Calculation of Irregular Income for Child Support
The calculation of child support requires a court to determine each parent’s “weekly gross income.” The determination of a parent’s weekly gross income for purposes of child support can be a complex calculation that is controlled by the Indiana Child Support Guidelines.
The Child Support Guidelines define Gross Weekly Income as “actual weekly gross income of the parent if employed to full capacity, potential income if unemployed or underemployed, and the value of ‘in kind’ benefits received by the parent.” For some, calculating weekly gross income is a straightforward calculation. For many, their source(s) of income involve some form of inconsistent income. This includes hourly employees, overtime pay, commissions, bonuses, and partnership distributions. Each of these forms of income can be included in the calculation of weekly gross income, but this is a fact sensitive determination.
The Child Support Guidelines provide guidance on how to calculate gross weekly income when the parent receives inconsistent or irregular income. The decision to calculate overtime pay as gross income for purposes of child support centers around the dependability of such income. The Guidelines state that care should be taken to set support based on dependable income, while at the same time providing children with the support to which they are entitled. Therefore, overtime income should not be included in the calculation of gross income for child support if the income is not dependable or would place a hardship on a parent to maintain.
It is not the intent of the guidelines to require a party who has worked overtime to continue doing so indefinitely just to meet a support obligation. If a parent is working such significant overtime that it is interfering with their ability to exercise parenting time, the Court may properly exclude the parent’s overtime from calculation of their gross weekly income. The trial court should not require a parent to work so many hours per week to pay child support that they cannot exercise parenting time with their child. A high value is placed on promoting parenting time between children and their parents.
If a Court includes irregular income in a parent’s weekly gross income, it must be equitable. This means that a Court may need to determine a unique way to factor in the inconsistent income, instead of just determining the average of the irregular income in past history. This may include a quarterly payment of the actual inconsistent income received, a percentage of past irregular income, or yearly true-up payments.
It is important that a parent’s child support obligation accurately reflects their income to ensure that they can maintain payment of their child support. If you have questions about child support, contact the experienced attorneys at Slotegraaf Niehoff, P.C.