D. Most Current Information to Be Used

• Author: Julien D. Payne - Marilyn A. Payne
• Pages: 147-151

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Where, for the purpose of the Federal Child Support Guidelines, including any determination of income, any amount is determined on the basis of specified information, the most current information must be used.¹⁶¹ In determining income, the objective is to find the most reliable or fairest indicators as to what the individual’s current income is.¹⁶² The obligor’s income for the calendar year in which the application is heard is the income to be considered for the purpose of applying the Federal Child Support Guidelines.¹⁶³ Judicial

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determination of annual income of a parent should take account of a recent increase in salary so as not to deprive the children of this benefit.¹⁶⁴ There are two underlying principles established by the Federal Child Support Guidelines. The first is that the obligor’s annual income, not simply his or her monthly income, must be determined. The second is that the current annual income so determined should be a reliable and equitable measure of what the obligor will continue to receive annually, for it is this amount that determines the level of child support to be paid pursuant to the Guidelines.¹⁶⁵The most current information in some cases may be historical data and in other fact situations it may be that the most current financial situation that may be gleaned from evidence.¹⁶⁶"Most current information" in section 2(3) of the Guidelines is not limited to information for a time period that has yet to expire. The court may look at the pattern of income over preceding tax years in addressing an anticipated loss in the current year.¹⁶⁷Where the court considers it appropriate, the annual income of a spouse may be determined by reference to the obligor’s last income tax return¹⁶⁸or by extrapolation from the year-to-date earnings¹⁶⁹or pay stubs.¹⁷⁰The latter approach may be especially appropriate where there has been a significant recent decline in the spouse’s income,¹⁷¹but a court should decline to determine a parent’s prospective annual income from year-to-date earnings where the types of income typically lack consistency throughout the year.¹⁷²A court may endorse the use of a parent’s previous year’s income to determine child support payable in the following year where greater certainty and security will be thereby promoted and the court will avoid the deficiencies inherent in attempting to address ongoing payments on the basis of the current year.¹⁷³Where the parties have for several years functioned well under a system which required the exchange of the previous year’s tax returns, and where to attempt to impose a process of exchanging current income information subject to ex post facto review and audit would likely create the opportunity for conflict, then the previous system of determining income meets the test of fairness under the Guidelines and is in the best interests of the child.¹⁷⁴Projecting an annual income from a very limited pay period may be somewhat speculative, in which event the court may choose to exercise some discretion in determining a

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spouse’s probable annual income.¹⁷⁵Projected earnings for the current year may be a more reliable indicator of the obligor’s income than historical information that includes non-recurring amounts, but historical information may be relied upon to assess the obligor’s probable overtime pay.¹⁷⁶A court should always be vigilant when facing an assertion that runs contrary to the historical pattern of conduct,¹⁷⁷but judicial recourse to the historical pattern of income does not justify an imputation of additional income where there has been a genuine reduction of income that reflects market conditions.¹⁷⁸Judicial recourse to the parent’s pre-separation pattern of considerable overtime income may not constitute a reliable basis for imputing prospective overtime income to the parent after the spousal separation.¹⁷⁹Section 16 of the Federal Child Support Guidelines stipulates that income is determined using the sources of income set out under the heading Total Income in the T1 General form issued by the Canada Revenue Agency. This section does not direct the court to determine income on the basis of the amount set out in the preceding year’s tax return. Rather, it requires the determination of income to be made by reference to the "sources of income" set out in the T1 General tax form.¹⁸⁰It is the sources of income, not their historical amounts, that must be considered pursuant to section 16 of the Guidelines.¹⁸¹The basic responsibility of the court is to determine a fair figure for the current income from which support is to be paid.¹⁸²If the historical record does not provide a reliable foundation for assessing income, the court may impute income on the basis of the anticipated future income earning capacity according to the best evidence available.¹⁸³In the case of an employed spouse or former spouse who is obliged to disclose income information, section 21(1)(c) of the Guidelines requires disclosure of a recent statement of earnings setting forth the total earnings paid in the year to date. This is intended to allow the court to calculate what the spouse’s current annual earnings are for the purposes of applying section 16 of the Guidelines.¹⁸⁴Although the production of the three most recent tax returns and notices of assessment or reassessment may assist the court in a number of ways, the objective of the court is to find the most

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reliable indicator of the individual’s current annual income. In pursuing this objective, the court should have regard to all of the information before it, including the three most recent tax returns, the year to date income of an employee spouse, and any other evidence that is placed before the court that might assist in determining the individual’s present annual income. An individual who asserts that his or her current annual income is going to be less than that of previous years has the onus of providing substantive verification or explanation of the anticipated change. The nature of the verification or explanation will depend on the circumstances of the case but the bold assertion that a reduced income is anticipated will not suffice.¹⁸⁵Judicial determination of the obligor’s income by reference to his or her income tax return for the preceding year,¹⁸⁶or by averaging the income over those years,¹⁸⁷may be inappropriate where there is credible evidence that overtime income is likely to decrease.

In assessing the amount of child support under...