bearing down on you, or an impending bankruptcy, brings many concerns and unknowns. You may have a family farm, a collectible such as an antique car or other assets that you wish to protect from your creditors. In order to save those assets, you may think it is prudent to transfer those assets to a spouse, family member or close family friend. However, these types of approaches are not as straightforward as they sound and can come with pitfalls where the transfer is not properly completed.

Before attempting to protect your assets, a few helpful tips should be remembered.

Transfer The Asset for Fair Market Value

This is the most important rule to remember. If you have a quarter section of land or an antique car, you cannot simply gift it away to a family member before assigning into bankruptcy. All transfers when you are, or are about to be, insolvent will be subject to scrutiny. The Fraudulent Preferences Act requires that all transfers to a non-arm’s length party (think someone you know better than an acquaintance) require the transfer to be for fair market value.

In order to do so, it is generally advisable to obtain a valuation from an arm’s length third party, such as an auctioneer. Having these objective benchmarks will allow you to show to your creditors, and the Court if necessary, that the transfer was within reason.

However, just because you have transferred the asset for fair market value does not mean you are out of the woods. The cash you receive for those assets needs to be accounted for, as your creditors may be entitled to a share of those funds as well. If you are planning a transfer, you should consult with your legal advisors as to if those funds should be held in a segregated trust account, paid directly to creditors or otherwise.

Among other things, you will want to make sure you account for your secured creditors who may have a security interest in the asset you have sold.

The Asset May be Exempt

Just as important to consider is the fact that the transfer may be unnecessary. There are various pieces of legislation that provide bankrupt parties with exemptions, meaning certain assets cannot be seized. This is especially true for farmers, who, provided they have a plan to continue actively farming, may be able to retain many of their farming assets.

It may be that the transfer is unnecessary, and you are not only incurring extra work and expense, but you are also raising the suspicions of your creditors. A careful evaluation of whether or not the asset is even capable of seizure should be done before you begin to decide where and how to transfer it.

Conclusion

Of course, before any transfer of this nature is undertaken, you should consult with both your legal professional and/or your insolvency professional to ensure you are acting in accordance with the law. Transfers prior to an insolvency will raise red flags for any creditor, so you will make sure the reward outweighs the risks and difficulties you will face.

Should you have questions, please contact Robertson Stromberg today to begin the process.

Contact a Lawyer on this subject.

Travis K. Kusch

Direct: (306) 933-1373
Main: (306) 652-7575
Fax: (306) 652-2445
Email: [email protected]

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