California Uniform Guideline Child Support
Each county in the State of California uses the same criteria for setting child support, so that it doesn’t matter which county’s family court orders the child support in a particular case. Once the child support factors (i.e., the gross monthly income of each party, any deductible expenses, tax filing status and number of personal exemptions, and the relative amount of time each parent cares for the child(ren) as a percentage of 100%) are determined, each county’s family courts will consistently order the same amount of monthly child support from a software program calculation.
In San Diego County, each family court judicial officer (whether a judge or commissioner), and each Family Support Division (FSD) commissioner, uses a software program called DissoMaster to determine the level of child support. The child support factors are included in the calculation, and the amount of child support for each child is calculated. Unless good cause exists to deviate from the amount of support indicated by DissoMaster (such as an extremely high income of one of the parties), the judicial officer must order that amount. The judicial officer has no discretion to do otherwise. Almost invariably, in child support (and spousal support) litigation the dispute between the parties is focused the current level of income or earning capacity (i.e., the level of income that the party should have if he or she were gainfully employed full-time), and the respective timeshare (i.e., the amount of time each parent spends with the child(ren)).
There are few limitations on what is income for purposes of calculating child support. Family Code section 4058(a) states that the annual gross income of each parent means income from whatever source derived, except as specified in subdivision (c) and includes, but is not limited to, the following:
(1) Income such as commissions, salaries, royalties, wages, bonuses, rents, dividends, pensions, interest, trust income, annuities, workers’ compensation benefits, unemployment insurance benefits, disability insurance benefits, social security benefits, and spousal support actually received from a person not a party to the proceeding to establish a child support order under this article.
(2) Income from the proprietorship of a business, such as gross receipts from the business reduced by expenditures required for the operation of the business.
(3) In the discretion of the court, employee benefits or self-employment benefits, taking into consideration the benefit to the employee, any corresponding reduction in living expenses, and other relevant facts.
Additionally, add-backs are considered gross income. Add-backs include personal expenses improperly deducted as a business expense from gross income to derive adjusted gross income. Also, paper deductions such as property depreciation must be added back as income for purposes of calculating support.
Earning Capacity and Imputation of Income
Family Code section 4058(b) gives the family court judge discretion to consider the earning capacity of a parent in lieu of the parent’s income, consistent with the best interests of the children.
For a parent whose skill level is above what he or she is earning, the judicial officer may “impute” income (i.e., set a fictitious amount of income based on earning capacity from evidence that the parent could work at a specific gross income level but is not earning at that level for whatever reason) for the purpose of calculating child support. The judicial officer cannot impute earnings to the parent’s current earnings: the judicial officer must use one or the other. In San Diego County, if the judicial officer finds that the actual monthly income of a parent is below minimum wage, generally the judicial officer will impute minimum wage and forty hours of work per week. If, for example, a parent is working at minimum wage as a full-time wage earner, and he or she has a vocation or is licensed in some particular field of employment, the judicial officer may impute income. Typically, this requires an order for a vocational rehabilitation examination and testimony from the evaluator as to the skill level of the party, job availability, and typical earnings at that skill level in the San Diego County area.
Additionally, if a party has non-income producing (or under-performing) property, the judicial officer may impute passive monthly income in addition to the earnings of a parent. For instance, if a parent has $5,000.00 in gross monthly income but has non-income producing unimproved land along the Monterey coast worth $10,000,000.00, the judicial officer has the authority to determine how much passive income that property would reasonably produce were it sold and the proceeds placed in the marketplace. Then, he or she would add that monthly amount to the party’s gross monthly income to calculate child support. This type of imputation will almost certainly require expert testimony as to the fair market value of the property (unless the parents agree as to its fair market value) and additional testimony as to the fictitious gross monthly income derived from the proceeds. If the $10,000,000.00 (less costs of sale) were invested and the evidence elicited shows it could reasonably earn 2% interest per year (i.e., $20,000.00 per year), then the gross monthly income from that investment would be $1,667.00 per month (=>$20,000.00/12), which would be the amount included in the child support calculation in addition to the $5,000.00 in W-2 earnings, and any other passive monthly income of that parent.
Exceptions to Income
Family Code section 4058(c) states that annual gross income does not include any income derived from child support payments actually received, and income derived from any public assistance program, eligibility for which is based on a determination of need. Child support received by a party for children from another relationship shall not be included as part of that party’s gross or net income.
In addition to subsection (c) above, some exceptions to income are inheritance (generally), new-spouse income, and Social Security derivative payments to the custodial parent on behalf of a child of the obligor, based on the obligor’s disability (Marriage of Daugherty (2014)).
When the Superior Court orders one parent to maintain health insurance coverage for the parties’ minor child(ren), that coverage must be utilized at all times unless it can be shown that the coverage was inadequate to meet the child’s needs, under Family Code section 4063(e)(1). If a preferred healthcare provider exists under the court-ordered coverage, that provider must be used at all times, consistent with the terms and requirements of the coverage, under Family Code section 4063(f)(1). If either parent utilizes a provider other than the preferred provider, and inconsistent with the terms and requirements of the coverage, that parent is solely responsible for any unreimbursable cost in excess of the cost that would have been incurred under the court-ordered coverage had the preferred provider been used, under Family Code section 4063(f)(2).
When determining whether a parent has violated Family Code section 4063, the Superior Court must consider all relevant facts including geographical access, reasonable availability of necessary healthcare which complies with the court-ordered coverage, the need for emergency medical treatment that may have precluded the use of the court-ordered coverage, the child’s special medical needs, and the reasonable inability of a parent to pay the full amount of reimbursement within the 30-day period and the need for a court-ordered repayment schedule, under Family Code section 4063(g).
The Superior Court may but does not have to order the following as additional child support, under Family Code section 4062(b): 1) costs related to the educational or other special needs of the parties’ minor child(ren); and, 2) travel expenses for visitation.
Social Security Derivative Benefits
A noncustodial parent’s Social Security retirement or disability payments to the custodial parent on behalf of an eligible child of the noncustodial parent must be credited toward the monthly support obligation, With respect to arreararage, it will satisfy the monthly support obligation first, and then any accrued principal arrearage which remains unsatisfied, and then accrued interest remaining unsatisfied. (Marriage of Hill and Frencher, Sr. (2016).)
Child Support Arrears and Priority of Payment
A child-support arrearage accrues interest at the legal rate, which is ten percent (10%) simple interest per year. In crediting payments toward any support arrearage, monies are first credited toward the current month’s support obligation. Any remaining money will then be credited toward the accrued principal balance remaining unsatisfied and then toward accrued interest that remains unsatisfied. (Marriage of Hall and Frencher, Sr. (2016); Code Civ. Pro. sec. 695.221.)
Income Withholding Order (IWO)
An employer must withhold an employee’s income for the payment of child support. Under Family Code section 5246(e) and 15 USC 1673(b), when an employer is served with a valid IWO for child support, the employer must withhold within ten (10) calendar days whatever amount has been ordered up to a maximum of 50 percent (50%) of the employee’s weekly net disposable earnings (which includes W-2 income as an employee and 1099 income as an independent contractor). However, if an arrearage is outstanding for more that twelve (12) weeks prior to the beginning of the workweek for which wages are being withheld, the employer must withhold sixty-five percent (65%) of the employee’s net disposable earnings.
A copy of the IWO must be sent by the payee or his or her attorney to the DCSS State Disbursement Unit (SBU) in Sacramento after the Superior Court issues it, and three to five business days later, the payee (usually the custodial parent) must apply online at the California Department of Child Support Services, so that a case may be opened. The DCSS link to apply is here
If the payee does not open a DCSS case in Sacramento, any funds sent from the employer to the SBU will be returned rather than collected and accounted for. The child support will still be owed after it is returned, of course, but it will mean a delay in receiving those funds.