Posts Tagged ‘Child Support’

California Divorce Blog–Alcoholism and the Alcoholic

December 2, 2014

Addiction issues are often the root cause of divorce. When a person is addicted to a substance they are not the same person. Unfortunately, this causes the entire family to suffer.  If you are an alcoholic, or are married to an alcoholic, you should be aware of the potential impact upon your divorce case.

The Court may consider the history of drug abuse when determining Child Custody.  In determining the child’s best interest, trial courts also must consider either parent’s “habitual or continual” alcohol abuse, their “habitual or continual” illegal use of controlled substances, or their “habitual or continual” abuse of prescribed controlled substances (as defined in California Health & Safety Code Section 11000 et seq.; See California Family Code Section 3011(d)).

Before considering allegations of a parent’s drug oralcohol abuse, the court may require “independent corroboration”—such as written reports from law enforcement agencies, courts, probation departments, social welfare agencies, medical and rehabilitation facilities, or other organizations providing drug and alcohol abuse services. (See California Family Code Section 3011(d)).

Under strict statutory conditions, the court may order any person seeking custody or visitation to undergo testing for the use of illegal controlled substances (as defined in California Health & Safety Code Section 11000 et seq.) or alcohol; and may order either or both parties to pay the costs of such testing. (California Family Code Section 3041.5)
(The statutory conditions are intended to address the constitutional concerns noted in prior case law that interpreted the then-existing Family Code as not authorizing compelled drug/alcohol testing in custody litigation (Wainwright v. Super.Ct. (Sinkler) (2000) 84 CA4th 262, 266-269, 100 CR2d 749, 752-754). 
If alcoholism or addiction issues are present in your Divorce case, it is important to seek immediate legal representation. The alcoholism may significantly impact the issue of child custody, child support and/or spousal support.  Please call Attorney Keith F. Simpson today to further discuss your legal matter at (310) 297-9090. You may also e-mail Keith Simpson at http://www.simpsonlaw.net. Thank you for reading this blog.
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California Divorce Blog–Child Support and Spousal Support

November 30, 2014

I find that the most commonly litigated issues relate to child support and spousal support. This is somewhat understandable. A recent case sheds some light on the aspect of “Imputing Income” to a non-working spouse or a spouse who is chronically underemployed.

In Charles McHugh v. Connie McHugh from the Fourth Appellate District from the State of California, Court of Appeal (Certified for publication on November 26, 2014), Mr. McHugh filed a motion to reduce his child support obligation because he lost his job as a commissioned salesman. In opposition, Ms. McHugh asked the court to increase his child support because Mr. McHugh lost his job for diverting business to his Father’s business. The employer had offered Mr. McHugh an opportunity to retain his job if he disclosed his misconduct and fully repaid restitution. The Trial Court denied Mr. McHugh’s request to reduce his child support and granted Ms. McHugh’s request to impute income to Mr. McHugh as though he were earning the same income as before.

Family Code section 4058, subdivision (b), grants trial courts discretion to set child support based on a parent’s earning capacity rather than actual income if the court finds the parent has the ability and opportunity to earn income at the level to be imputed. The court provided,”We affirm the trial court’s order exercising its discretion to impute income under section 4058, subdivision (b), because substantial evidence supports the findings that (1) Charles had the ability and opportunity to keep his job; (2) his termination was a voluntary divestiture of resources required for child support obligations because of his misconduct in diverting business to his father’s company to avoid his support obligations and deliberately failing to satisfy his employer’s conditions for keeping his higher paying job; and (3) imputing income to Charles was in the child’s best interests.”

The Family Code has granted the trial court discretion when imputing income to a parent based on his or her “earning capacity.” (§ 4058, subd. (b).) Specifically, section 4058, subdivision (b) states, “The court may, in its discretion, consider the earning capacity of a parent in lieu of the parent’s income, consistent with the best interests of the children.”

As the moving party seeking to modify the existing support order, Charles bore the burden to show not only that he lost his Amcor job, but also that he lacked the ability and opportunity to keep that job and continue earning at the same level. (Bardzik, supra, 165 Cal.App.4th at p. 1304; Eggers, supra, 131 Cal.App.4th at p. 701.) Here, it is undisputed Amcor fired Charles, but it also is undisputed Amcor gave Charles the opportunity to keep his job if he satisfied three conditions: (1) fully disclosing all information about his improper conduct; (2) paying Amcor restitution for the business he diverted; and (3) entering into a last chance employment agreement with Amcor. Accordingly, to obtain an order reducing his support obligations it was Charles’s burden to present evidence showing he could not satisfy these conditions, and therefore did not have the opportunity to keep his job.

We can all learn important lessons from this case when it comes to seeking a modification of support. First, people do not realize when they seek a support modification that it is possible for the court to modify in the other direction. For example, a party seeking to modify support downward may be surprised to have the court modify the support upward.  Second, a party seeking a downward modification due to job loss must show that there was no possibility of retaining the job. Third, the court can impute income because California Family Code Section 4058 allows for the Court to set Child Support based upon a party’s earning capacity as opposed to actual income. Many people are surprised to learn this.

If you have any questions regarding Child Support, Spousal Support or Family Law, please call Attorney Keith F. Simpson today at (310) 297-9090. The Law Offices of Keith F. Simpson, A Professional Corporation, is a full service family law firm located in Manhattan Beach, California. You may also view the website http://www.simpsonlaw.net to contact Attorney Keith F. Simpson today!

California Divorce Blog–Child Support, Spousal Support, Taxes and Wage Withholding

August 4, 2012

I am often asked how payment of Child Support and Spousal Support impact taxes.  Simply stated, Child Support is not tax deductible to the person paying Child Support. Therefore, the person receiving the Child Support is not taxed on the money received for Child Support. The reason for this is that Child Support is not considered to be income.

Spousal Support is considered to be income for tax purposes. Therefore, the person paying Spousal Support receives a tax deduction for the amount paid as Spousal Support. Similarly, the person receiving Spousal Support is taxed on the amount of Spousal Support paid because the Spousal Support is considered to be income.

I am also asked about how an employer is supposed to withhold child support or spousal support from an employee paycheck.  Before an employer deducts money from an employee’s paycheck for support, the employer must first determine the Employee’s “Disposable Income”.

How to Determine Disposable Income

There are two basic steps to determine how much to withhold for child support from an employee’s income: calculating disposable income and calculating allowable disposable income.

  1. Disposable Income = gross pay – mandatory deductions
    • Disposable income is the amount of earnings remaining after subtracting mandatory deductions from an employee’s gross pay.
    • Mandatory deductions include federal, state and local taxes, unemployment insurance, workers compensation insurance, state employee retirement deductions, and other deductions determined by state law.
    • Note that disposable income is not necessarily the same as net pay. An employee may have a deduction taken from his pay that is not mandatory, such as union dues or a credit union car loan payment, or some other voluntary allotment.
  2. Allowable Disposable Income = disposable income x CCPA % limit
    • Allowable disposable income is the maximum available for child support withholding. The ordered child support amount will usually be less than the allowable disposable amount and then the ordered amount maybe withheld in full. Even if the withholding order specifies a higher payment, the allowable disposable income is the most that may be withheld.
    • The Federal Consumer Credit Protection Act (CCPA) sets limits on withholding from an employee-parent’s disposable income based on his/her current family situation and child support payment history. The CCPA protects the employee from having an excessive amount withheld. (Some states have enacted laws that provide even more protection to the employee-parent’s income, although most states follow the federal limits.)
    • The withholding limits set by the federal CCPA are as follows:
      • 50% Supports a second family, with no arrears or < 12 weeks in arrears
      • 55% Supports a second family, and more than 12 weeks in arrears
      • 60% Single, with no arrears or < 12 weeks in arrears
      • 65% Single, and is more than 12 weeks in arrears.

Allowable Disposable Income Example

  • Weekly gross pay is $760
  • Weekly child support due is $295
  • Mandatory deductions total $151
  • Employee-parent is single and does not owe back child support

Note the following differences between net pay and disposable income in this example. The amount of disposable income, $609.00, is used to determine child support withholding limits, rather than the net pay, $469.

 

Disposable Income Net Pay
Gross Pay $ 760.00 $ 760.00
Deductions Less mandatory deductions only Less deductions
Federal income tax – 95.00 – 95.00
FICA – 45.00 – 45.00
Medicare – 11.00 – 11.00
Union dues – 10.00
Savings bonds – 25.00
Union pension – 30.00
Credit union car loan – 50.00
$ 609.00 $ 469.00

 

Step 1:
Gross pay – mandatory deductions = disposable income:
$760 – $151 = $609.00
Step 2:
Disposable income x CCPA % limit = allowable disposable income:
$609 x 60% = $365.40

Note that 60% is the applicable CCPA limit because the employee-parent is not supporting a second family and does not owe any back child support.
Allowable disposable income is the maximum available for child support withholding.
Allowable disposable income (from Step 2 above) is 365.40.

  • $365.40 > $295.00, so the full $295 is withheld for child support.

If you take the same example but increase the weekly child support payment to $400, you may not withhold the full amount due. By law, you may only withhold a maximum of $365.40. This means that the employee will fall behind by $34.60, and will be “in arrears.” Some states charge interest on the overdue amounts. The employee has the option of paying the underpaid amount directly to the issuing agency if he or she does not want to fall into arrears, or the employee may ask that the employer “voluntarily” withhold the unpaid amount.

Application of the Requirement

If there is enough allowable disposable income, the employer should remit the full amount of current support due for each order. Sometimes an employee’s earnings do not stretch far enough to pay all of his or her orders. If there is not enough allowable disposable income, the allocation method of the employee’s principal place of employment (state of official duty station) must be followed to determine how much to pay for each order. States use one of two methods to allocate withheld payments among multiple withholding orders:

  1. Prorate by allocating a percentage to each order based on the total dollar amount of current support ordered; or
  2. Share equally by dividing the allowable disposable income by the total number of orders.

Multiple Income Withholding Orders – Same Employee and Different Children

If there is more than one withholding order, federal regulations require that some money must be paid to each order for current support. In addition, states have enacted laws specifying the method for allocating money toward current support due for each order. Thus, some money must be allocated toward all orders. The orders should not be paid on a “first come, first served” basis.

Example:

  • Order A current support owed: $ 220/biweekly
    Arrears owed: $ 50/biweekly
  • Order B current support owed: $ 200/biweekly
  • Order C current support owed: $ 180/biweekly
  • Employee’s disposable income: $1000/biweekly
  • Allowable disposable income: $550

Because employee is supporting more than one family and is in arrears, the CCPA limit is 55% x disposable income (55% x $1000 = $550)

Withholding:

  • Total current support owed: $600/biweekly
  • Total arrears owed: $ 50/biweekly
  • There is not enough allowable disposable income ($550) to withhold the entire amount of current support due for all these orders ($600). Therefore, nothing may be withheld to satisfy the arrearage.

The issue of withholding Child Support and Spousal Support can be a tricky issue whether you are a party to a legal action or an employer tasked with the legal duty to withhold the proper amount of support. Please contact Attorney Keith F. Simpson today to discuss your legal issue at (310) 297-9090 or visit http://www.simpsonlaw.net to view more information.

California Divorce Blog–Unpaid Child Support

May 21, 2011

I often receive questions from people about unpaid child support.  Can I still collect on unpaid child support? Does interest accrue on unpaid child support?  The answers to both of these questions are yes.

California law provides that a child support judgment is enforceable until paid in full or otherwise satisfied—even after the child reaches age 18. This includes interest and penalties computed thereon. (California Family Code Sections 291(a) and 4503).  See also Marriage of Hamer (2000) 81CA4th 712, 718, 97 CR2d 195, 199.

Regarding child support arrearages (unpaid child support), like all money judgments, California child support orders accrue post judgment interest at the legal rate of 10% per annum.  Unless the judgment provides otherwise, the interest accrues as to each installment when each installment becomes due and continues to accrue for so long as the arrearage remains unpaid. See California Constitution Article XV, Section 1; California Codes of Civil Procedure Sections 685.010(a), (b), 685.020(b); Marriage of Hubner (2004) 124 CA4th 1082, 1089, 22 CR3d 549, 553-554.  Since the interest on arrears accrues and is payable as a matter of law, trial courts are without authority to waive or forgive interest accrued on past-due child support amounts, just as courts cannot retroactively modify or terminate the arrearages themselves. See Marriage of Hubner (herein); Marriage of Robinson (1998) 65 CA4th 93, 98, 76 CR2d 134, 137; Marriage of McClellan (2005) 130 CA4th 247, 259, 30 CR3d 5, 14-15.

If you have a valid order or judgment for the payment of Child support in California, you have the right to demand payment and enforce the judgment. There are many ways to enforce a child support order (this will be a discussion for another time).  If the parent who is ordered to pay child support refuses to pay, it is important that you see an attorney immediately to discuss your rights and possible remedies. Please contact Attorney Keith F. Simpson at (310) 297-9090 to discuss your child support issues today!

The Law Offices of Keith F. Simpson, A Professional Corporation, is located at 1230 Rosecrans Avenue, Suite 170, Manhattan Beach, California 90266.  You may also review the website at http://www.simpsonlaw.net or call Keith Simpson to schedule an appointment.

California Divorce Blog–Child Support

February 15, 2011

In California Child Support is money paid from one parent to the other parent to assist with the expenses associated with child rearing.  The California Family Code refers to child support as a support obligation owing on behalf of a child.  (California Family Code Section 17402)  Generally speaking, California law required both parents to support their minor children “in the manner suitable to the child’s circumstances.” (California Family Code Section 3900)

All minor children of the parents are owed a duty of child support.  The obligation to support a child is not limited to the parents’ marital status nor is it limited to biological offspring!  (California Family Code Section 7602; White v. Marciano (1987) 190 CA3d 1026, 1031, 235 CR 779, 782)

Once the issue of parentage is determined, the court will move to decide the issue of child support.  A finding of parentage occurs when the court makes a finding as to who are the child’s legal parents.  In California, courts will use a program called Dissomaster which is a computer program.  The judge will input data into the Dissomaster program to determine the amount of child support one parent will be ordered to pay the other parent.  The types of data include 1) the amount of custody each parent has 2) the respective incomes 3) the monthly expenses 4)hardship expenses 5) multiple other expenses and data.  The Dissomaster will provide a child support number which the court will usually accept and order the supporting parent to pay the non supporting parent.

The guideline formula for computing child support is provided algebraically as follows:  CS = K [HN -(H%) (TN)] (See California Family Code Section 4055(a)).

CS equals Child Support;

K equals the amount of income to be allocated for child support as set forth in Family Code Section 4055(b)(3);

HN equals high earner’s net monthly disposable income;

H% equals approximate percentage of time high earner has or will have primary physical responsibility for the children compared to the other parent (where the parents have different time-sharing arrangements for different children, H% equals the average of the approximate percentages of time the high earner spends with each child);

TN equals total net monthly disposable income of both parties. (See California Family Code Section 4055(b)(1).

Child support, unlike spousal support, is not tax deductible to the paying spouse.  Furthermore, child support is not taxable as income to the parent receiving the child support.  It is important to have your attorney request child support payments at the outset of your divorce case if you are eligible to receive child support.  The issue of child support is a complex matter and should be discussed with your attorney.  For further questions, please contact Attorney Keith F. Simpson today at 310-297-9090 or read more about California divorce and family law at his websites http://www.simpsonlaw.net or http://www.caldivorce.net

Keith F. Simpson is a Manhattan Beach, California lawyer who practices law throughout the State of California. Call Attorney Keith F. Simpson today with your child support or divorce question.

California Divorce Blog–Child Custody

October 2, 2010

The one issue in divorce cases which has the potential to make any case become extremely litigious and emotional is the issue of child custody. The breakup of a marriage is usually difficult enough. Try deciding who the children will live with and how often!!

Unfortunately, children often become pawns in a chess match when discussing child custody. For example, one spouse may be angry with the other spouse because of an affair. This spouse may attempt to extract revenge by not allowing the other spouse time with the children. There is a saying that in Criminal Law, you find bad people acting their best in court. In Family Law, you find good people acting their worst in court.

So what is the law regarding child custody? Who decides who will have the children? In California, family law cases are decided by a Judge or Commissioner. There are no jury trials in California Family Law Courts.

California law provides that it is in the public policy of the State to ensure minor children frequent and continuing contact with both parents after their separation or dissolution except when that contact would not be in the child’s best interest. California Family Code Section 3011 sets forth factors which indicate when it is not in the child’s best interest. If there is a question as to whether the issue of frequent and continuing contact conflicts with the health, safety and welfare of the child then the court will typically side with the child’s safety and fashion a visitation order to ensure the child is safe.

Parents often make the mistake of assuming that child custody is awarded according to what is in their best interest. This is not the case. Custody orders are often inconvenient for parents and that is because the orders are made according to what is in the child’s best interest.

If you have any questions about child custody issues please do not hesitate to contact the Law Offices of Keith F. Simpson, A Professional Corporation, to discuss your case today. Attorney Keith Simpson is located in Manhattan Beach, California. Attorney Keith Simpson writes this California Divorce Blog and practices Family Law in Manhattan Beach, California.

California Divorce Blog (Spousal Support Options)

September 18, 2010

Recently it seems that many of my cases involve Spousal Support (formerly known as “alimony”). In fact, many cases seem to hinge on the issue of spousal support. I mean that all other issues can be resolved with the exception of spousal support. Spousal support can be, and often is, an emotional issue. Think about it. One spouse is faced with the prospect of breaking up a “lifetime partnership” with the other spouse but may be on the hook for paying spousal support for Life! This can often be difficult to imagine but a reality nonetheless.

So what is spousal support? Spousal support is a court order for one spouse to pay any amount necessary for the financial support of the other spouse (See California Family Code Section 4320). The Court may make temporary spousal support orders from the time the Divorce lawsuit is filed. At time of trial the Court may make permanent (lifetime) spousal support orders. This means that one spouse may be ordered to pay the other spouse support for the remainder of his or her life! There are many factors which the Court will consider when determining the amount of spousal support and the duration. A rule of thumb is the longer the marriage, the more likely the Court will order lifetime spousal support. Any marriage with a duration of ten years has been held to be a “long term marriage” and therefore makes is more likely that a court may order lifetime spousal support.

There are many methods to resolve the issue of spousal support. Typically, the spouse who is the higher income earner will be the spouse who is ordered to pay spousal support. Some options for resolving spousal support are as follows: 1) Agree upon a monthly spousal support amount for the remainder of the supported spouse’s life (or until the supported person remarries or the paying spouse dies). 2) Agree upon a monthly spousal support amount for a defined period (i.e., pay spousal support for five years). 3) Pay a one time lump sum spousal support payment. This option can be a double edged sword and may be a gamble. For the paying spouse, the gamble is that they are betting that by paying a one time lump sum payment the total sum will be less than if they paid a monthly amount for life. If the supported spouse immediately remarries or passes away then the paying spouse will have vastly overpaid the amount of spousal support necessary. The same is true of the supported spouse (i.e., the risk of taking a one time lump sum payment as opposed to spreading monthly payments over a lifetime period). Who knows how long both spouses will live. What is the condition of their health? Does the supported spouse want to remarry in the near future? These are all questions which parties and their counsel should consider when evaluating the tricky and emotional issue of spousal support.

If you are facing difficult decisions regarding spousal support please call Attorney Keith F. Simpson today to discuss at (310) 297-9090. Thank you for reading my California Family Law Blog!

California Divorce Blog (Divorce Options)

September 17, 2010

Welcome to the first blog posting from attorney Keith F. Simpson of the Law Offices of Keith F. Simpson, A Professional Corporation.  Today I am going to write about options available to a person who has decided to file for divorce (also known as marital dissolution).

In California, a person has the option of filing a petition with the Superior Court of California for 1) Marital Dissolution (Divorce) 2) Legal Separation or 3) Nullity.

In California, a person may obtain a judgment of Marital Dissolution or Legal Separation on the following grounds: (a) Irreconcilable differences that have caused the irremediable breakdown of the marriage; or (b) incurable insanity.  The vast majority of parties filing for divorce choose the former “Irreconcilable differences” as the alleged reason for filing for a judgment of Marital Dissolution.  The Court typically makes a finding to the effect that the Irreconcilable differences have led to the “irremediable” breakdown of the marriage.  In my experience Courts tend to liberally construe the term “irremediable” breakdown of the marriage and order a judgment of Marital Dissolution so long as it appears that their is no possibility of reconciliation.

You should be aware that California has a residency requirement which must be satisfied prior to a Court entering a judgment for marital dissolution.  At least one party must have been a resident in the State of California for six months and a resident in the County where the lawsuit was filed for at least three months prior to the Petition being filed with the Court.  In the event neither party can satisfy this residency requirement, the parties may file for a Legal Separation and later (presumably six months) amend the Petition to a filing for Divorce. This will allow a couple who recently moved to California to proceed with filing the lawsuit and obtaining a Divorce Judgment as soon as possible (6 months).

A Legal Separation, unlike Divorce, does require the consent of both parties (unless the respondent does not appear and a default is entered against the respondent).  Also, a judgment of Legal Separation does not terminate the parties’ marital status.  This will allow a spouse to remain on the other spouse’s health care insurance plan.  If a party obtains a Divorce, the other spouse is precluded from remaining on the other spouse’s health care plan. This is a very important consideration which all parties should consider prior to requesting judgment for Divorce.

Nullity is a completely different concept.  A judgment of Nullity may only be granted by a Court when a marriage is void or voidable for the following reasons: (a) incest (b) bigamy (c) a spouse was not an adult when married (d) spouse was erroneously thought to be deceased (e) fraud (f) unsound mind (g) force (h) physical incapacity.  There is no statutory residency requirement to file a petition for a Judgment of Nullity.  There is also no consent requirement between the parties.  Finally, a Judgment of Nullity acts to nullify the marriage (as if the marriage never occurred).

Thank you for reading my first blog entry.  Please do not hesitate to contact Attorney Keith F. Simpson to further discuss any family law questions you may have at (310) 297-9090. Please also view our website at http://www.simpsonlaw.net or http://www.califdivorce.info