What Is Imputed Income and How Does It Affect Child Support?
- posted: Mar 30, 2020
In South Dakota, both parents have a duty to support their child financially, whether they are married or not. When parents divorce, however, it is typically the noncustodial parent who will be ordered to make child support payments, because the law makes the assumption that the custodial parent is spending his/her money directly on the child.
The income of each parent is a major factor in a court’s calculation of how much support the noncustodial parent should pay. In some cases, as surprising as it may sound, the noncustodial parent will take a lower-paying job or even stop working altogether in an effort to pay less child support. If the noncustodial parent’s income is substantially reduced because of purposeful actions like this, what does the court do?
South Dakota courts are allowed to look past the income each parent claims to earn, calculating child support based on earning capacity. This is known as “imputing income.”
This method is designed to reduce the likelihood that a noncustodial parent will voluntarily become unemployed or take a lower-paying job in order to reduce child support obligations. Of course, there are parents who have legitimate financial struggles and may find themselves unable to earn a salary that matches their qualifications. In these situations, the court won’t impute income.
It is important to note that courts don’t impute income on every noncustodial parent who voluntarily leaves a job. Imputing income will only be done when the court decides the parent took this action specifically to avoid child support.
For example, if a noncustodial parent voluntarily quits his job, the court would look at whether he made genuine efforts to find other employment. If he did not, the court may choose to impute income to him. In another case, if a parent quits her job to go back to school and get a degree that would eventually lead to a higher-paying job, the court may choose not to impute income to her.
When calculating imputed income, courts start from the premise that every parent earns at least minimum wage and works 40 hours a week. As of January 1, 2019, South Dakota’s minimum wage is $9.10, so courts will impute income of no less than $9.10 per hour for 40 hours a week. From there, courts may raise the amount of imputed income based on other factors, such as the paying parent’s:
- Work history
- Current and past income levels
- Other sources of income (unemployment benefits, workers’ compensation, and so on)
Once these and other factors are accounted for, the South Dakota family court judge will decide how much income to impute and what the final child support payment amount should be.
Whether you are a custodial parent seeking child support or a noncustodial parent obligated to pay it, the family law attorneys of Anker Law Group are here to protect your rights. We have extensive experience in child support issues and are ready to help you accomplish your goals. To schedule a free consultation at our Rapid City office, please call 605-519-5967 or contact us online today.