Imputation of Income for Purposes of Child Support

Minnesota’s child support guidelines are based upon an income shares model.  Both parents are expected to support their children in proportion to their respective gross incomes. To calculate the amount of basic child support, the gross monthly income for both parties is used. But what happens when one parent is unemployed or employed on less than a full-time basis? What happens when one party changes their income as a result of a career change or because they are returning to school?

In Minnesota, it is rebuttably presumed that a parent can be employed on a full-time basis and work 40 hours per week. There are some exceptions to this rule for those employed in a trade or professions where a 40 hour work week is not customary. If a parent is voluntarily unemployed, underemployed, or employed on a less than full-time basis, or there is no proof of any income, the Court must impute potential income to them.

The Court has three methods available to make a determination of potential income:

1)     The party’s probable earnings based upon the availability of work, recent work history, and qualifications, in light of current job opportunities and earning levels in the community;

2)    The actual amount of worker’s compensation or unemployment compensation that a party is receiving due to unemployment; or

3)    The amount of income a party could earn if they were working 40 hours per week and earning 150% of the current federal or state minimum wage, whichever is higher.

However, a parent is not considered voluntarily unemployed, underemployed or employed on a less than full-time basis if they can demonstrate that the unemployment, underemployment or employment on a less than full-time basis is:

1)    Temporary and will ultimately lead to increased income;

2)    Represents a bona fide career change that outweighs any adverse effects that a party’s lowered income may have on the child; or

3)    Due to a party’s physical or mental incapacity or because a party is incarcerated.

The burden of proof is on the party that is unemployed, underemployed or employed on a less than full-time basis to show the court that they meet one of the above-named exceptions to avoid the Court imputing potential income to them. While one party may stop working to attend school, they have to demonstrate for the Court that their decision to attend school will allow them to earn greater income later on. If they are not able to show that, the Court will be required to impute potential income to them regardless of the fact that they are unemployed or employed part-time. Similarly, with a career change, the burden of proof is on the party making the change to show that career change is more beneficial than any negative effects the reduced income may have on the child. The possibility of potential income is an important consideration for either party when trying to establish or modify child support.

If you have any questions about child support or any other family law issues, please contact us as we are here to help you.

Attorney Lori A. McLaughlin