What Happens if Your Ex is Hiding Income?

If your marriage has broken down, you may quickly discover that financial disclosure is an important – and perhaps contentious — part of the separation process with your Ex.

You might notice that your Ex has suddenly become secretive about their finances.  Or maybe you suspect they are actively hiding income.

The good news, is that the law is on your side:  In Ontario, as divorcing spouses you and your Ex are both legally required to provide full and honest financial information when dealing with issues such as child support, spousal support, and the division of property.

But legal theory is one thing; protecting yourself is another.  Here’s what you need to know.

When Things Aren’t Adding Up

You may be noticing little inconsistencies that lead you to suspect your Ex lacks financial transparency. These signs can look like many things:

• Perhaps your Ex claims to earn very little, despite continuing to maintain an obviously-expensive lifestyle.
• Maybe their income suddenly dropped after separation.
• Their business expenses might seem unusually high lately, compared to the past.
• Perhaps you suspect that your Ex is suddenly receiving payments in cash, for work they have done for others.
• Your Ex may own a corporation, and you suspect they are diverting their income through it.
• You may suspect they are failing to report non-salary sources of income, such as commissions or bonuses.
• Or, your Ex may be intentionally unemployed or underemployed, and you suspect it’s because they want to avoid or reduce their support obligations.

All of these can lead to the conclusion that your Ex is not being forthright about their finances, which in turn can lead to an unfair outcome for you.

So what’s the law on this kind of situation?

“Full and Frank Disclosure” is Required

Disputes over financial disclosure are actually quite common in separation and divorce, especially where one spouse is self-employed, operates a business, earns cash income, or has significant control over how income is reported.

Under the Ontario Family Law Rules, O Reg 114/99, both parties to a Family dispute have a clear and general obligation to make full disclosure of their financial situation.  Note also that these obligations are continuing – meaning there may be a need to update the figures, if things change.

However, depending on the type of issue between you, there can also be specific (often enhanced) legislative directives that apply to particular kinds of proceedings and determinations.

For example, if the dispute between you and your Ex pertains to determining child support, then you are both bound by section 21 of the Federal Child Support Guidelines to provide all of the following (as may be applicable):

• personal income tax returns for the three most recent taxation years;
• notices of assessment and reassessment for the three most recent years;
• current pay information, such as:
  • recent pay stubs,
  • statements of earnings, or
  • employer confirmation letters;
• financial statements for self-employed spouses;
• corporate financial statements where the spouse controls a corporation;
• details of salaries, wages, management fees, dividends, or other benefits paid through a corporation;
• partnership income information;
• trust income information;
• employment insurance, workers’ compensation, disability, social assistance, pension, or other benefit information; and
• any other information necessary to determine income properly under the Guidelines.

This level of accurate financial detail is required because under Canadian law, child support obligations are directly tied to income.

What the Courts Can Do

If you have concerns about your Ex hiding income, you can turn to the Ontario court to help uncover the truth.  The courts recognize that spouses do not always report income accurately, and the law allows them to look beyond the numbers that might appear on a tax return.

There are several specific things the court is empowered to do, if your Ex is not complying with their obligations to disclose:

• Imputing income. The court can also look at whatever evidence is available, and can assign an income level that it believes will more accurately reflect your under-reporting Ex’s true earning capacity, or their actual financial circumstances.

For example, if your Ex reports a modest income while continuing to take expensive vacations, purchase luxury items, or operate a thriving business, the court may conclude that the reported income does not tell the full story. Similarly, if your Ex refuses to provide proper financial disclosure, the court may draw negative conclusions from that refusal and impute income accordingly.

• Third party disclosure. If your Ex refuses to cooperate by being forthcoming with financial information, the court can get it from other sources: It can order additional financial disclosure from outside parties – such as employers, banks, accountants, or businesses.
• Contempt of court finding. This again is tied to various types of support or orders, but for example section 25(7) of the Divorce Act allows a court to declare your Ex to be in contempt of court if they fail to comply with the disclosure obligations in connection with determining support.  A finding of contempt is a serious matter, and can result in the court imposing one of several sanctions on your Ex – including jail time in extreme cases.
• Ordering arrears. Courts can also make after-the-fact adjustments, where necessary.  For example, if you have already gone through the legal process with your Ex (with child support entitlements and levels being determined) and it later becomes clear that he or she understated income for several years, the court can step in.  It can order retroactive child support to compensate for amounts that should have been paid earlier.  Depending on the circumstances, those retroactive obligations can become substantial.
• The court may also order costs against your Ex if they fail to comply with disclosure obligations. In more serious situations, the court can reopen prior agreements or court orders that were based on misleading or incomplete financial information.

Gather Your Evidence

Although these remedies are available in some cases, courts require evidence before they can resort to them. If you suspect your Ex is hiding income, it is important to gather everything that might be pertinent.

This will typically start with financial records, bank statements, business documents.  But there can be other less-common sources as well, for example social media posts that show spending patterns.

Also, it’s important to note that courts won’t be persuaded by mere suspicion or conjecture; you need concrete evidence.  A good example of this principle is the recent case of Irvine v. Irvine, 2026 ONSC 2321, the wife challenged the husband’s claim that he earned only $124,000 per year, as part of an uncontested trial.  She asked the judge to impute to him an income of $300,000 for the purposes of calculating spousal support, based on a single T4 form that he provided, and based on his lifestyle and other evidence. (The husband had not provided full financial disclosure as legally required).

The judge noted that on an uncontested trial he was not compelled to accept the wife’s evidence at face value, but rather was required to probe it to ensure a fair outcome.  Here, the only evidence currently before the judge was what the wife had provided; she had not bothered to include the husband’s incomplete financial statement, notices of assessment, or T4 form as part of her request.

The judge concluded that the husband’s income “cannot be arbitrarily imputed”, and that the wife had simply not provided sufficient evidence to explain why the husband should have $300,000 in annual income imputed to him. (The wife was, however, granted permission to file addition evidence on point, if she wished).

Finally: Get Good Advice

Ontario courts take disclosure obligations very seriously.  Courts have repeatedly emphasized that full and honest financial disclosure is the foundation of the Family law system. Without it, the task of determining fair support or property outcomes becomes difficult, if not impossible.

More directly, it’s important that you do not rush into any sort of final settlement without obtaining proper financial disclosure from your Ex, first. Agreements reached without accurate financial information can later become costly to challenge.

If you are facing concerns about your Ex hiding income during your separation or divorce, get legal advice early.   Considering giving our offices a call; we can help ensure the needed financial information is properly disclosed, and that your support obligations are based on the truth.