When calculating child support, the court needs to make a number of determinations regarding the income level of each parent. In some cases, the income levels of one or both parents may change, such as when one of the parents is unemployed. However, in some cases, one parent may simply report lower income in order to avoid making child support payments.
In order to address such conduct, courts may employ child support calculation method known as “Imputed Income.” This is where the court assigns or credits income to a parent who has reported no or little income. Basically, the court determines the amount that the parent could have earned by working a minimum wage job. This amount is then included in the child support amount calculations and must be paid by the parent whom the income is imputed to.
When Is Imputed Income Applied?
Imputed income is usually applied where the parent has voluntarily become unemployed or underemployed (that is, they could be working, but have chosen not to). While this may seem unfair to some, imputed income is standard practice, as courts usually follow the “child’s best interest” standard when calculating child support. This means that the amount is calculated according to the child’s needs, and not the desires of either parent.
What Factors Go Into an Imputed Income Decision?
When making an imputed income assessment, the court will usually analyze several factors surrounding the paying parent’s circumstances, which may include:
- The paying parent’s educational level
- Their past earning history
- History of past employment
- Current opportunities for employment in the area
Also, courts will usually look for clues that the parent has hidden income. For example, courts will typically notice when the parent has expenses that exceed their usual income.
Reason and Intent for the Unemployment or Underemployment
Before imputing income, a court will want to know why the parent does not have a job or is earning less than what the parent could be earning. The court may hold a hearing and obtain evidence and determine whether the parent has provided a good reason why they are unemployed or receiving low income. The court will consider evidence such as:
- the parent lost their job because of a company downsize
- business of parent went out of business
- the parent's job relies on commission which they did not receive because of the economy
- the parent was terminated and has not been able to find a job even though they have tried
The courts will determine whether the parent has been trying to increase their income to be able to pay. The court will also look at the assets that the parent has which could pay for the child support.
When Is Income Not Imputed?
Courts understand that each parent’s circumstances may change and that sometimes a parent may be legitimately unable to pay child support. In such cases, income is not imputed to that parent, which may lead to an overall lower monthly child support amount.
Some circumstances where imputed income is not applied may include:
- The parent has lost their job and is making good faith attempts to find a new one.
- Some states don’t impute income to a parent who is a “nurturing parent”- that is, staying at home with young children to care for them.
- Income sometimes isn’t imputed to a parent who is undergoing higher education. However, once they complete their degree, they may actually have a higher income imputed to them due to their increase in earning power with the degree.
If the parent wants to challenge an imputed income determination, they will usually have to supply proof of their circumstances. For example, if they are currently looking for a job, they may have to prove that they are registered with a job search agency and have submitted resumes, undergone interviews, etc.
What If the Other Parent Is Intentionally Not Making Efforts to Find Employment?
If you are the other parent who is owed child support and the other parent is not trying to find employment and has no good reason for it, ask for copies of any documents that show proof. Some documents that may show bad faith and may lead the court to impute income include:
- documents that show the parent has not consistently looked for employment
- documents to show parent voluntarily and intentionally quit their high paying job
- parent turns down promotion, employment, or bonuses
- parent delays the receipt of bonus
- proof that the parent has the ability to work and earn more than they are currently earning
- evidence of witness statements or other types of evidence that shows they are avoiding anything to pay child support payments (email, Facebook posts, letters)
Do I Need a Lawyer for Advice on Imputed Income in a Child Support Order?
Child support orders are very important for the well-being and upbringing of the child or children. State laws may vary on child support factors such as imputed income. If you need assistance with imputed income rules, you may wish to contact a family lawyer for advice. Your family law attorney can help you with any documents and forms, and can represent you in a court of law if you need to attend a hearing.