What Do Unmarried, Separated or Divorced Parents Need to Know About Imputed Income?

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What Do Unmarried, Separated or Divorced Parents Need to Know About Imputed Income?

By Kristina J. Wenberg

All parents have a duty to support their children under Virginia law. Virginia courts must follow specific statutory guidelines to calculate child support in all child support cases, and the guideline calculation is presumed correct. However, courts may deviate from that guideline calculation by considering several statutory factors. One such factor permits courts to impute income to a parent who is voluntarily unemployed or voluntarily under-employed. A judge has broad discretion to impute income, but in some cases is required to impute income. When a court decides to impute income to a party, the court adds a dollar amount that it deems appropriate to a party’s actual gross income, and that sum will be used in the overall child support calculation.

To understand when imputation is mandatory, parents should first understand when unemployment or underemployment is voluntary. There are numerous factors on which each individual case may rest, but generally speaking, involuntary unemployment or involuntary under-employment would involve a situation in which a parent had no control over a reduction in employment income. For example, a parent could lose his job due to corporate downsizing, even though he was a stellar employee. However, involuntary unemployment could turn into voluntary unemployment or voluntary under-employment, depending on various circumstances, including but not limited to the length of the unemployment, that parent’s lack of effort to obtain new employment, or a refusal to accept a good employment offer. Voluntary unemployment or voluntary under-employment could also involve a party’s personal decision to change his employment position, employer, or profession when that decision results in reduced income.

When considering whether to deviate from the guideline child support calculation and impute income, if the basis for imputing income is a change in a party’s employment, courts are required by statute to consider the good faith and reasonableness of a party’s employment decision. In cases where a party presents evidence of good faith and reasonableness, imputation is discretionary. This, however, does not mean that courts cannot impute income if a parent shows he had good intentions. In addition to fifteen very specific statutory factors that must be considered for deviating from a guideline child support calculation, Virginia courts are also required to consider the over-arching standard of the best interests of the child or children, as well as each party’s ability to provide child support. Thus, in one case, for example, the Virginia Supreme Court upheld a trial court’s decision to impute income to a party who changed his employment for what he thought was going to be a promising new position. The new position, however, ultimately resulted in a reduced income. Under the facts of that case, the Court determined that the party took a risk that should not be borne by the children. On the other hand, in yet another example, the Virginia Court of Appeals recently upheld a trial court’s decision not to impute income to a parent who voluntarily changed her employment even though the change reduced her employment income. In that case, although the parent reduced her monetary income, in so doing, the Court found that she had also increased the time she spent caring for the children.

Imputation becomes mandatory where there is no evidence of good faith or reasonableness in a party’s voluntary decision that results in unemployment or under-employment. Thus, for example, the Court of Appeals recently held imputation was mandatory in one case because that party’s personal decision to commit a crime (which resulted in incarceration and loss of employment), could not be considered as a reasonable employment decision or one made in good faith. Even so, the courts are not obligated to deviate from the guideline child support calculation, even if imputation is mandatory.  The facts of any given case could be such that, despite a parent’s illegal conduct that resulted in a reduced income or no income (and hence mandatory imputation), imputation may not be in the children’s best interests.

Imputation of income is often considered in child support cases, whether in a request for a new order or in a request to modify an existing order. Requests to impute income to a party can be quite complex, particularly if expert testimony is necessary. Thus, if child support is an issue in your divorce case, or if you otherwise need a child support order or modification of an existing order, please call Compton & Duling at 703-583-6060 to set up a consultation. We will be happy to consider how we may help you meet your legal needs.

Disclaimers: This article is limited in scope and depth. We recommend retaining an attorney licensed in your jurisdiction because each particular family situation is unique. This article is not intended to create an attorney-client relationship with the reader. Further, this article is not intended to provide tax or financial planning advice.