IMPUTING INCOME
November 28, 2011 § 1 Comment
In these unsettled economic times, it’s a fairly common phenomenon that the party who will be ordered to pay child support is working a reduced schedule, or has taken a job with a significant pay cut, or has lost employment. The paying parent wants child support set at the low rate, and the recipient parent wants the court to consider earning capacity.
The law is that “income will be imputed to a child support payor who, in bad faith, voluntarily worsens his financial position.” Howard v. Howard, 968 So.2d 961, 972 (Miss. App. 2007). “[A]n obligor’s financial position cannot be voluntarily worsened in an attempt to lessen his [or her] child support obligation.” Swiderski v. Swiderski, 18 So.3d 280, 286 (Miss. App. 2009). Where a chancellor is not convinced of the honesty or veracity of the parent concerning the parent’s ability to abide by his or her financial obligations, the chancellor is not precluded from factoring this skepticism in the equation when determining the amount of the child support award. Dunn v. Dunn, 695 So.2d 1152, 1156-57 (Miss.1997); see also Grogan v. Grogan, 641 So.2d 734, 741 (Miss.1994). Furthermore, “[t]he chancellor can base child support on the parent’s potential earning capacity.” Suber v. Suber, 936 So.2d 945, 949 (Miss. App. 2006); White v. White, 722 So.2d 731, 734 (Miss. App. 1998).
The key elements are bad faith and voluntariness. Bad faith involves an intent to evade one’s obligation, whether voluntarily or not. For example, it is unquestionably bad faith to ask for a job assignment that will reduce pay; that is voluntary. It is also bad faith to take a job assignment that one knows will lead to a reduction in hours or pay, even though someone else will make the pay-cut decision; that may not appear voluntary, but the intent is to place oneself in a position to evade the obligation via someone else’s decision. Voluntariness, of course, is evident from the facts.
In the case of Wells v. Wells, 35 So.3d 1250, 1260 (Miss. App. 2010), the COA rejected the custodial father’s argument that income should be imputed to the mother, finding no evidence that the mother had reduced her work hours in bad faith to reduce her child-support obligation. The chancellor had found that the mother’s intent in reducing her work hours was to spend more time with the children. The COA also pointed out that the chancellor’s decision whether or not to impute income is discretionary.
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