In Indiana, when a trial court is addressing issues of custody, the court will almost always issue a child support order. This is true in both divorce and paternity cases. Child support is typically not an issue that can be waived by the parties, because the courts view child support payments as the child’s money. Thus, it is not the parents’ right to determine whether or not to pay child support. Child support is, almost always, mandatory.
There is one exception to mandatory child support orders. In some cases, a the court might waive child support at its own discretion, if the Child Support Obligation Worksheet provides such a nominal amount that a child support order would not be necessary or there is just cause as to why child support should be waived.
It is important to get an accurate calculation on the Child Support Obligation Worksheet, a worksheet provided by the courts, to determine how much the owing parent will be expected to pay in child support each week. The Worksheet is the only means for the courts to determine what the support obligations should be or whether child support can be waived. The first data recorded on the Worksheet are the incomes of the two parents. If both parents are regularly and fully employed, the courts will usually verify their income through paystubs.
But what do you do if the non-custodial parent has irregular income?
If the non-custodial parent (1) is self-employed, (2) receives cash payments, or (3) works temporary jobs, it can be challenging to determine a fair amount of income to attribute to one of the parents. Knowing how the courts typically impute income to these irregular forms of income will ease the task of calculating child support.
OBTAINING EVIDENCE OF IRREGULAR INCOME
In determining a child support obligation, the parties should exchange financial information, including the three most recent paystubs. One pay stub is often misleading as it does not always reflect average hours worked or amount paid per pay period. Three pay stubs gives the parties and the court a better idea of how many hours that individual works and how much he or she gets paid on a weekly basis because the child support calculations are based on weekly income and expense amounts. When a non-custodial parent is self-employed or paid in cash, pay stubs may not exist, making it difficult to verify income. If the non-custodial parent is paid in cash, sometimes the court will allow for the employer to be subpoenaed for pay roll records to find out what has been recorded as the non-custodial parent’s income. However, the employer might not be keeping those records and the subpoena of those records will not reveal what the non-custodial parent is getting paid. The court will also allow a subpoena of the non-custodial parent’s bank statements to determine what cash he or she is depositing as a form of income, but this will not be helpful if the non-custodial parent does not own a bank account or does not deposit the cash payments. When a non-custodial parent is a temporary worker, his or her pay stubs may reflect an unstable flow of income. So, irregular or poorly documented income clearly presents problems for the custodial parent and the court in calculating child support obligations.
If pay stubs are not helpful in calculating income for the non-custodial parent or if they do not exist at all, then tax returns are generally a useful tool. The court often requests the last three years of tax returns to see what the non-custodial parent has reported on his or her tax returns as income. This is not always the most accurate method of determining an individual’s income, but is sometimes the only way for a court to determine what a non-custodial parent is getting paid, if he or she has an irregular form of income. If the non-custodial parent is not reporting income on his or her tax returns or does not file tax returns, then it can become difficult to obtain evidence on the non-custodial parent’s income. To summarize, the courts will look to verify income using one or more of these documents-
- Payroll records
- 1099’s for independent contractors
- Employer information pursuant to a subpoena
- Bank records
- Tax returns
IMPUTING INCOME TO IRREGULAR EMPLOYMENT
In circumstances where the non-custodial parent’s income has not been properly documented, or the available documented information is not helpful in calculating income, the court can impute an income to the non-custodial parent. The courts typically impute income to the non-custodial parent by factoring such things as-
- His or her past employment,
- The average pay in the community for the position that he or she holds,
- The amount of money that the non-custodial parent could be making in a position similar to the one that he or she currently holds,
- His or her skill-set, and
- Any other factor that might help the court determine the non-custodial parent’s income.
If the court does not have enough information to properly determine a wage for the non-custodial parent, minimum wage might be used to impute income to the non-custodial parent.
Attorneys Must Be Creative
Experienced family law attorneys know that there are many ways to prove a parent’s income. Knowledgeable attorneys can be creative in finding data on a parent’s sources of income, and there is no right or wrong way to prove that a parent is hiding income in order to lower his or her child support obligations. Similarly, using good data will reduce the chances that a court will wrongfully inflate or overstate a parent’s obligation.
Calculating Support Before Going to Court
The family law attorneys at GRIFFITH LAW GROUP also recommend calculating child support before seeking any relief from a court. When doing preliminary child support calculations before going to court, it is important to determine what issues might arise. The court will impute an income based on the evidence that it is given, so providing the court with as much evidence as possible will not only help the court make a more accurate determination, but it will prevent the custodial parent from feeling like he or she is unnecessarily carrying a heavier burden when it comes to child care costs. Parenting is not only an emotional and physical responsibility, but a financial one, and both parents must be held accountable for their part for the health and welfare of the children.
Need help determining how to calculate a child support obligation when one parent has an irregular income? If you have any questions about family law matter call the law firm of Griffith Law Group at (317) 236-0486 for a free consultation with a lawyer.