September 18, 2003

Imputed income

Regarding Gene Healy's item on support payments after divorce (Sept. 18): It's easy to make a lot of laws sound silly, especially when the appraisal is based on anecdotal evidence or ignorance of the rule's history or purpose.

I first ran into the Imputed Income issue as a summer law clerk in 1978. I was amazed to see that how the rule was applied to what appeared to be a good faith reduction in income. The topic interested me enough, that I used it for my Third Year writing requirement, which later was the basis for my first two legal publications, the first of which surveyed the law in each state, and the second of which attempted to define a rule that was fair to the support-payer and protected the child's support needs.

A decade later, when I actually saw real child support cases, the source of the imputed income rule became clear (and many of my ivory-tower posturing seemed rather juvenile) -- a very large percentage of non-custodial parents (mostly men, of course), take bad faith, irresponsible actions aimed at greatly reducing their child support obligations, often as reprisal against the child's mother: quitting jobs, cooking books if self-employed, switching to under-the-table sources of income, suddenly finding a need to perform public interest work. In addition, courts were faced with fathers who were able to work but were chronically unemployed. The imputed income rule was an attempt to protect the child, keep children and mothers off welfare or help compensate the State for welfare parents, and protect the court against manipulation.

Some states and some judges apply the imputed income rule in a fair-handed manner -- checking into the bona fides of the decision. Others apply the rule in a far too abrupt and blackline manner. Working to make the rule work in a manner that is fair to all parties makes sense. Ridiculing it out of ignorance or some ideological distrust of government is foolish.

David Giacalone, editor, EthicalEsq.?

Posted by Walter Olson at September 18, 2003 12:11 PM
Comments

Very well said. I could not agree more. The website that was mentioned in the original post actually indicated that "imputed income" is used in limited situations (like the ones discussed in your post).

Family law is a really hard area of law to do, and I always feel a mixture of admiration and pity for lawyers who work in that area. A lawyer I knew a little who did family law was shot to death by a client (and, no, it was not disclosed later that he had cheated the client--the client was simply deranged). When reports talk about the "1.5 times an American is going to need to see a lawyer in their life," or however many times it is, I imagine they are talking about a situation involving some aspect of family law.

Posted by: Jeff at September 18, 2003 05:00 PM

It doesn't matter what one COULD make - the beauty of the concept of FREEDOM is the ability NOT to work as hard as one wishes. The "imputed income" is thus a violation of very basic rights - the right to work as I wish.

I don't even care if it IS in retaliation or out of spite. That is pathetic, but still my right. But what if I really WANT a lower-pressure position? Lower pay goes with that. What if I want to work LESS? Lower pay goes with that, too. What if I WANT to be a street bum (yes, there actually are a FEW people like that, just not many)?

In short, "imputed income" is a complete and utter crock, just like much of "family" law.

Posted by: Deoxy at September 19, 2003 09:57 AM

Shouldn't imputed income be applied to both parties. Many professional moms can earn significantly higher income than their spouse and thus be able to provide a higher proportion of child support. It will never happen!

Posted by: Pat at September 19, 2003 11:33 AM

My secretary (who is not a well-to-do professional woman) was telling me just yesterday about how, after she got divorced, her ex-husband, a union carpenter, went on unemployment for a full year so he could avoid paying child support. He also talked some lamebrained judge into reducing his child support payments to reflect his reduced income. During that time, she couldn't get any federal or state assistance and wound up relying on a food bank at a church to feed herself and her kids.

That guy clearly was a proud American with a strong sense of freedom, but if I had been representing my secretary in that suit I would have insisted that his child support be calculated according to the income he would have received had he been working. This would have given him an incentive to go out and find a job, so that his kids would not be in actual want.

Try to put a human face on these situations, Deoxy.

Posted by: Jeff at September 19, 2003 01:42 PM

Child support is for child expenses to make sure the children can live (eat, sleep, learn, be clothed, etc.)...right? Income is not a predictor of child expenses and has nothing to do with the expenses of raising a child...actual and predicted expenses are a predictor of expenses, not income. Using income as a basis of child support is wrong when you can figure out how much money it really costs to support a child, which you can always do...that is easy to do. Imputed income makes the child support worse than wrong...it is the work of the devil. Imputed income comes from a flaw of using income for child support calculations. Note - all judges that impute income are laimbrained...imputed income is just a made up number plugged into a made up child support calculation resulting in an arbitrary/imperfect/always unfair outcome for at least one of the parties and/or the children. Imputed income leads to improperly high and improperly low child support awards. This benefits one party financially and hurts the other, but is bad for both of them. The receiving party gets a disincentive to work hard because of new entitlement $$$ they get for free. The paying party gets a disincentive to work hard because $$$ are going to the other person in an arbitrary way and may not even make it to the children. The kids lose overall from this system as it puts the parties against each other in a battle. How to fix this disaster? Make a law that takes child EXPENSES and divides them in EXACTLY IN HALF between the parents regardless of income...what's so wrong with that? Nothing...it would work...and there are no lawyer fees that way.

Posted by: Scoop at October 12, 2003 01:38 AM

Go Scoop! I really like that answer! The imputed income rule has nothing to do with the child's needs, and everything to do with what the father wants to reveal. As the son of a formerly divorced step-father who was over-burdened with child-support fees, I concur. My father NEVER missed a payment to his ex - and she brutally chiseled him for every cent she could. It would have been a lot easier on him, the children (both my mother's and his!) and the ex-wife (she wouldn't have wasted so much time chiseling him - though she wouldn't think that) had Snoop's plan been the rule.

Posted by: Kanoleez at October 13, 2003 07:09 PM

After I remarried, my new wife's inability to adjust to living in the US eventually resulted in clinical depression. Consequently, we moved to Australia so she could be near her family. After several years of treatment, she has fully recovered. In the meantime, I ran out of savings to pay my California support order and, as a resident alien, initailly had trouble finding any work at all let alone at or near my former professional level.

Although I continued to pay as much support as I could, between Aussie pay scales and the foreign exchange rates, I simply couldn't keep up. Although I asked the California court to reconsider the support amount, they refused because of the 'imputed income' rule. Even if I had paid my entire gross income every month, it wouldn't have been enough. During this same period, my ex's net income (adjusted for exchange rates, taxes, etc.) was higher than mine but that wasn't considered significant even by the attorney I hired to represent me in California.

So what has 'imputed income' done to me? I have a debt I'll never be able to pay as well as the threat of arrest and imprisonment if I don't somehow manage to pay the debt. And that's only the consequences at the state level. I haven't factored in the fereral implications of having a support arrears. Nor have I even begun to describe the impact on my current marriage and the damage that has done to that relationship nor the level of contempt for American jurispurdence my situation engenders among my Aussie friends.

So, did I pay support? Yes, just not enough. Do I still believe in paying support? Certainly. My kids had needs that I was responsible for even if they weren't in my household. After the application of imputed income, how do I feel about family law in California? I suspect that Franz Kafka could describe my attitudes better than I can. Will I return to the States? Not bloody likely, mate! I have an Australian court order discharging the arrears (although California ignores that decision), my American passport has been cancelled, and I'm now stuck in Oz. I'm unlikely ever to see my sons or daughter, my sisters or any of my other family again unless they come to Australia. Or I get extradited. Whichever comes first. But at least I still get to vote.

Posted by: Joe Rooney at October 29, 2003 10:56 PM

I'm in a divorce battle where my ex-wife-to-be is a board-certified family nurse practitioner (with a master's degree) that worked at least part-time for 11 of our 16 years of marriage. Her top salary was over $30/hour. She's claiming that health concerns now prevent her from working. She has some chronic health problems (kidney disease, high blood pressure, history of blood clts) but is far from disabled. My attorney is asking the court to impute income to her. I'm a GS-15 Government employee with gross income of $112K/year, and she wants child support plus $4K/month in spousal support. The court better impute income to her, or she will have no incentive to contribute to supporting herself and our 13-year old daughter.

Posted by: Josh Davis at November 6, 2003 11:05 AM

Josh -
Somehow, I don't think it's going to work that way. In any event, it doesn't sound like your ex-spouse is in the same pay bracket you're in. With her disabilities which likely reduce her employment prospects plus custody of your daughter, I doubt if any attorney could convince the court to change your support obligations. If you decide to give up your GS-15 position and work for less as, say, a burger flipper at the local McDonalds, then you can expect that the real meaning of imputed imcome is going to hit you like an al Quida truck bomb. Look, you're going to be off the hook in 5 years when your daughter turns 18, right? Better you just suck it up and drive on. Yes, you're going to take a short-term financial hit, but with aggressive financial planning and creative negotiating (offer more in child support now to offset and reduce spousal support, for instance) you can mitigate some of the impact. Remember, you're your attorney's client, so get options. Insist on it. Be generous wherever you can and remember you can replace the "things" your ex's going to get with something newer and better later. Negotiate in good faith, never forgetting that the court will consider both sides. Keep these things up front and you'll get over it.

Posted by: Joe Rooney at November 9, 2003 11:25 PM

What will your advice be for me; I’m going for child support calculation with in two weeks, for the most recent two years I have had two jobs one as computer programmer which paid me around 40K, plus my own business which paid me about 25K for a total of 65K. I had advised my lawyer to not speak about my 40K job since I had not had that job for couple of month now. She had told me if that is the case I should go a find other lawyer. The ex’s lawyers may request income to be imputed. Now I ‘m not sure of what to do. On the other hand, the ex had dropped everything and filed for unemployment.
Plus she will come to court and play the victim strategies. What will be the worst-case scenarios if I was to just report my 25K earning? further more, my employment ID had expired since i'm not us citizen therefore could not hold my 40K job will that be a good reason to be underemployed.

Posted by: Frazer at December 2, 2003 06:27 PM

Frazier --
I'm not a lawyer and I can't presume to give anyone legal advice, but anyone who's ever watched TV or gone to the movies knows that you don't keep secrets from your attorney. Not ever. There's little worse for you, personally, than to have your lawyer get mousetrapped in court over somehting you didn't share. Remember, you're paying a professional for professional advice. If you don't pay attention to that advice, then you're wasting your money and the attorney's time.

The awful fact is that neither you nor I can represent ourselves successfully in court without one. What you need is a 'junk yard dog' who'll fight for your best interests. If your ex's lawyer is going to play the imputed income card, then your lawyer has to be able to counter. I can see lots of potential issues on both sides in your post.

Look, I now live in Australia. I work at approximately the same professional level as my old job in California, but Aussies don't pay as much for the same thing. Couple that with the foreign exchange rate and I make about 1/3rd of what I used to make in California. As far as the California court is concerned, the divorce was filed in California and their standards/expectations apply, not the reality of the situation in Australia. You may be in the same relative situation. Remember, the theory of imputed income is that you deliberately reduced your income in order to reduce your support liability. It's up to your lawyer to show the contrary. Where you can prove that events outside your control are the reason your income is reduced, then you should prevail. Naturally, no guarantees, but you must have a lawyer who'll represent your best interest and not merely parrot that it's court policy, or that's the way it's always handled, or whatever, and you just have to accept the inevitable. If you don't believe that whomever you currently pay isn't working for you and is just going with the flow, you have to find someone else. Keep in mind that wherever you live, all the family law attorneys know each ohter. It's a small, small world, and they all meet in court and share experiences. Like I said, don't keep secrets. They don't.

Also remember that your ex can easily play the 'victim' card. Without an aggressive and affirmative offensive strategy by your lawyer, then you're going to have to wear it. So know what's likely to happen, actively participate in the process, and never, ever keep secrets from your lawyer. Life's too short to piss off the only person between you and your ex's version of highway robbery.

Last piece of advice. Don't get mad. Don't stay mad. And find a support group that will help you get through the process and get over it. No matter what you think right now, I can certify that your divorce is just a minor speed bump in a long life. Don't let it consume you. Get out, live well, enjoy life, and your ex will shrivel up with envy. If you don't, then she 'wins'. Is that what you want? Nah, didn't think so.

Posted by: Joe Rooney at December 4, 2003 08:36 PM

Jeff,

See above for the "human face" on these situations. The truth is that if my income goes down, MY INCOME GOES DOWN. It doesn't matter what I COULD be making - I am getting less. *I* have less. If I were still married ("I" being the person who is now getting less), the amount of money I spent on my children would go down BECAUSE I WOULD HAVE LESS MONEY. It doesn't matter WHY. That's the beauty of freedom. "Imputed income" is a tyranical crock.

What if, say, I actually want to live on the street? It's very rare, but I have actually known someone like that. Hitch-hike the country, no income. Under "imputed income", I can no longer legally do that. In fact, it's very likely that I can no longer do a great many things, except work in exactly the same job I am currently in (or an equivalent in the same field). I am now, for all practical purposes, a slave. I work where the government says, or else.

YOU try to put a "human face" on it, Jeff. Oh, wait, I forgot... it's "for the children", so it must be good!

Posted by: Deoxy at December 8, 2003 12:26 PM

Deoxy --
Yup, I absolutely agree. If you don't have it, you can't pay it. Simple as that. The theory and practice of imputed income is supposed to apply to those who decide to quit a job or take on lower paying work simply to get out of paying support, and there are folks like that all over the place. Can't imagine why. Can you? If you wind up making less for reasons outside of your control, then imputed income shouldn't apply. Unfortunately, that is frequently not the case and guys like me wind up with huge support arrears bills that we can't pay. Enter the local DA who says pay up or we'll arrest you and put you in jail until you do. At the least, they'll take virtually all of your net income to satisfy our outrageous claims. And if you wind up living on the street, tough! But, hey, it's for the good of the children, right?

Oh, and don't forget the federal law governing support arrears that Clinton signed into law. If you get more than $5,000 in arrears, you're liable for federal prosecution as well as local and state prosecution. Gee, federal prison or state prison, what an option!! Debtors prison, just like back in the 1700s. What a marvelous advance in jurisprudence.

Imputed income is just the tip of the iceberg when it comes to draconian treatment of non-custodial parents. America, land of the free and home of the brave? Not so's you'd notice it, brother! The support and custody laws, as actually applied, defy normal reason and logic as understood by the average person on the street. Now, if we could just slam the attorneys and judges with the same orders we get hit with....? Nah, not even Hollywood could be that creative.

Posted by: Joe Rooney at December 9, 2003 07:33 PM