Comparison of Income Imputation Approaches in Osanebi v. Osanebi and de Pimentel v. Rodriguez

Income imputation in family law occurs when a court assigns an income to a non-disclosing or underemployed spouse to calculate child or spousal support. This process requires courts to balance fairness with evidence-based reasoning. Two recent Ontario cases, Osanebi v. Osanebi (2023) and de Pimentel v. Rodriguez (2024), address whether statistical measures like median income or minimum wage should be used when imputing income in the absence of reliable evidence. While Osanebi embraced the use of median income as a default for fairness, Rodriguez rejected it due to evidentiary concerns, reaffirming established principles. It is important to note that Osanebi is an outlier case and does not reflect the typical judicial approach to income imputation at this time.

What Is Income Imputation?

Income imputation is a method used in family law when a party fails to provide adequate financial disclosure or deliberately minimizes their income to reduce support obligations. The court imputes (assigns) an income based on factors such as:

• The party’s education, skills, and employment history.

• Job opportunities and earning potential in the local market.

• Evidence of past income or lifestyle.

  
  

The purpose is to ensure fair support calculations under the Child Support Guidelines (CSG) or Spousal Support Advisory Guidelines (SSAG).

Median Income and Minimum Wage

• Median Income: The middle point in a set of earnings where half of earners make more and half make less. For example, if the median income for a particular trade is $83,000, this reflects a "typical" earning level, avoiding the distortion of extremely high or low outliers.

  
  

• Minimum Wage: The lowest hourly rate that employers are legally required to pay. In Ontario, the minimum wage is currently $15.50 per hour (approximately $30,000 annually for full-time work). Courts often use minimum wage as a baseline for imputing income when no other evidence is available, as it reflects the least an employable adult could earn.

  
  

Analysis

Osanebi v. Osanebi (2023): Median Income as a Default

Justice Akazaki took an unusual approach, advocating for imputing income based on median income when respondents fail to disclose their earnings. He criticized defaulting to minimum wage and emphasized:

1. Fairness: Minimum wage reflects only the lowest 10% of the workforce and is unrepresentative of most earners. Using it disproportionately burdens custodial parents while rewarding income concealment.

   
   

2. Pragmatism: Median income, such as the Canadian average hourly wage of $30 (approximately $50,000 annually), offers a more realistic baseline aligned with practices in other legal areas, like personal injury.

   
   

3. Policy Impact: Imputing median income incentivizes respondents to engage with proceedings and provide accurate disclosure, knowing the court will otherwise assume they earn at least an average income.

   
   

Justice Akazaki imputed an income of $50,000, combining historical data with statistical averages. This approach, however, diverges from the traditional evidentiary framework in family law and remains an outlier.

de Pimentel v. Rodriguez (2024): Rejecting Median Income

Justice Myers rejected median income, reaffirming the established principle that income imputation must be based on admissible, respondent-specific evidence. He reasoned:

1. Evidentiary Standards: Statistical averages, like median income, are irrelevant without evidence connecting them to the respondent’s skills, education, and job history. Myers cautioned against arbitrary imputations based on generalized data.

   
   

2. Historical Income: The respondent’s last known income of $50,000 was the only reliable figure available. This evidence-based approach adhered to Drygala v. Pauli (2002), which emphasizes that imputations must be grounded in the respondent’s specific circumstances.

   
   

3. Judicial Rigor: Myers stressed that while non-disclosure poses challenges, courts cannot abandon evidentiary principles for policy-driven shortcuts like median income without expert evidence to provide context.

   
   

Conclusion

Justice Akazaki’s decision in Osanebi is an outlier, advocating for the use of median income as a default imputation to address systemic non-disclosure issues. In contrast, Rodriguez reaffirms the more traditional approach, requiring income imputations to be based on specific, admissible evidence linked to the respondent’s circumstances. This divergence underscores the evolving judicial considerations in cases of financial non-disclosure but affirms that Osanebi does not represent the prevailing standard in Ontario courts.