When a married couple with children decides to get a
divorce, the determination of
child support is one of the issues that must be resolved. All parents have a legal responsibility
to provide sufficient financial support for their children to secure basic
necessities like food and clothing. This legal duty continues until the
child reaches the age of 18, regardless of the parents’ marital status.
When the parents of a minor child separate, both parents are legally obligated
to financially support their children’s needs. However, typically
courts impose child support on the parent with more financial resources
or who doesn’t regularly live with the child after separation. That
is because the goal of child support is to ensure that a child whose parents
are divorced or otherwise separated has the same financial resources as
they would have if their parents still lived in one household.
Calculating Child Support
Under California law, courts are required to refer to certain guidelines
listed in the California Family Code when determining the amount of child
support a parent owes. Section 4055 of the Family Code provides a formula
for calculating child support based on the income and expenses of the parents.
Under Family Code § 4055, courts combine the total net
monthly disposable income (NMI) of the parents and multiply the sum by the
percentage of time the higher-earning parent will spend with the child. Courts will then take the resulting figure and subtract it from the
higher-earning parent’s NMI and multiply it by a
percentage representing the income allocated for child support:
[Higher earner’s NMI]
– [(Both parents’ NMI) x (% of higher earner’s custody time)]
x [% of income allocated for child support]
= Child Support
Things Included in a Parent’s Net Monthly Disposable Income
Like other matters concerning minor children in a divorce case, California
courts determining issues of child support with the child’s best
interest in mind. The child support formula is based on figures representing
the parents’ respective incomes.
California Family Code § 4058 broadly defines “income” for purposes of calculating child support to mean “income
from whatever source derived. This includes salaries, income derived from
property—such as rents and royalties—property and assets.
Imputation of Income
California law also recognizes that a parents’ income does not include
specific property, but also the potential value of certain assets as well.
Family Code § 4058 also authorizes courts to “consider the
earning capacity of a parent in lieu of the parent’s income consistent
with the best interests of the children.”
Courts have interpreted the phrase “earning capacity” broadly as well, holding that the phrase not only includes a person’s
ability to earn a living but anything a parent earns as compensation for
their labor or use of an asset as capital as well.
These principles provide the legal basis forimputing income for purposes of calculating child support in certain circumstances. For
example, if a parent has the education, training, and opportunity to earn
$100,000 annually, but takes a job that pays $75,000, a court may base
their child support obligation on the $100,000 figure. Courts reasoned
that parents should consider their parental obligations when deciding
to work at less than full earning capacity.
When determining whether to impute income for under-earning parents, courts
consider the following factors:
- The parent’s ability to work in light of their age, skill, education,
health, background, and experience
- The parent’s good faith efforts and meaningful attempts at securing
employment comparable to their abilities
- Opportunities for work in the job market
The earning capacity of an under-earning parent is not the only instance
where a court will impute income to calculate child support. California
law also empowers courts to determine a parent’s income based on
underemployed income-producing assets.
For example, if a parent owns a property with a fair monthly rental value
of $2,500 but rents it out for $1,800, a court can use the property’s
fair rental value when deriving a parent’s net monthly income when
it comes to calculating child support.
Courts have imputed the income of the following assets for determining
- Rental property
- The overall value of stock portfolios
- Home equity
The important lesson of imputing income is that parents should prioritize
their child’s needs over their personal employment and lifestyle
preferences. Otherwise, the court may do it for them.
You Can Count on Hanson, Gorian, Bradford & Hanich for Legal Counsel
If you are concerned about your financial interests when it comes to a
family law matter such as child support, you should seek the advice of
a dedicated legal professional from Hanson, Gorian, Bradford & Hanich.
Our attorneys have dedicated years of their practice to guiding families
in California through the complexities of family law.
If you want to get a better understanding of your legal rights and options,
contact us online or call us at (951) 506-6654 today.