Illinois Matrimonial & Family Law

Imputing Income

by Wes Cowell; updated 16 November 2016 -- suggest a correction

Income may fluctuate (sales commissions) or may be sporadic (quarterly or annual bonuses).  Some obligors deliberately reduce income when divorce proceedings start.  What can you do?  Impute income!   Need advice?  Call, leave your info., or scheduleschedule a consult.

Background:  Parties facing a child support or maintenance obligaiton may deliberately reduce income or structure income and benefits in an attempt to minimize the potential obligation.  To prevent an obligor from unfairly evading or minimizing the child support or maintenance obligation, Illinois law permits judges to “impute” the value of benefits and perks and include as part of the obligor’s income.  An employer-provided car, or employer-subsidized housing, even company cell-phones and frequent flyer miles, should all probably be considered as income when calculating child support.  In In re:  Marriage of Heil, 233 Ill.App.3d 888, 599 N.E.2d 168, 174 Ill.Dec. 622 (5th Dist., 1992), a divorced father had access to a company-owned hunting lodge for the purpose of entertaining clients.  He and his new family, however, used the lodge about half the time.  The court concluded that the use of the company-provided lodge was a form of “income” and included the value of the use of the lodge as part of his income when determining child support.

In other cases the parent paying child support will find a supporter or a support network that will permit the obligor to give up working for a living.  With no income, it can seem that there is no way to collect.  But even "gifts" from supporters are considered "income."  In re:  Marriage of Rogers, 213 Ill.2d 129, 289 Ill.Dec. 610, 820 N.E.2d 386 (2004).  The way these matters are supposed to be handled is that all income -- including all gifts -- is to be included in "net income" and then, if warranted, the court may deviate from the statutory guideline percentage under 750 ILCS 5/505(a)(2) based on the uncertainty of future gifts.

Imputing Income in Maintenance Cases:  The court is to consider the income a spouse is able to earn, not merely the income a spouse is willing to earn.

In re:  Marriage of Blume, 2016 IL App (3d) 140276.  Brad and Tami Blume married in 1995, had a child in 1996, and divorced in 2012.  Brad was a farmhand earning $42,000 and the family lived rent-free in a home owned by Brad's employer.  Brad also ran his own farming operation in 2009 and 2010, earning between $70 - $80,000 each year.  He stopped doing that, however, when it came time to plant crops in April, 2011 -- Tami had filed for divorce April 18, 2011.  What a coincidence.

Brad argued that farming varied from year to year, 2012 was a notoriously bad year for Illinois farmers, and his future earning abilities were speculative.  He claimed the court should look only at his $42,000 / year (netting about $2,600 / month) wages.  Tami said Brad could do the farming but was purposely driving down his income to minimize his maintenance obligation.  The court sided with Tami, making specific findings that:

• Brad admitted to making ‘absolutely no effort to begin farming again, refused to commit to any future plans, and gave no credible reason for his failure to attempt to farm;’

• during his period of not farming, Brad relied on his parents for the purchase of a car and new appliances and failed to overcome the presumption of “gifts” for those purchases – in other words, it looked like he wasn’t making enough to get by, could have farmed but didn’t, and instead relied on his parents to make ends meet; and

• “Brad’s decision to quit independently farming was voluntary . . . .”

The trial court imputed the farming income to Brad, and set maintenance at $2,000 / month.  Brad appealed.

The Third District Appellate Court affirmed, saying:

The ability of the maintenance-paying spouse to contribute to the other spouse's support can be properly determined by considering both a current and future ability to pay ongoing maintenance.  In re:  Marriage of Lichtenauer, 408 Ill.App.3d 1075, 1089 (3d Dist., 2011).  Courts should consider the level at which the spouse is able to contribute, not merely the level at which he is willing to work.  Id. at 1088.  For the purpose of imputing income, a court must find one of the following:  (1) the payor has become voluntarily unemployed, (2) the payor is attempting to evade a support obligation, or (3) the payor has unreasonably failed to take advantage of an employment opportunity.

In re:  Marriage of Blume, 2016 IL App (3d) 140276 at 30.