Child support payments are based on several different factors, but are primarily based upon each parent’s income. When a parent stops working completely or undergoes drastic employment changes that alter their income, they may petition to modify their child support payments to reflect their new income. However, the other parent has the option to dispute the modification. We can offer advice and assistance on these issues at Kahn, Dees, Donovan and Kahn, LLP.
If a Court finds that a parent is voluntarily underemployed or unemployed, the Court can “impute” income to that parent. “Imputed income” is simply a legal method of determining what income the parent could be making and applying it to the child support calculation, instead of using the actual amount that parent is earning. The purpose of this rule is to ensure that parents are providing sufficient and fair financial support for their children. The Indiana Child Support Guidelines provide some guidance on when a Court may impute income, but judges have discretion to decide based on each case’s unique circumstances.
Let’s say one parent is the CEO of a highly successful technology firm, probably making millions of dollars per year, and decides to quit their job to work as an amusement park attendant. In this scenario, courts may impute income to the individual based on their employment potential, intent to evade child support payments and other factors. However, these situations are not always clear-cut.
A recent Indiana Court of Appeals case, Miller v. Miller, addressed this issue. In that case, the father left his full-time job to become a part-time student while working only 15 hours per week. He petitioned the court to recalculate his child support payment according to his drastically reduced income. The mother argued that the court should impute income to the father, taking into account what he was capable of earning, because he was not fulfilling his employment potential. However, the father argued that he should not be imputed income because he did not leave his job with the intent to reduce his support payments. The Court disagreed with the father, and held that the imputed income rule did not require purposeful intent to reduce or evade child support. The Court in Miller v. Miller affirmed that the father was “voluntarily underemployed” and that the trial court had properly imputed income to him¹. Because there was evidence of his employment potential, the mother did not have to prove purposeful evasion of child support.
In Miller, the Court stated that trial courts should analyze the following factors when determining whether a parent should be imputed income:
- The parent’s work history,
- Occupational qualifications,
- Reason for the change in employment,
- Prevailing job opportunities, and
- Earnings levels in the community.
While deliberate reduction or evasion of child support payments is a factor that may affect a Court’s decision, it is not required to trigger the imputed income rule. Because imputed income is based on each case’s unique circumstances, it is important to have legal counsel to provide guidance and effectively advocate for your rights.
For more information about this or any matter related to child support payments and family law, please contact KDDK attorney Mallory Deckard at mdeckard@KDDK.com or (812) 423-3183, or contact any member of the KDDK Family Law team.
About the Author
Mallory Deckard represents individuals, businesses and other clients with consistency and confidence. An even-keeled litigator and proactive counselor, she primarily practices insurance, personal injury, medical malpractice, family, creditors’ rights and bankruptcy, and debt collection law. A native of Avon, Indiana, Mallory practiced personal injury law and medical malpractice law at firms in Indianapolis and Evansville before joining the KDDK team.
(Matthew Rust, a law clerk for KDDK, contributed to this article.)
¹ Miller v. Miller, Court of Appeals Case No. 49A02-1604-DR-817 (Ind. App. Mar. 27, 2017)