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What if my partner is paid in cash or is hiding money to avoid paying child support?

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What if my partner is paid in cash or is hiding money to avoid paying child support?

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Reviewed: 
September, 2015
Answer

Usually child support is based on the gross annual income of the parent paying support and the number of children entitled to support. Gross income means income before taxes and most other deductions.

The payor parent must give detailed information about their income. This can include:

  • income tax returns and notices of assessment
  • pay stubs or statements from employers
  • financial statements of any business they own
  • statements from employment insurance, social assistance,  a pension, or worker’s compensation 
  • proof of income from a trust

Hidden income

Sometimes these documents do not show the whole picture of what the payor parent makes or could be making. This can be because they:

  • work for cash
  • are not actively looking for a job
  • are underemployed by only working part-time or in a low paying job
  • are not reporting all their income
  • are giving false information
  • are self-employed and claiming deductions that are not true business expenses or keeping money in their company that could be used for support

You partner might be doing these things to avoid paying child support or to pay less child support.

In these situations, you can ask the judge to impute income. This means asking the judge to decide that your partner earns more than they say or can earn more.

A judge imputes income based on what the payor parent is capable of earning or what the judge thinks the payor parent actually earns. The judge looks at things like their work history, past income, education, lifestyle, and job opportunities.

1. Find out how much your partner makes

The amount of child support is based on your partner's gross annual income and the number of children entitled to support.

Gross income means income before taxes and most other deductions. There are two ways to find this amount:

  • Look at line 150 of the payor parent's income tax return or notice of assessment from the Canada Revenue Agency.
  • Look at pay stubs for a full year and add up the earnings before deductions.

Payor parents must give detailed information about their income. This is called financial disclosure. It can include:

  • income tax returns and notices of assessment for the last three years
  • pay stubs or statements from employers
  • financial statements of any business they own
  • statements from employment insurance, a pension, and worker's compensation  
  • proof of income from a trust

It is very important that you get complete and honest information. You should not sign or agree to anything until you're sure you have all the information you need.

Sometimes financial documents do not show the whole picture of what a partner makes or could be making. This can be because they are hiding income.

Reviewed: 
January, 2017

2. Get evidence that your partner has more income

There are ways to prove that your partner is not being honest about their income.

You can look for evidence that your partner's lifestyle does not reflect what they say they make. For example, the value of their car or home may be higher than they can afford on the income they say they earn.

If there is financial disclosure, credit card and bank statements will show how much your partner is actually spending each month and what they buy.

If your partner is self-employed or owns their own business, copies of their financial statements will show the kinds of deductions they make.

You can also hire a private investigator to follow your partner and collect evidence that shows they work on a regular basis.

Working for cash

When you were living together, your partner may have been working for cash and putting the money in a separate bank account. You can try to get copies of those bank statements. Or, you may have copies of old bank statements.

If the cash income was used to pay for renovations to the house or for family vacations, get receipts to prove this. This shows you were able to pay for things that would not have been possible with just the income shown on your tax returns.

Unemployed or underemployed

Your partner may quit their job, take another job at a lower pay, or work part-time even though full-time work is available.

If you think your partner is unemployed or underemployed on purpose, look for employment ads related to their type of work in the newspaper or online. Or, you can ask others in the same type of work about job opportunities that exist. This shows there are opportunities for your partner to work more.

Reviewed: 
January, 2017
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3. Talk to your partner

You and your partner can try to agree on their gross income without going to court. You can talk to your partner on your own, with the help of someone you both trust, or with the help of a lawyer or mediator.

If you know your partner works for cash or is unemployed or underemployed on purpose, talk to them about this. Tell them about the evidence you gathered.

Tell them if they are not honest you will ask the court to impute income. This means asking the judge to decide that your partner earns more than they say or can earn more.

Also try to agree on a way to get updated information about the payor parent’s income each year. You can agree to get copies of their most recent income tax return or notice of assessment every year. You can use this information to make sure the right amount of child support is being paid.

There is an online calculator at the Child Support Table Look-up that can help you figure out the table amount of child support.

If you and your partner agree, you can put what you've agreed to in a separation agreement. This is a written contract that you and your partner make.

Your separation agreement has to follow certain rules to make it binding and enforceable under the law. This means your agreement is made in a way that allows the court to order you or your partner to do what the agreement says, if either of you stop following it.

For example, the rules say before you sign your agreement, you must understand it, the process is fair, and that you and your partner give complete and honest information about your finances.

Legal Aid Ontario (LAO) has a service to help people with separation agreements. If your income is low enough, LAO covers the cost of up to 10 hours with a family lawyer to help you negotiate and draft a separation agreement.

Talking to your partner may not be an option where there is a history of partner abuse.

Reviewed: 
October, 2016
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4. Get help from a family law professional

If you cannot agree on your partner's income and child support, you can try getting help from a family law professional. These are neutral people who are trained to work with both of you to help you reach an agreement or make a decision for you.

Family law professionals can work in:

All of these processes are sometimes called alternative dispute resolution (ADR). They help solve your issues without going to court. Deciding which process is best for you depends on the facts of your situation and what you want. For example, a mediator doesn't make decisions for you, but an arbitrator does.

Some of the reasons to use ADR instead of going to court are:

  • You have more control over what happens to your case.
  • It can be faster and cheaper.
  • It can be less stressful.
  • It takes place in a private setting.

But, there are some situations where it may be better not to use ADR, such as:

  • There is a history of family violence, mental illness, or drug abuse.
  • You can't talk to your partner.
  • You can't work cooperatively with your partner.

Each family court location in Ontario offers subsidized mediation services. You can get up to 8 hours of mediation for a fee that is based on each person's income. You can use this service whether or not you're in court. If you're already in court, you can get up to 2 hours of mediation at the court free of charge.

In some areas, Legal Aid Ontario has a mediation service that is free if you or your partner's income is low enough. These mediators help with issues of custody, access, parenting plans, travel and vacation plans, parent communication, and child support.

You can also find mediators who offer their services at lower rates through JusticeNet. JusticeNet is a not-for-profit that helps people in Ontario whose income is too high to get legal aid and too low to afford standard legal fees.

Reviewed: 
September, 2016
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5. Ask the court to impute income

If you think your partner is hiding income or not earning what they could, you can go to court and ask the judge to impute income to your partner. This means asking the judge to decide that your partner earns more than they say or can earn more.

The judge imputes income based on what your partner is capable of earning or what the judge thinks your partner actually makes.

The judge does this by looking at your partner's:

  • work history
  • past income
  • age
  • skills
  • education
  • health
  • job opportunities
  • lifestyle

If the judge decides to impute income to your partner, they will use that amount to make decisions about child support when applying the Child Support Guidelines and the Government of Canada's child support tables.

Reviewed: 
September, 2016
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Learn more about this topic
CLEO (Community Legal Education Ontario/Éducation juridique communautaire Ontario)
Ontario Ministry of the Attorney General

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