With the national economy making positive strides, and the unemployment rate down more than 4% from the same period in 2010, worry about involuntary termination of employment is less of a concern for parties’ involved in a divorce cases in California.
But what happens if the other party voluntarily quits their job? The answer is nothing until one party files a motion to modify support. If the party who quit files a motion to reduce their support obligation, the court has the authority to “impute income” (assign income to a party that is not actually earned) to the party who quit their job.
The court distinguishes between earning capacity for child support orders and for spousal support orders. The application of the law, though similar, is different in some important ways. This blog will discuss the Court’s authority to impute income to a parent for the purpose of setting child support. My next blog will discuss the application of income imputation to a former spouse for spousal support orders.
Family Code §4058(b) provides that the court may, in its discretion, consider earning capacity of a parent in lieu of actual income, consistent with the best interests of the children. The policy behind Section 4058(b), and the cases that have interpreted the meaning and application of the statute, is to further the state’s policy that a parent’s primary obligation is to support his or her children according to the parent’s station in life and ability to pay. California has an overwhelming policy interest in ensuring both parents support their children to the best of their ability.
For party to convince a court to impute income to the other party, they must provide evidence to the court of three important factors to prove “Earning Capacity”. Those factors are, (1) the ability to work, including age, occupation, skills, education, health, background, work experience and qualifications; (2) the willingness to work exemplified through good faith efforts, due diligence and meaningful attempts to secure employment; and (3) an opportunity to work which means an employer who is willing to hire. These factors were set forth in a case called Marriage of Regnery. One way to prove these factors is to show the Court the other party voluntarily quit their job. The implication is the quitting party is still “able” to earn income at a level consistent with their past employment since it was their decision to leave. That is, but for the parent’s decision to quit their job; they would still be earning income at that level. This argument was approved by the Court of Appeal in a case called Marriage of Eggers. In the Eggers case, the Court said, “When a supporting party quits a job, the trial court has the discretion to conclude the parent’s conduct reflected a divestiture of resources required for child support obligations. [The Court] may refer to the former job as the basis for its findings of ability and opportunity and may impute income to the parent based on his or her prior earnings.”
The Court’s authority to impute income to a party is not limited to situations where the party quit their job. If one party refuses to get a job, or has been unemployed for a long period of time, the court may consider imputing earning capacity in these situations as well. In this situation, the party who wants to impute income will need to seek the assistance of an expert, called a vocational evaluator, to provide evidence of the 3 factors discussed above.
Child support requests, especially when they involve a request to impute earning capacity to a parent, can be difficult to navigate without the assistance of skilled family law attorney, so it is important to discuss your case with a qualified attorney.
If you are interested in a divorce, separation or annulment from your spouse we can provide you with information and guide you through your options. Contact our team of experienced attorneys. We are prepared to litigate on your behalf. Nancy J. Bickford is the only attorney in San Diego County representing clients in divorces, who is a Certified Family Law Specialist (CFLS) and who is actively licensed as a Certified Public Accountant (CPA). Don’t settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.