Income Imputed for Child Support - An Update

Another court holds that courts may "impute income based upon the party's past income or demonstrated earning potential."
In a prior blog post, we examined the issue of imputed income for child support purposes. In a new case, the New York Court of Appeals, Appellate Division, upheld a Support Magistrate's determination that a father must pay child support based on what he was capable of earning rather than what he actually was earning.

At the child support hearing, the father testified that

he had a bachelor of science degree and a master's degree in education. He was also licensed in real estate and insurance. He had previously been a high school teacher and worked in real estate. He also operated an insurance business from 1986 to 1996. In 1996, the last year that he was involved with running his business, he earned an income of $101,000.

After selling that business, the father tried his hand at consulting but was not successful. He said that he tried to find work over the next three years but succeeded only at landing a job selling steel components for $500 per week just three days before the support hearing.

The Support Magistrate was not impressed. The evidence included that

• the father's claimed annual household expenses were approximately double his claimed annual income in 2004 and 2005.
• he did not use savings or borrow money to pay expenses greater than his average annual income.
• he did not liquidate any of his investments.
• he had no outstanding balance on his home equity line of credit.
• his credit card statements showed no unpaid balances of a size and nature to correspond to his household expenses.

On these facts, the Support Magistrate imputed an annual income to the father, reasoning that the father could earn approximately $96,000 a year because of his education and his professional license in real estate, testimony regarding his previous earnings, and the testimony of an expert regarding the father's ability to earn an income.

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