Imputation of Income for Child Support

Angel v. Sandoval, COA20-236 (unpublished 2020).

If your ex, or you, lost a job and income and considered modifying child support to a lower amount in response, it may not always mean that the modification will be granted. Here in North Carolina, it depends on the circumstances surrounding the job and income loss. If it was intentional, with bad faith, then the court may impute income based on the parent’s earning capacity rather than actual current income. However, the analysis is nuanced and can be difficult to show. Below is one such case where there simply was not enough evidence to impute.

• Facts: Plaintiff and Defendant had two children together and, after separation, consented to voluntary child support with approval from the court. Plaintiff filed a motion to modify that support in 2019 based on changed circumstances. Defendant responded and requested the court to impute Plaintiff’s income because at the time she was alleged to be voluntarily unemployed. The trial court granted the modification, and increased child support from $400 to $1,399 a month. Defendant appealed.

 

• Issue: Was the trial court in error when it failed to make findings about Plaintiff’s imputed income?

 

• Holding:

 

• Rationale: A trial court may impute income – meaning, to calculate income based on earning capacity – if a parent is deliberately suppressing his/her income to avoid a child support obligation. But, before the court may impute income, they first must find that the reduction in or lack of income is not the result of actions taken in good faith. This means that the standard is to find deliberate suppression of income. Simply being unemployed by choice is not enough to meet this standard. The issue is decided by evidence showing an intent, or motivation, to suppress income in order to avoid child support. The evidence at trial showed that Plaintiff was not fired from her jobs for any of her actions, and Plaintiff testified that she remained unemployed to care for the children which led to improvements in the children’s academics and extracurriculars. Since none of those actions were motivated in bad faith to avoid child support obligations, the trial court was correct when it decided against imputing income.

 

• Lessons and Observations:

 

1. The bar seems to be set very high for imputing income on a party. There needs to be evidence that the voluntary and intentional actions of a party were motivated by that party’s desire to avoid child support. This may be where evidence showing a lack of reason to be unemployed is more illustrative of motivation. For instance, if Plaintiff did not have a reasonable justification for remaining unemployed, then perhaps the only likely explanation could be a motivation to avoid support. For lack of better words, the mental state of the party for which imputation of income is sought must be derived from circumstantial evidence. This is important, and a family law specialist will understand how to tease out the circumstances to prove or disprove the requisite mental state for imputing income on a parent.