Types of Income Used to Calculate Child Support

Every jurisdiction, including Georgia, has enacted child support guidelines used by the courts to determine what resources should be considered income for the purpose of calculating a parent’s child support obligation. Most of these guidelines employ the term “income from all sources.”

Georgia’s child support guidelines require that the total gross income of both parents be considered. In determining the total gross income, the court must consider income from all sources before any tax deductions. Child support is not based upon a person’s “net” income.

Income from All Sources

“Income from all sources” means the courts will consider all financial payments, no matter the source, to be part of a parent’s income. Although guidelines vary from state to state, the majority of jurisdictions consider the following resources to qualify as income when determining child support:

  • Wage and salary income, including commissions, overtime, tips, and bonuses;
  • Interest, dividends, and royalties;
  • Self-employment income;
  • Net rental income (rent after deducting operating expenses and mortgage payments);
  • All other income received – severance pay, pensions, retirement benefits, social security income, disability benefits, unemployment benefits, annuities, and spousal support/alimony.

What is Not Considered Gross Income for Purposes of Child Support?

The court does not consider the following as “income” for purposes of calculating child support:

  • Child support payments received by either parent for the benefit of a child of another relationship (i.e., not a child considered in the case);
  • Benefits received from means-tested, public assistance programs;
  • Foster care payments disbursed by the Department of Human Services or a licensed child-placing agency;
  • A non-parent custodian’s gross income (for example, a step-parent’s income).

What is Imputed Income?

A court will look carefully at each of these potential sources of income to determine what amount of child support the non-custodial parent can afford to pay. There are circumstances in which the non-custodial parent voluntarily becomes unemployed or is underemployed to avoid paying child support or reduce the child support obligation he or she would be required to pay. In those circumstances, the court will assign income to a parent based on earning potential, not actual income. To impute income in such a circumstance, the court can look at:

  • the previous earnings of a party;
  • a party’s education and training;
  • a party’s experience in a given field;
  • the typical earning for the field in which a party works or has worked.

Examples of Imputed Income

This scenario can help you understand how income can be imputed:

The father works at a hardware store making $15 per hour. Prior to working at the store, he had earned a master’s degree in software engineering and was working as a software engineer. After evidence of his previous earnings, education, and the typical salary for a software engineer is presented to the court, the court rules that his income be imputed to a higher gross monthly income than he is earning at the hardware store, based on his ability to earn such an income if he chose to do so.

Additionally, the court can impute income for a non-custodial parent who under-reports their income, which happens quite often when one party is self-employed or owns a business and keeps their own books. Often evidence can be presented as to the true earnings of the non-custodial parent. Furthermore, the court can look to the fringe benefits someone receives from their company/self-employment to impute their income. These fringe benefits can include:

  • a cell phone paid for by company funds;
  • vehicles provided by the company or the personal use of the company car;
  • meals purchased with company funds;
  • any other benefits received which are paid for by company funds.

Here is a scenario to help explain how benefits can be imputed by the court as income:

The father owns a tree-trimming business. He reports that he only makes $3,000 per month. However, he drives the business work truck as his personal vehicle on his off time. His car insurance and cell phone are provided by the company. He pays for his lunches on the company credit card. Evidence of this is presented to the court. The court decides that he receives benefits worth $1,500 per month for services or property paid for by his company and adds that sum to the income he had previously reported.

Practical Advice

If the opposing party is self-employed, try to track any fringe benefits they may receive. This could help you, and possibly your attorney, impute the other party’s income to a higher amount for the purpose of calculating child support. If the opposing party is unemployed or under-employed, try to gain evidence of any previous employment that they had that would demonstrate the ability to earn a good income.

Under both of these scenarios, an attorney can help you gain the evidence needed to prove to the court that the other’s party’s income is or should be more than is being reported. However, if you, on your own, can legally obtain the proof, it will assist the attorney in developing your case.

Contact an Attorney

If you need help understanding what types of income can be used to calculate child support, we are here to assist. The attorneys at Stearns-Montgomery & Proctor can help make sure that you understand the applicable laws and that a proper calculation of each party’s income, or potential income, is presented to the court, and the appropriate amount of child support is ordered by the court.