Child support is not a means of punishment for parents, but the state’s system for ensuring that children receive the financial support needed to cover basic needs. Whether parents are emotionally involved in their children’s lives or not, both parents have an ongoing duty to provide financial support.
Child support follows the child, and any attempt by a parent to hide or decrease their income as a way to avoid paying support will ultimately hurt the child. In order to deal with these voluntary unemployment and underemployment situations, Indiana courts can "impute" or attribute income to a parent.
This article provides a general overview of how and when courts impute income for child support purposes in Indiana. If you have questions about imputing income, you should contact a local family law attorney for advice.
The amount of child support ordered in a case is heavily dependent upon the reported incomes of the child’s parents. Indiana courts also consider the financial resources of the parents, standard of living, and the child’s physical and educational needs when determining child support. See Child Support in Indiana to learn more. In certain child support cases, where a court determines that a parent is choosing not to work or is capable of earning more than their current salary, the court can increase child support by imputing income to a parent.
Imputing income means that a court assigns additional income to a parent. Indiana courts impute income in circumstances where a parent is purposefully earning less to avoid paying child support. When a court imputes income, it will use a higher salary number than what the parent is actually earning for purposes of calculating child support. Income can be imputed in cases where a parent’s salary is underreported or the court has determined that a parent made a conscious and purposeful decision to earn less by being voluntary unemployed or underemployed.
Voluntary unemployment happens when a parent is capable of working but simply chooses not to. This can be a situation where a parent quits a well-paying job, is purposefully fired from their job, or refuses to seek new employment after losing their job.
Alternatively, underemployment means a parent could be in a higher-paying job, but has chosen to pursue employment well below their educational level or income potential. An underemployed parent could be earning more, but chooses not to. Factors a court may consider before imputing income to an underemployed parent include:
Courts can review previous employment records, pay stubs, previous tax returns for no more than 5 years, and the Department of Labor Statistics for earnings for similar occupations in the same community to determine what a parent should be earning. However, a court cannot impute income to a parent at a higher salary level than what the parent previously earned. You can read more about the law on imputing income for purposes of child support in Indiana in the Indiana Rules of Court: Child Support Rules and Guidelines.
The parent that seeks to impute income bears the burden to prove that an unemployment or underemployment situation exists. If one parents does not provide income information or no previous income information is available, the court may impute income based upon a full-time (40 hours per week) minimum wage job.
The Indiana Court System maintains an instructive website to help those who want to file a child support modification action on their own. Go to www.in.gov.
If you have other questions about imputing income for purposes of child support in Indiana, contact an experienced family law attorney for assistance.