A child support order is an official court document where the court specifies how much and how often a parent must support their child. This document is legally enforceable, meaning if it is transgressed, there are legal consequences.
Imputed income is income credited to a parent even though that parent is not earning that amount. The judges impute income to ensure that the child’s needs are met and deter parents from diminishing their responsibilities.
For example, suppose parent A has earned $80,000 a year in a stable, full-time job but suddenly appears at a child support hearing claiming poverty. In that case, the judge will want to inquire about the drastic change in the income, particularly if that parent is paying the child support payments. Additionally, parent B will have an opportunity to show the judge that parent A is acting in bad faith.
After further review and evaluation, if the judge decides that there is no valid excuse for lower child support payment, the court may impute income to parent A. If parent B can demonstrate that parent A willingly quit work, this would not be a valid reason for the court. For example, some states will examine three factors when deciding whether to impute income to a parent.
The factors include:
- Ability to work;
- Opportunity to work and;
- Willingness to work;
Therefore, typically the most determining factor in deciding imputing income is the reason for unemployment or underemployment. For example, some parents suffer a fair job loss and may not have income imputed immediately. The judges thoroughly examine each case and look at the situations surrounding that family to make a decision that best serves the child’s interests.
When Is Imputed Income Applied?
The courts acknowledge that child support may be a weighty burden for some parents trying to support and manage two households. But parents still cannot evade their financial obligation to pay child support just because of financial hardships. There must be a showing for the case that any decline in their income was utterly involuntary.
Some parents may intentionally reduce their income to try and limit or terminate their child support payments. However, courts have created options such as imputing income for child support to deal with these inconsistent parents and assure that children can receive financial aid for food, shelter, and clothing.
When a parent’s current earnings do not reflect the actual income or earning capacity, a judge will review the other factors to figure out an appropriate amount of potential revenue, including a parent’s:
- Historical earnings from the past five years;
- Education or vocational training;
- Employment history;
- Available employment opportunities in the community and;
- Reasons for leaving a previous job.
A judge will evaluate all the evidence and testimony based upon the request made by either parent to impute income to the other. Per the stated factors, a court will assign each parent an income based on what the parent could be earning. This only applies to parents who have been out of the workforce for a while and may have a full-time minimum wage income imputed to them.
Generally, when courts decide how much income to impute, they will need to determine the parent’s “earning capacity.” This means the individual income potential, which is composed of the parent’s ability to work, willingness, and opportunity to work.
The ability to work is usually determined by examining the parent’s educational level, work skills, and employment history. Willingness to work is defined by seeing the parent’s behavior and asking questions like, are they actively looking for jobs, sending out resumes, or attending any interviews. Opportunity to work involves considering the availability of appropriate job opportunities in the local area and determining if there are companies in the parent’s field hiring or is there an employment slump.
If the parent has the ability and opportunity to work, a court can determine how much to impute by reviewing evidence from examining the factors mentioned above. The court would also think about the salaries for a job that a parent would qualify for. Additionally, the court may even use the parent’s most recent salary and impute that amount. Sometimes, if it is challenging to calculate how much that parent could make, the court will impute minimum wage. The exact amount imputed will vary and depend on the specific circumstances of each case of imputing income for child support.
Another note about how to locate any hidden assets. If the parent is hiding their earnings, this will make it challenging for the court to assess imputing income for child support. You may want to reach out to a lawyer and consider any legal options for subpoenaing the spouse’s bank records, paystubs, or business records to uncover potential hidden assets. Child support can be based on these hidden assets and their earnings.
What Factors Go into an Imputed Income Decision?
The amount of child support ordered to be paid is generally calculated based on a formula. That imputed income calculation formula usually takes into consideration numerous factors.
Each state’s formula for imputed income calculation is different, but generally, they include factors such as the parent’s income being ordered to pay child support. If you want to know the exact formula for imputed income calculation and how much child support you may owe, then you need to contact a local attorney for the best answer.
The imputed income calculation formula will also include the number of children, the amount of time the child spends with the parent being ordered to pay support, any ongoing monthly medical expenses, or other special needs the child has.
For example, a parent who is ordered to pay support for a child with significant special needs requiring around-the-clock medical supervision will likely have a much higher child support payment than a parent who is ordered to pay support for a child without significant special needs.
It is also important to note that child support obligations may never be discharged or stopped unless declared by court order. This means that if financial circumstances change for the party paying child support, that party must request a modification of the order by the court. The party cannot file bankruptcy or try to be rid of their child support obligation through any other means.
How Does the Court Impute Income?
A judge will impute or assign additional income to a parent when it’s clear that the parent can and should be earning more. When a judge imputes income, the judge will calculate child support based on a higher income than the parent is earning.
The courts recognize that child support may be a heavy burden for some parents trying to maintain and manage two households. But parents still cannot avoid their financial obligation to pay child support just because of financial difficulties. There must be a showing for the case that any reduction in their income was utterly involuntary.
When Is Income Not Imputed?
Sometimes, courts do not impute income even when the other parent is unemployed. If the parent is making a good faith effort to find a job or enroll in higher education classes, judges may not impute income. In some states, judges won’t impute income if that parent has always been the “stay-at-home” parent, meaning judges won’t expect the parent to suddenly become employed because of the divorce.
Imputed income can be a complicated and lucrative topic in any divorce proceeding. If you are contemplating divorce, and are concerned about child support, speaking with a child support attorney about imputed income, among other topics, can prove to be a great investment in your new future.
If the parent is hiding their earnings, this will make it challenging for the court to locate any hidden assets to assess the imputed income. You may want to reach out to a lawyer and consider any legal options for subpoenaing the spouse’s bank records, paystubs, or business records to uncover potential hidden assets. Child support can be based on these hidden assets and their earnings.
What If the Other Parent Is Intentionally Not Making Efforts to Find Employment?
The issue here is whether unemployment or underemployment is voluntary or involuntary. If it is voluntary, the court will impute income to that parent up to the amount they believe is in line with their true earning capacity. To determine if the unemployment status is voluntary or involuntary, the court will look at the ability, opportunity, and willingness to work.
Ability is determined by education level, work skills, and employment history. Opportunity is determined by available local job opportunities in their field. Willingness is determined by examining the parent’s history of searching and applying for jobs and attending interviews.
Often, expert witnesses are brought in to determine ability, opportunity, and willingness. Imputed income is always decided on a case-by-case basis, and when earning capacity seems ambiguous, the minimum wage is used.
Do I Need a Lawyer for Advice on Imputed Income in a Child Support Order?
Child support is a legal obligation of the parents. Therefore, if the parents fail to complete this legal duty for some reason, the courts will step in by imputing income to ensure the child is met with the essential needs.
If you are struggling to make payments or if you think your child needs a modification in the child support order, you may reach out to a local child support lawyer to discuss your legal options in this situation. Depending on which state you reside in, the guidelines will vary case by case.