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What Income Do Courts Consider When Determining Child Support?

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In California, both parents are legally obligated to support their children financially. When parents are together, they typically share child-raising expenses. Each parent is still responsible for providing support, even if divorced or separated. If they cannot agree on how much one parent should pay the other, the court will decide. Several factors are considered when determining child support, including both parents’ incomes. Specifically, a judge will look at each parent's net disposable monthly income, which is their gross income minus certain deductions divided by 12.

At Claery & Hammond, LLP, our Los Angeles lawyers work to protect the best interests of our clients and their families. Schedule a consultation with us by calling (310) 817-6904 or submitting an online contact form today.

What Is Considered Income?

California courts follow a guideline for calculating child support amounts.

Various factors are used to compute child support, including the following:

  • Both parent’s incomes,
  • The higher earner’s net monthly disposable income,
  • The percentage of time the higher earner has with the children, and
  • The total net monthly disposable income of both parents.

Income includes various sources of a person’s earnings.

Under California Family Code § 4058, income can be derived from the following:

  • Commissions
  • Salaries
  • Royalties
  • Wages
  • Bonuses
  • Rents
  • Dividends
  • Pensions
  • Interest
  • Trust income
  • Annuities
  • Workers’ compensation benefits
  • Unemployment benefits
  • Disability benefits
  • Social security benefits
  • Spousal support from another party
  • Income from business ownership
  • Overtime
  • Military allowances

Being unemployed or underemployed does not necessarily excuse a parent from making child support payments or not allow the receiving parent to get more. If one parent has no or low income, the court will look at the individual’s earning capacity, provided that doing so is in the best interest of the children.

Under section 4058, the following are some of the background factors a court may consider when determining a parent’s earning capacity:

  • Assets
  • Residence
  • Employment and earnings history
  • Job skills
  • Education
  • Literacy
  • Age
  • Health
  • Criminal record
  • Job market
  • Average earning levels in the community

Is Gross or Net Income Used to Determine Child Support?

As noted above, the child support formula accounts for net disposable income. The figure is calculated by identifying the parent’s annual gross income and subtracting certain deductions.

Deductions can be made for the following:

  • State and federal income tax liability
  • Contributions according to the Federal Insurance Contributions Act
  • Union dues
  • Retirement benefits
  • Health insurance premiums
  • Child or spousal support payments to another party
  • Job-related expenses
  • Hardship

The resulting amount is then divided by 12 to get the monthly net disposable income.

Does Child Support Change If Income Changes?

If a parent’s financial situation changes (for instance, they get a promotion/raise or lose their job), child support amounts do not automatically update. The payor is obligated to make the payment amounts included in the current order. This is important to note for parents who may earn less than they did when the court ordered them to pay child support.

A parent cannot decide on their own that they are going to decrease the amount they pay or stop payments altogether. Doing so is willful disobedience of a court order. The non-complying party may face various consequences, including being found in contempt of court, punishable by jail time.

When a parent’s income changes – whether it increases or decreases – either party may submit a request to the court to have the child support amount modified. Until the court makes a decision, the paying parent must continue payments as ordered.

Reach Out to a Lawyer About Your Case

A fair child support amount is important for ensuring that children get the care they need and one parent is not overburdened financially. Both parents must be honest when reporting income to ensure that the award is accurate.

Because of all the paperwork, research, and calculations involved in a child support matter, these cases can get complicated. If you are seeking or may be ordered to pay support, speak to a family law attorney. They can help you understand what must be reported and assist in gathering and organizing the appropriate documents.

Our team guides our Los Angeles clients through complex legal matters. To learn more about how Claery & Hammond, LLP may able to help you, call us at (310) 817-6904 or contact us online today.

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