Child Support

Child support will depend largely on the two parties’ respective annual gross incomes, because part of the goal of child support is to have the kids be able to enjoy both parents’ lifestyles.

What does “income” mean in the context of child support?

Under the Family Code, it means “income from whatever source derived.” That means wages or salaries, but also commissions, royalties, and bonuses; rental income; money received from dividends, pensions, interest, trust income, and annuities; workers’ comp, unemployment insurance benefits, disability insurance benefits, and Social Security benefits; and even spousal support actually received from another ex-spouse.

I own my own business, but I don’t pay myself a salary and I’m not on my company’s payroll. What will the court say is my “income”?

In this instance, the Court will look at the business’ gross receipts and will then deduct “expenditures required for the operation of the business.” Note that just because something is a tax writeoff per the IRS, that doesn’t mean the Family Court is going to say it’s not income. The judge has the discretion to look at employment (or self-employment) benefits and may count those benefits as income – especially if they create a “corresponding reduction in living expenses.” For example, if your employer provides you with a cell phone and lets you use it for personal use, and the cost of the plan is $100 a month, the other side might ask the Court to add $100 to your monthly income because you don’t have to pay a wireless bill.

What if someone is unemployed when they could be working? Or what if someone earns less than they could be earning?

This is another situation where the court has discretion to make some changes. A judge can consider a parent’s earning capacity instead of the parent’s actual income.

• Example: Dividend Dave quits his high-paying job and says, “Now I don’t have to pay child support.” The judge might say, “But you weren’t laid off – you quit that job. You could still be there, earning that big paycheck. I believe you still have the capacity to earn what you used to, and I am going to set child support based on your earning capacity. So now you have the same obligation, and less money to pay it with.”
• Example: Mandy Mom has always been a stay-at-home mother. She and her husband have been living separately for some time now, and he is asking that income be imputed to her. The judge could say, “The kids are in school and you could be working at least part-time without harm to them. You have a legal obligation to support them, too. I am going to calculate child support as if you earn minimum wage for 30 hours each week.”

Does need-based public assistance (welfare) count as income?

No. Annual gross income does not include any income derived from any public assistance program, eligibility for which is based on a determination of need.

What proof of income do people need to provide?

Both parents will need to complete, exchange, and file an “Income & Expense Declaration” which will include pay stubs (or Profit and Loss Statements for self-employed persons). Parties also have to show each other their most recent tax returns. 

What are some other things the Court can take into consideration when setting child support?

• You get a break if you pay for health insurance. If you’re the payor, you’ll pay less; if you’re the recipient, you’ll get more.
• You get ‘dinged’ if you pay mortgage insurance or property taxes. The reason is that these payments make you eligible for tax writeoffs or refunds. The way the statute is written, having more money available to you on an annual basis (at tax time) means you are able to pay more, or that you don’t have as great a need.
• Similarly, you’ll pay more (or get less) if you have more dependents on your taxes. It’s worth running your taxes both ways – with a deduction for your child, and without – to see what the actual difference is. If claiming the child on your taxes will make your monthly support received go down by $800, ask your tax professional whether you will get more than $9,600 when you file your returns.
• You get a break if you have to pay mandatory union dues or make mandatory contributions to a retirement plan like CalPERS or SCERA. The Court recognizes that this money is not available for support, and it’s not because you are hiding it. So the support amount is adjusted.  However, this is expressly not true if you regularly put money into a Roth IRA.

Remember that under the law, child support comes first. Your rent, groceries, car payments and everything else come after you’ve fulfilled your obligation to support your children.

The assumption is that having the children in your care costs money. This assumption applies whether you have the children from 3pm to 8pm (when you spend money on groceries to feed them dinner) or from 9pm to 7am (when they’re sleeping and presumably not costing you anything).

So the more time the children are with the paying parent, the less he or she will pay. And the more they’re with the supported parent, the more child support he or she will probably get.

Again, this is just a rule of thumb, and the guideline formula will apply. Also, if one parent has very little time with the children, or if one parent has a very low income, then slight changes to the schedule won’t have much effect.

Whether you want to change an existing child support order or need to ask for child support for the first time, the good news is that the process is relatively quick and easy. Unlike a motion to get or change child-custody or visitation orders, a child support hearing doesn’t require mediation first — you could be in and out of court in about a month from the day a motion is filed.  

Check out our service levels to see whether you just need help with forms, need an advocate on the day of your hearing, or want someone to handle all aspects of your case. Then contact us for a consultation!