A common problem in divorce and child custody cases is calculating child support when incomes are variable and fluctuate. Some examples are:
- Father has a seasonal business (such as construction or landscaping) and makes most of his money June through August. The divorce trial is in February. He claims little to no income.
- Father has a good-paying job, but he quits during the middle of a custody battle because he doesn’t want to pay support.
- Mother or father is in sales and most of the salary is commission based. There are good months and bad months, and even good years and bad years.
- Mother has a small business with explosive growth potential, but very little revenue at the time of a divorce.
- Mother is in a transitional job that has potential for better pay in the future, but currently provides little income.
Determining Child Support with Fluctuating Income
As you may know, Oregon’s Child Support Calculator is fairly easy to use with known income levels. You may not like the result after using it, but it’s at least pretty straightforward.
When we don’t know what a parent’s current income is– or what it might be in the future– we have to turn to the Oregon Court of Appeals for guidance. Their opinions are not only helpful but controlling upon the trial courts an Oregon Division of Child Support.
The Oregon Court of Appeals has had several cases which discuss how to properly calculate child support awards when one or both parents have variable or fluctuating income.
In the 2011 case of In re Marriage of Leif, the father argued that the trial court erred by averaging his income over three years. The Court of Appeals held that– when determining a parent’s gross income for child support purposes– a trial court must inquire into the parent’s present income. See Waterman and Waterman, 158 Or.App. 267 (1999). However, the court can consider past income if there is fluctuation or other reason to be concerned that the most recent year’s information alone will not be accurate. See Gudmundson and Gudmundson, 145 Or.App. 135 (1996) (finding a three-year historical average of the husband’s earnings appropriate where the husband’s earnings varied from month to month and his testimony about an anticipated drop in income was not entirely credible or fully developed).
In the 2017 case of Matter of Marriage of Skinner, the Court of Appeals held:
For purposes of calculating child support, a parent’s income can include the parent’s actual income and potential income. OAR 137-050-0715(1). “ ‘Actual income’ means a parent’s gross earnings and income from any source [.]” OAR 137-050-0715(2). On the other hand, potential income “means the parent’s ability to earn based on relevant work history, including hours typically worked by or available to the parent, occupational qualifications, education, physical and mental health, employment potential in light of prevailing job opportunities and earning levels in the community, and any other relevant factors.” OAR 137-050-0715(3). If a parent’s actual income is less than the parent’s potential income, the court may impute potential income to the parent. OAR 137-050-0715(6). “Thus, a parent’s income under OAR 137-050-0715 must be based on the income that the parent is receiving or could be receiving.” Adams and Adams, 274 Or. App. 423, 427, 360 P.3d 742 (2015). However, a finding that a potential income exceeds his or her actual income must be supported by “nonspeculative” evidence “and relate to * * * present earning capacity.” Andersen, 258 Or.App. at 585-86, 310 P.3d 1171; Leif and Leif, 246 Or. App. 511, 519, 266 P.3d 165 (2011) (“When determining a parent’s gross income for child support purposes, a trial court must inquire into the parent’s present income.”).
Oregon Child Support Modifications Attorney
Our family law firm handles modifications to child support. Call us to schedule a consult. If you’re worried about the cost, rest assured the math will check out. If it’s going to be more expensive to modify child support than it’s worth, we’ll tell you that up-front. However, in most cases, modifications to child support that are handled by an experienced attorney easily pay for themselves. In other words, the gains or savings from receiving an accurate income figure more than pays for the reasonable cost of professional legal assistance.