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What Is Imputed Income In Family Law Cases?

ByThe Spence Law Firm Dec. 22, 2020

Income, or the amount of money each spouse or parent earns, is a very important topic in 

family law  cases. The parties’ income is used to calculate child support. It’s also used as part of the analysis to calculate alimony. It comes into play in distribution of property and in the award of attorney’s fees as well. Clearly, income is an important family law topic in Orlando and throughout the state so we learn about imputed income. Imputed income is a legal theory the court can use to assign a theoretical “fair” income to each party, which is higher than what they are actually earning at the time. Sometimes one spouse may try and dodge their financial responsibilities by artificially reducing their income before or during the case, which would artificially reduce their child support or alimony payments or their ability to pay attorney’s fees. Some typical scenarios include:

  • The “Lazy Spouse” who will not get a job and argues they have zero income.

  • The “Quitter” who used to work at a high paying job but quit just before the lawsuit was filed to take a much lower level job that pays a much lower salary. Think a high-level executive quitting to take a job at McDonald’s.

When Will a Court Impute Income?

Imputed income is typically used when the financial picture represented by one or both of the parties is inaccurate. The court may impute income on its own, or one of the parties can raise the issue of imputing income to calculate alimony or child support. See Fla. Stat. s. 61.30(1)(b). In this type of situation, the court can assign a fair income to the spouse, or “impute income” to them, that more fairly represents what they could earn by working in good faith. In the McDonald’s example, the court could impute income to the former executive spouse at the salary they left behind. Under the “lazy spouse” scenario, the court could impute income that was earned at the most recent job or another job that fits their skill set and is available in the area. At the very least, the court will impute a full-time minimum wage job to a voluntarily unemployed spouse. It’s the court’s way of saying that the spouse could and should be earning more money than they are currently earning, if they put forth a reasonable effort. A court could potentially impute income based on the ownership or trading of cryptocurrency in a family law case.

Voluntarily Unemployed or Under Employed

Before a court may impute income to a party, the other party must prove that they are voluntarily unemployed or voluntarily under-employed. Physical or mental incapacity may present a defense to an attempt to impute income, as their status is not voluntary. In the case of the “lazy spouse” it’s easy to show they are voluntarily unemployed: They could work if they wanted to, they just don’t. Once voluntary unemployment or under-employment is shown, the court is required to impute income.

How Much Income Will The Court Impute?

When imputing income the Orlando family law court will look at various factors, including the party’s employment potential and probable earnings “based upon his or her recent work history, occupational qualifications, and prevailing earnings level in the community if such information is available.” Previous employment records, tax returns, pay stubs, educational background, and official statistics are some resources the court may examine to establish the party’s employment potential and expected income. In general, the court may not impute an amount of income higher than the party has ever earned, absent “special circumstances.” In practice, imputing income typically requires the party to retain an expert witness who will interview the underperforming spouse, prepare a report and testify to a vocational rehabilitation analysis that matches the spouse with available jobs and their associated income.

Defenses to Imputing Income

The party seeking to impute income has the burden to prove that the unemployment or underemployment is voluntary. A spouse or parent is not voluntarily unemployed or underemployed if their situation was caused by a physical or mental incapacity or other circumstances over which they have no control. Another potential example is a foreign national who is here legally but is prohibited from working and earning a living. If the party’s unemployment or underemployment is not voluntary, the court may not impute a higher income to them. There are other technical and legal defenses to imputing income that go beyond the scope of this informational article.

Consult With An Experienced Family Law Attorney in Orlando

Questions about imputed income in a family law case in Orlando? Call the Spence Law Firm  today to schedule your free video or phone conference to discuss your case in confidence.