What is Imputed Income?

Both parents have a duty to support their children, whether or not they are married to one another.

In general, the parent who doesn’t have custody (or less custodial time) of the children will pay child support to the custodial parent. If both parents cannot agree on a proper amount of support or if one refuses to provide financial support, a court can determine the amount of child support according to California law.

While many parents do not have an issue with supporting their kids, sometimes, a parent will take a lower-paying job—or even stop working entirely—to intentionally reduce income and thereby lower his or her child support payments. However, the court may “impute” or attribute income to that parent in these cases.

In California, parents are not allowed to simply stop working or voluntarily take a lower-paying job in an attempt to pay less child support. When a court believes that a parent intentionally unemployed or earning less than what that parent could earn to financially support his or her kids, the court can refuse to use the parent’s actual income to calculate child support.

Several examples of situations where a court may impute income include:

  1. The parent deliberately stops working or reduces work hours
  2. The parent leaves a high-paying job to take a low-paying job or volunteer position
  3. The parent quits work to go back to school

So rather than accepting the parent’s claims of sudden poverty or inability to pay support in such cases, the court will determine the parent’s “earning capacity” or “earning potential.” The court will then use that figure in the child support calculations. The amount of income a court determines a parent is earning is known as the “imputed income.”

The following are common factors the court will consider when imputing income:

  1. The noncustodial parent’s previous income
  2. The noncustodial parent’s education and experience
  3. The efforts the noncustodial parent has taken to obtain employment
  4. Circumstances surrounding a job loss or change
  5. The noncustodial parent’s assets and property

On the other hand, the court won’t necessarily impute income to parents that have experienced an involuntary job loss, unemployment, or underemployment. Common examples including a legitimate job loss, such as being fired or laid off, or a physical or mental disability which prevents the parent from working or from working at full capacity.

If you have additional questions about imputed income, contact our Newport Beach family law attorney at Burch, Coulston & Shepard, LLP today.

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