Imputing Income for Child Support in California
Learn more about the process of imputing income in California and how it impacts child support.
In California, both parents are legally responsible for the financial support of their children, whether they're married to one another or not. Parents’ incomes are a key factor in figuring out how much support is owed. Unfortunately, some parents intentionally reduce their income in order to avoid their duty of support - they may do this by cutting back work hours or refusing to work altogether.
Parents that reduce income to lower child support payments may believe they're punishing the other parent or gaming the system. However, in reality, these parents are actually punishing their own children as their financial needs go unmet.
This article will explain why and how courts will attribute or “impute” income to parents that are trying to avoid child support. If you still have questions after reading this article, you should contact an experienced family law attorney for advice.
Overview of Child Support Orders
In California, parents must pay child support until their children turn 18, or until they turn 19 if they are still in high school, living at home and can't support themselves. Parents may agree on the amount of child support. However, courts can't enforce a child support agreement until the case is brought before a judge. A child support case can be brought to court by a parent or by the California Department of Child Support Services on behalf of the child (or children).
If parents can't come to an agreement on support, either parent may ask a court to set the amount.
Typically, child support is paid to the parent who cares for the children most of the time (the “custodial parent”). This is because the law assumes that the custodial parent already spends money directly on the child. The parent with less parenting time (called the "non-custodial parent") usually makes the payments. See the article Child Support in California for more information. California calculates child support using a guidelines calculator. The calculator will assess many factors including the number of children, both parents’ incomes and certain child-related expenses
What is Imputed Income?
It's never a good idea to try and avoid paying child support by artificially reducing your income. When this happens, a judge may "impute" income. Imputed income is income that is attributed or credited to a parent even though the parent is not actually earning that amount. Judges impute income to ensure that children’s needs are met and to deter parents from shirking their responsibilities.
For example, if Parent A has been earning $75,000 a year in a stable, full-time job and suddenly appears at a child support hearing claiming poverty, the judge is going to want to know more about the sudden drop in income. Parent B will have an opportunity to show that the judge that Parent A is acting in bad faith.
If Parent B can show that Parent A voluntarily quit work in order to spend more time traveling, the judge is not likely to accept that as a valid reason to lower child support. Instead, the court may impute income to Parent A. In this example, the court would most likely use the amount Parent A was most recently making -- $75,000 -- and child support owed would be based on that amount.
California courts will look at three factors when determining whether to impute income to a parent. The factors are:
- ability to work
- opportunity to work, and
- willingness to work.
In other words, the reason for the unemployment or underemployment is key to determining whether to impute income. For example, parents that have suffered a legitimate job loss will not necessarily have income imputed to them right away. So, it's important for a judge to understand why a parent's income has decreased.
Involuntary Unemployment, Voluntary Unemployment and Underemployment
Involuntary unemployment happens when a parent loses a job for a legitimate reason and is unable to find work despite reasonable efforts. When this happens, the unemployed parent will be required to show the court the job loss was involuntary. The parent must also be prepared to show diligent efforts to find another job and inability to find a job due to lack of opportunities.
A parent will also be considered involuntarily unemployed if he or she is suffering from physical or mental disabilities that limit his or her ability to work. If a parent truly has no ability and/or opportunity to work, the court won't impute income to that parent.
Voluntary unemployment is when a parent is able to work and has an opportunity to work, but chooses not to work. Some examples of voluntary unemployment include:
- losing a job due to misconduct or illegal activity
- voluntary early retirement
- quitting work to return to school, and
- voluntary termination (quitting).
Voluntary underemployment happens when a parent makes less than diligent efforts to find employment at a level equal to or better than income formerly received. The court will look at recent work history and employment qualifications to decide if a parent is working below full capacity. Some examples of voluntary underemployment include voluntarily cutting back on work hours and refusing to reasonably use or invest his or her assets.
A parent making a career change may also be found to be voluntarily underemployed. In the case of a career change, the court will consider the extent to which the children will ultimately benefit from the career change to determine if the parent is voluntarily underemployed.
When a parent is unemployed or working below full capacity, the court will consider the reasons for the unemployment or underemployment. If the court finds the parent is unwilling to work or be fully employed, the court will impute (or attribute) income to the parent as long as it is consistent with the best interests of the children who are subject to the child support award.
Income may also be imputed when a parent drops from full-time employment to part-time employment to pursue additional education (or some other interest such as a hobby, volunteer work or travel). Also, if parent resigns from a job to start his or her own business, income may be imputed to that parent.
How do Courts Determine How Much Income to Impute?
When courts are deciding how much income to impute, they will need to determine the parent's "earning capacity," which means his or her income potential. This is composed of the parent's ability to work, willingness and opportunity to work.
The ability to work is generally determined by looking at a parent's educational level, work skills and employment history. Willingness to work is determined by looking at the parent's behavior: Is he or she searching for jobs, sending out resumes, or going to interviews? Opportunity to work takes into account the availability of appropriate jobs opportunities in the local area: 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 (usually submitted by the parent seeking child support and sometimes in the form of an vocational expert's report or testimony) regarding salaries for a job that parent would qualify for. A court may even use the most recent salary the parent was earning and impute that amount. Sometimes, if it's too difficult to determine how much that parent could make, the court will impute minimum wage. The exact amount imputed will depend on the specific facts and circumstances of each case.
For the full text of the laws governing child support obligations and determinations in California, you can refer to the following statutes:
California Family Code, Sections 3900-3902 - Duty of Parent to Support Child
California Family Code, Sections 4000-4014 - Court-Ordered Child Support, General Provisions
California Family Code, Sections 4050-4076 - Statewide Uniform Guideline