Child support should reflect each parent's actual financial circumstances. When one parent is not transparent about income, however, determining a fair amount can be difficult. Income may be understated through unreported earnings, cash work, corporate benefits, deferred company income, or incomplete disclosure. Sometimes complex business arrangements, make a parent's true income difficult to determine.
Child support is the child's right, and both parents must contribute based largely on their incomes. Tax records usually make the calculation straightforward, but reported income may not always reflect the full financial picture. For example, a parent reporting $40,000 while owning several properties, travelling frequently, and spending heavily may invite questions. Those facts do not prove hidden income, but they may justify closer scrutiny.
Reciprocal financial disclosure is therefore essential. Depending on the circumstances, required records may include:
Cash-based businesses present similar challenges. Where credible concerns arise, bank and business records, invoices, property ownership, spending patterns, and other lifestyle evidence are likely very relevant. Lifestyle evidence may include:
If you suspect your ex is under-reporting, focus on evidence rather than accusations. Keep relevant communications, public business information, property records, and other material that lawfully comes to your attention. Suspicion alone is not proof. Claims of hidden income should be supported by evidence wherever possible and in turn detailed scrutiny of finances may be required.
For the above reasons, there may be very good reason to set income higher than a parent’s reported yearly income, often referred to as their “line 150” income. The legal definition of this means that that person’s income is being set at different guideline income amount, or it is being imputed at a different income amount than what is reported. Child support should be based on accurate financial information, not simply the figure a parent chooses to report on a tax return.
In Alberta, the case of Peters v Atchooay, 2022 ABCA 347, is the precedent case that informs the analysis of imputation of income. In Peters, the Aberta Court of Appeal addressed circumstances in which reported income may not fairly represent the amount available for child support. The court of appeal confirmed in Peters, income can and will be imputed where a parent is intentionally under-employed, fails to disclose adequately, or has financial resources not reflected in reported income.
Here at Family Central Law we can assess whether disclosure is complete, identify additional records to request, and advise whether the evidence supports asking the court to use a different income figure. Additionally, if your ex is refusing to disclose this does not end the matter. A formal request may resolve the issue. Legal procedures can compel disclosure or allow the court to address the missing information.
You do not have to accept an unexplained or unsupported income figure. The goal is accurate disclosure and a support amount that reflects the law and the family's circumstances. If you suspect hidden or under-reported income of another parent, please contact us today for a free consultation with our family lawyers by calling our office at 1-866-278-4187, or emailing info@familycentrallaw.com, or by clicking on our consultation page.
Early legal advice can help identify disclosure gaps and the appropriate next steps.
Child support is the child's right, and both parents must contribute based largely on their incomes. Tax records usually make the calculation straightforward, but reported income may not always reflect the full financial picture. For example, a parent reporting $40,000 while owning several properties, travelling frequently, and spending heavily may invite questions. Those facts do not prove hidden income, but they may justify closer scrutiny.
Reciprocal financial disclosure is therefore essential. Depending on the circumstances, required records may include:
- Income tax returns and notices of assessment
- Statements of employment income;
- Recent pay statements;
- Records relating to self-employment or business income;
- Information about benefits or other compensation;
- Corporate financial statements;
- Detailed documentation for general ledgers, balance sheets, profit and loss sheets;
- Detailed Shareholder loan records;
- Documentation concerning significant assets or sources of income; and
- Other financial records relevant to determining income.
Cash-based businesses present similar challenges. Where credible concerns arise, bank and business records, invoices, property ownership, spending patterns, and other lifestyle evidence are likely very relevant. Lifestyle evidence may include:
- Expensive vehicles;
- Frequent travel;
- Significant discretionary spending;
- Multiple properties;
- Major renovations;
- Large cash purchases; or
- Other expenditures that appear difficult to reconcile with reported income.
If you suspect your ex is under-reporting, focus on evidence rather than accusations. Keep relevant communications, public business information, property records, and other material that lawfully comes to your attention. Suspicion alone is not proof. Claims of hidden income should be supported by evidence wherever possible and in turn detailed scrutiny of finances may be required.
For the above reasons, there may be very good reason to set income higher than a parent’s reported yearly income, often referred to as their “line 150” income. The legal definition of this means that that person’s income is being set at different guideline income amount, or it is being imputed at a different income amount than what is reported. Child support should be based on accurate financial information, not simply the figure a parent chooses to report on a tax return.
In Alberta, the case of Peters v Atchooay, 2022 ABCA 347, is the precedent case that informs the analysis of imputation of income. In Peters, the Aberta Court of Appeal addressed circumstances in which reported income may not fairly represent the amount available for child support. The court of appeal confirmed in Peters, income can and will be imputed where a parent is intentionally under-employed, fails to disclose adequately, or has financial resources not reflected in reported income.
Here at Family Central Law we can assess whether disclosure is complete, identify additional records to request, and advise whether the evidence supports asking the court to use a different income figure. Additionally, if your ex is refusing to disclose this does not end the matter. A formal request may resolve the issue. Legal procedures can compel disclosure or allow the court to address the missing information.
You do not have to accept an unexplained or unsupported income figure. The goal is accurate disclosure and a support amount that reflects the law and the family's circumstances. If you suspect hidden or under-reported income of another parent, please contact us today for a free consultation with our family lawyers by calling our office at 1-866-278-4187, or emailing info@familycentrallaw.com, or by clicking on our consultation page.
Early legal advice can help identify disclosure gaps and the appropriate next steps.
