Imputed Income

Monday, August 10, 2015
The concept behind imputing income is to require those who are able to do so, to support or contribute to the support of those for whom they are responsible. During a divorce or post dissolution matter, each party’s income may become an issue. Often, one party will claim the other is intentionally not reaching their full earning capability or is receiving compensation from their employer in other forms so as to lower their adjusted gross income; all in an effort to avoid paying a certain amount of child support, alimony or attorney’s fees. This argument, along with the properly presented facts and evidence, may result in the imputation of income to one party by the court.
However, imputing income is a complicated two-step analysis.

The first step of the analysis is whether or not the court finds the party to be voluntarily unemployed or underemployed, absent a finding by the court of physical or mental incapacity or other circumstances over which the party has no control. Such circumstances may include a party quitting their job, taking a reduction in pay, working less hours or not seeking employment for which they qualify. All of these actions must be found to be voluntary by the Court. Moreover, the Court should take into consideration the parties’ time-sharing schedule with the minor child(ren) because first and foremost the Court is always most concerned with what is in the best interest of the minor child(ren). Therefore, if the Court finds such actions were done in the best interest of the minor child(ren) of the parties, then income should not be imputed.
If the court finds that burden has been met and such voluntary unemployment or underemployment exists, then the Court must determine the employment potential and probable earnings level of the party, based upon that party’s (1) recent work history; (2) occupational qualifications; and (3) prevailing earnings level in the community. Traditionally the court has required particularized findings in all three categories and reliance upon one, such as past work history, is insufficient to support imputation of income.
Accordingly, to prevail in the assertion that additional income should be imputed to the other party, one must call witnesses and put documentary exhibits into evidence showing factually what jobs the other party is qualified to perform, what the prevailing rates of pay for such employment is in the surrounding community, and that such job openings actually currently exist. Such proof may require court ordered testing of the alleged unemployed/underemployed party, and to win, the testimony of a vocational rehabilitation expert. In other words, it is one thing to say “My spouse could work” or “My spouse could earn more money”. It is another to undertake the time and expense of proving that assertion and precisely how much more money, with exactness, that a court can artificially “impute” to the other side, in order to increase or decrease the amount of child support, alimony, or attorney’s fees to be awarded.
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Mark Lang & Associates 8/10/2015

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