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Legal Eagle: Child support amount also can be based on potential earnings (old article but really interesting).

InsistingOnPrenup's picture

Legal Eagle: Child support amount also can be based on potential earnings
Thursday, April 19, 2001

By Patricia G. Miller

As you might expect, the amount of child support you could be obligated to pay is based largely on your income. But it is a little more complicated than that.

Sometimes it is based on your earning capacity or what you could earn if you tried. Meet six types of people who appear fairly often in support court. Each can require the court to consider the earning capacity question.

 
 
Patricia G. Miller is the permanent equitable distribution master for the Family Division of the Court of Common Pleas of Allegheny County. Her views do not necessarily represent those of the division or its judges.

   
 

First there is Ann, a lawyer earning $100,000 annually who hates her job. She quits, deciding to find something that will be more fulfilling. That turns out to be running her own bed-and-breakfast, where she takes home $10,000 per year. What should she be deemed to earn? Is it $100,000 or $10,000?

Then there is Ben. He had a nice job earning $40,000 per year. Then he got fired for stealing from his employer. He has vowed to turn over a new leaf but is having trouble finding a new job because of his past track record.

Charlie is a recently laid-off steel worker. He has a high school education and 35 years of work experience with different employers in the steel industry. He is 55 years old. Before he was laid off, he was earning $45,000 per year. He has applied for some 50 different jobs but has had no offers at half his prior earnings.

Edith, who is separated from her husband, is not working because she is devoting all of her time to caring for their handicapped child, who has an assortment of special needs and requires almost constant attention. When she was employed, she earned $25,000 per year as a secretary.

Dave is working a 40-hour week in a factory earning $28,000 per year. He also works part time as a se- curity guard. That brings in another $8,000 per year.

Finally, meet Fay. When her marriage ended, she went back to work earning $30,000 per year as a nurse. It wasn't easy, since she had custody of their two school-aged children. Then she remarried and quit her job. Her second husband is a doctor who earns $200,000 per year. She now has a new baby and believes that being a full-time parent to three children is more important than being employed, so she believes that she now has no earning capacity.

In each of these situations, the court is going to have to deal not with the actual current earnings but the earning capacities of these folks. Some are easier than others.

Ann is easy. She could earn $100,000 per year if she wanted to. The fact that she voluntarily quit a well-paying job to earn $10,000 per year doesn't change that. Her child support obligation will be based on her proven ability to earn $100,000.

Ben is more like Ann than you might think. Although he didn't voluntarily quit his job, he voluntarily engaged in the conduct that caused him to be fired. Just like Ann, he is going to be held to what he once earned even though, unlike Ann, he is now having trouble finding a job.

Charlie is easy. There is no way that a 55-year-old man with little education and a lifetime of experience in a dying industry can be held to that higher earning capacity. The court would likely put his earning capacity at, or slightly above, minimum wage, far less than in his working days.

Dave is also easy. Even though he has often worked more than a full-time job, the court is unlikely to require him to do that, concluding that one full-time job is enough. He probably will be held to earn what he makes in his 40-hour-a-week job.

Edith is more complicated. The answer turns on what it would cost the parties to pay an outsider to do what Edith does for their child. If it is more than Edith's $25,000 earning capacity, she will be considered to have no earning capacity since, in a very real sense, her ex-husband is getting his money's worth. If, on the other hand, it would cost less to hire the services Edith now provides for their special-needs child, she probably will be given some earning capacity.

Fay, who married a doctor and then had a new baby, is another tough one. She believes she has no earning capacity because she is staying home to care for her baby. The fact that she married a rich man is irrelevant, since he has no obligation to support someone else's children. The court might look at whether she was a stay-at-home mother when the children of her first marriage were infants. Even if she was, the court is unlikely to give her no earning capacity since to do so would essentially make her first husband pay more support because of a child that isn't his. It is more likely to give her at least some earning capacity, which reflects both her job skills and her parental responsibilities.

You should talk to your attorney any time you or the other parent is earning significantly less than what might be historically expected. It could be important in your case.

Comments

Purplemom's picture

FDH is doing this now... having an "earnings evaluation" since the Harpee got remarried and is now choosing to stay home.