Imputation of Income in a Down-Turned Economy

Given today’s economy, family law practitioners are too often seeing requests to modify support obligations based on reduced income. The ability to base support on a previously inflated or hypothetical income is known as “imputation of income.” But imputation of income, as discussed below, is a two-way street, and unemployed spouses are well advised to secure employment.
In the case of In re Mosley, decided in 2008, a former husband sought a reduction in child support, when he was terminated from his position as an attorney. He earned $400,000 annually, and a child support order was based on this salary. His former wife, also an attorney, stayed at home to raise the children during their marriage. The next position he obtained was approximately half of this salary. He sought to modify his order of support based on his reduced income. He also argued that the court should consider his former wife’s decision to remain unemployed in re-evaluating support.
There is a 2-prong analysis which the courts invoke in evaluating whether to impute income
(1) Whether there is ability to earn income; and,
(2) Whether there is opportunity to work.
The trial court, recognizing the father’s ability to earn bonuses to supplement his salary, refused to modify the support order. The court also refrained from modifying support based on the mother’s apparent ability to secure employment.
On appeal, the court recognized that imputation of his income would be improper, whereas imputation of her income was appropriate based on evidence concerning the mother’s qualifications and available work opportunities.
This decision is to be contrasted with a prior decision from 1995 known as In re Padilla. Here, the father attempted to decrease support when he gave up his position and started his own company. The Padilla court condemned the father for choosing a non-secure career path and compromising his children’s financial support structure.
The Mosley court was very sympathetic in recognizing the father’s earnest attempts and the mother’s lack thereof, and practitioners are well advised to garner this kind of evidence.
Courts clearly want to see that parents are earnestly providing for their children, but clearly are also factoring the economic realities of today.

Sharon Friedman Castiel is a resident of Studio City and practices family law in Downtown, Los Angeles. She can be reached at scastiel@kmfm.com.