Self-Employed with No Income: Do You Still Have to Pay for Child Support?

nichollealtitudeb2
Jun 20
5 min read

When parents separate, one of the most common questions we hear as family lawyers is this:

“I’m self-employed and not earning any income right now. Do I still have to pay child support?”

The short answer is: Yes, it’s possible.

A recent Ontario court case shows how courts can impute income to someone who is unemployed or underemployed, even if they claim they’re starting a new business or are between jobs.

In this post, we’ll walk through a real-life example from the Ontario courts, explain how income imputation works, and show why working with a family lawyer is essential in these types of situations.

Child support agreement with gavel on desk representing family law case in Ontario.

The Case: A High Earner Who Stopped Working

Let’s look at a 2023 case (names changed for privacy):

Fiona Bagust-Homes and Gregory Devine were married for nearly 18 years before separating in 2021. They have two children, ages 16 and 11, and share equal parenting time.

During the marriage, Gregory worked as a foreign exchange trader and earned over $500,000 per year. He was fired from his last job in 2018 and hasn’t worked since. That’s five years without employment.

After the separation, Fiona asked the court to order Gregory to pay for both child support and spousal support. She also asked the court to assign him an income of $200,000 per year for support purposes.

Gregory argued he wasn’t intentionally avoiding work; he said he was starting a trading business using money from the sale of their home. But he hadn’t earned any income yet.

So, what did the court decide?

The Court’s Decision: Income Was Imputed

The court ruled that Gregory was intentionally unemployed.

Despite having a strong employment history, advanced financial certifications, and a consistent track record of high earnings, he hadn’t applied for any jobs or provided proof of job search efforts.

Instead, he gave the court a spreadsheet listing 235 companies he claimed to have contacted, but no actual applications or responses were submitted.

The court had to decide based on this background and past earnings, which was to impute an income of $200,000 to Gregory for support purposes.

This means that to calculate his support obligations, the court treated him as if he was making $200,000 a year when calculating his support obligations. Even if, at the time, he wasn’t earning anything.

What Is Income Imputation?

“Income imputation” means assigning a level of income to someone even if they aren’t currently earning it.

Courts do this when there’s evidence that someone is:

Deliberately staying unemployed
Working below their earning potential
Starting a new business without a realistic plan or track record

It’s important to note that intent to avoid support isn’t required, just that the person isn’t making a reasonable effort to earn what they’re capable of earning.

As the court stated:

“A parent will not be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations or interests.”

How Much Did He Have to Pay?

Because the couple shares equal parenting time, the court used the set-off method under the Child Support Guidelines to calculate child support.

With Fiona earning about $52,000 and Gregory imputed at $200,000, the difference meant Gregory had to pay Fiona $1,881 per month in child support.

He was also ordered to pay $2,534 per month in temporary spousal support, ensuring both parties had equal net disposable income after support payments.

Gregory was allowed to use part of the proceeds from the house sale, about $80,000, to make those payments until trial.

Why This Matters for Child Support

Child support is not about punishing or rewarding a parent’s choices. It’s about meeting the needs of the child.

If one parent chooses to stop working or reduce their income significantly, the court won’t let that financial choice, mostly taken for personal benefits, hurt the child.

That’s why a person’s past earnings, education, and skills are always investigated by judges to determine what they could reasonably earn, even if they’re not earning it now.

Spousal Support and Capital-Based Living

Gregory argued Fiona didn’t need spousal support because she received over $1 million from the sale of the family home.

The court acknowledged her access to capital but still found that temporary spousal support was appropriate to balance the income gap. But with a restraint:

The court made it clear that long-term spousal support may not be justified if Fiona continues to rely on capital instead of returning to full-time work.

What You Should Do If You’re Facing a Similar Situation

If you're involved in a dispute over child support or spousal support, here are some practical steps to protect your rights:

1. Talk to a Family Lawyer as early as possible:

A qualified family lawyer can help you understand whether income might be imputed to you, or whether you can argue for income to be imputed to the other parent.

2. Keep Detailed Records:

If you’re claiming you’re trying to earn income or starting a business, document every step: job applications, networking, certifications, and even unsuccessful attempts.

3. Don’t Rely Solely on Capital:

Having money from property sales or savings doesn’t mean you can skip out on support. Courts expect parents to work unless there’s a valid reason not to work.

4. Be Honest About Your Plans:

If you’re self-employed or planning to start a business, be honest about your goals and provide realistic timelines. Courts are far more likely to show sympathy if your plans are well-documented, time-organized, and reasonable.

Final words by Michael Lyore Law

Not having a job or declared income doesn’t mean you’re off the hook for child support or spousal support.

Courts will look closely at your background, past earnings, and efforts to earn income before deciding what support should be paid. It’s not about whether you currently have earnings, but if you can have them and if you’re actively searching for them.

Whether you’re asking for support or defending against a claim, working with an experienced family law lawyer helps ensure your rights are protected and your case is built on solid ground.

At Michael Lyore Law, we help clients understand their options, prepare strong cases, and fight for fair outcomes.

If you're going through a separation or divorce and are unsure about your support obligations or entitlements, don’t try to handle it alone.

Disclaimer: This article provides general information only and does not replace personalized legal advice. For help with your specific situation, speak to a licensed family law lawyer.