Given that earnings are the most significant factor of consideration when a court awards child support, many parties find themselves tempted to intentionally earn below their potential in an attempt to either reduce their obligation to the other parent, or to increase the other parent’s child support obligation to them. Aside from the fact that this always results in a loss of net earnings to the willfully under-employed parent, the California legislature and courts have already identified and neutralized the parent’s ability to even get a favorable court order by this strategy. As explained below, the court may “impute income” for child support purposes to the parent who is intentionally earning below their income potential.
THE LEGISLATURE AND COURTS HAVE EXPLICITLY FAVORED IMPUTATION OF INCOME FOR CHILD SUPPORT PURPOSES WHEN A PARENT LACKS THE WILLINGNESS TO EARN AT CAPACITY, BUT HAS THE ABILITY AND OPPORTUNITY TO DO SO
California has a strong public policy in favor of adequate child support. See, e.g., County of Kern v. Castle (1999) 75 Cal. App. 4th 1442, 1455; Stewart v. Gomez(1996) 47 Cal. App. 4th 1748, 1754. That policy is expressed in statutes embodying the statewide uniform child support guideline. See Fam. Code §§ 4050-4076. “The guideline seeks to place the interests of children as the state’s top priority.” Fam. Code § 4053, subd. (e). In setting guideline support, the courts are required to adhere to certain principles, including these: “A parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life.” Fam. Code § 4053, subd. (a) (emphasis added). “Each parent should pay for the support of the children according to his or her ability.” Fam. Code § 4053, subd. (d). “Children should share in the standard of living of both parents. Child support may therefore appropriately improve the standard of living of the custodial household to improve the lives of the children.” Fam. Code § 4053, subd. (f).
For guideline child support calculation purposes, the California Family Code explicitly grants trial courts discretion to impute earning capacity income to a parent in lieu of that parent’s actual income. “The Court may, in its discretion, consider the earning capacity of a parent in lieu of the parent’s income, consistent with the best interests of the children.” Fam. Code §4058.
“It has long been the rule in this state that a parent’s earning capacity may be considered in determining spousal and child support.” In re Marriage of Flaherty (1982) 31 Cal. 3d 637, 642. “[F]or purposes of determining support, ‘earning capacity’ represents the income the spouse is reasonably capable of earning based upon the spouse’s age, health, education, marketable skills, employment history, and the availability of employment opportunities.” In re Marriage of Simpson (1992) 4 Cal. 4th 225, 234. A trial court may consider earning capacity in determining spousal support, just as it may with child support. Marriage of Cheriton (2001) 92 Cal. App. 4th 269.
Subject to the child’s best interest, courts properly act within their discretion in imputing income from work to an under-employed parent where the parent: (a) has the ability to work (taking into account factors as age, occupation, skill, education, health, background, job experience, and qualifications), and has an opportunity to earn, but lacks the willingness to work consistent with his or her ability and opportunity. Marriage of Smith (2001) 90 Cal.App.4th 74, 81-82; Marriage of Regnery (1989) 214 Cal.App.3d 1367; Marriage of Eggers (2005) 131 Cal.App.4th 695, 699.
Even being out of the labor force is not a defense to imputation of income. In Re Marriage of Hinman (1997) 55 Cal.App.4th 988, examined a case where the Appellee mother held a bachelor’s degree and foreign degree in Computer Science, had “significant” employment experience in the computer field, and an earning potential of $35,000 – $50,000 per year. Hinman, at 993. However, Appellee had not worked in over four years and had three children under age three from a subsequent relationship for whom she cared exclusively. Id. Using relatively harsh language, the appellate court affirmed the trial court’s finding that income be imputed to Appellant based on her earning capacity: citing In Re Marriage of Padilla, 38 Cal. App.4th 1212 the court noted that “[o]nce persons become parents, their desires for self-realization, self-fulfillment, personal job satisfaction, and other commendable goals must be considered in context of their responsibilities to provide for their children’s reasonable needs. If they decide they wish to lead a simpler life, change professions or start a business, they may do so, but only when they satisfy their primary responsibility: providing for the adequate and reasonable needs of their children.” Padillaat 1220, fn. omitted. The court further opined that “a child support obligation ‘must be taken into account whenever an obligor wishes to pursue a different lifestyle or endeavor…. [C]hild … support [is] an overhead which must be paid first before any other expenses…. [A payor does] not have the right to divest himself [or herself] of his [or her] earning ability at the expense of … minor children.’” Hinman at 999, citing Padilla at 1218.
CONCLUSION
Explained simply: if the evidence shows that you are capable of earning more than you do, the court will order child support based on your potential earnings rather than your actual earnings. When a parent willfully fails to pursue the career for which she is educated, experienced, and trained, when that failure to pursue results in diminished earnings, it creates a hardship for not only for the other parent, but for their children together as well. The statutes, case law, and public policy agree that income may be imputed and should be imputed if the evidence shows a capacity to earn more.
