Imputation of Income When Parent or Spouse is Intentionally Unemployed or Underemployed

with Lianne B. Eklove

Imputation of Income when Unemployed or Underemployed Transcript

Hello, I am Lianne Eklove of the Feldstein Family Law Group.

Today I am going to discuss the imputation of income where a parent or spouse is intentionally unemployed or underemployed.

A Recent example of a case that could give rise to the imputation of income is that of Charlie Sheen. Recently Charlie Sheen has been in the news on virtually a daily basis. First as a result of his substance abuse problems, his rants in the media many of which were directed at his employers and then his public firing from his job on his successful television show, Two and a Half Men.

Charlie Sheen has four young children with two ex-wives, and presumably very onerous child and spousal support obligations.

There are likely agreements and/or court orders in place providing that Mr. Sheen pay to his ex-wives a specific quantum of child and spousal support on a monthly basis.

The quantum of his support obligation would be largely based on his income. But now that Charlie has been fired from his job, will and should his support obligations be impacted?

In other words, how does the loss of a payor’s job and hence that stream of income, especially where the loss of that income appears to be as a result of his or her own conduct, impact the payor’s child and spousal support obligations.

The Child Support Guidelines provide that income MAY be imputed to a payor spouse where he or she is intentionally unemployed or underemployed.

Section 19(a) of the Guidelines allows a Court to impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include that the spouse in intentionally under-employed or unemployed.

The word "intentionally", in the Guidelines does not mean that the payor made a deliberate decision to become under-employed.

What is intentional unemployment or underemployment?

When a payor has an obligation to pay support but does not work or does not work to his or her full potential or capabilities, that payor is said to be intentionally unemployed or under employed.

This can include but are not limited to circumstances where the payor fails/refuses to obtain alternate full time employment after:

• quitting his job
• being laid off; or is
• is fired

A payor can also be considered to be intentionally unemployed or under employed if he:

• leaves his current job to pursue an alternate career or business that fails to provide an income stream
• reduces his work hours unilaterally or otherwise
• works only part time when full time work is available

A payor is not entitled to take advantage of his own voluntary reduction in income to reduce his support obligations or in the case of Mr. Sheen the loss of employment due to his own conduct.

Once it is determined that a parent or spouse is intentionally unemployed or under employed, how is income imputed to them?

When the Court imputes income to a payor, there must a rational basis underlying the selection of such a figure and it must be grounded in evidence

Typically, the Court will look at what the payor was historically capable of earning and impute income to the payor accordingly.

In cases where the payor fails or refuses to obtain employment for which they are trained, the court may look at the availability of jobs in that field and industry standard of salary, benefits and otherwise to determine the quantum of income to be imputed.

The Court may also look at other factors in imputing income, including the age of the payor, his job history, education, skills, health, standard of living when the parties were married and in addition to available job opportunities.

Once income is imputed to the payor, child and spousal support obligations can be determined accordingly.

If you would like more information on this and/or other issue, please feel free to contact us at the Feldstein Family Law Group.

Thank you.