Other factors determining annual income for purposes of the guidelines

Sometimes, a parent may feel that his or her income for tax purposes (or that of the other parent) does not provide a fair description of that person's income. If the parents cannot agree that this is the case, either parent can ask the court to look at other factors to calculate the correct level of income.

The court may consider:

• whether income has steadily increased or decreased over the past three years;
• if income has fluctuated significantly over the past three years;
• if the parent has received a one-time amount of money (for example, if the parent has received an inheritance, all or none of this amount may be included);
• if there were exceptional business or investment profits or losses during a particular year; and
• if the parent is a shareholder, officer or director of a corporation, all or part of the corporation's pre-tax income for the most recent taxation year, or what the person would earn if he or she were being paid for the services provided to the corporation (as long as that amount is less than the corporation's pre-tax income). In determining a corporation's pre-tax income, the court will include the corporation's payments such as salaries, wages, management fees and similar expenses.

Income may also be attributed to a person for purposes of applying the guidelines in some situations. For example, the court may attribute income where a person:

• is found to be intentionally underemployed or unemployed (unless the reason is related to caring for a child, or reasonable education, or health needs of the parent);
• is not required to pay federal or provincial income tax;
• lives in a country where income tax rates are significantly lower than Canada's;
• has withheld income information;
• gets a large part of income from dividends, capital gains or other sources with a lower tax rate;
• is, or will be, receiving income or other benefits from a trust;
• is placing income elsewhere to conceal it (for example, putting it in someone else's name);
• does not reasonably use property and resources to generate income (for example, the paying parent may have too much money tied up in land or business investments, reducing the amount of cash available for child support); or
• unreasonably deducts expenses from income.

The court will attempt to obtain a precise income amount for either or both of the parents, one that fairly reflects the parent's actual income, in order to properly apply the guidelines.