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Child SupportCourt Imputes Income to Calculate Child Support

July 30, 2007

This is a common scenario – you are seeking a court order for child support, but the non-custodial parent is claiming an annual income far less than you suspect he/she actually earns.

One way to prove that a party’s actual income is higher than his/her reported income is to illustrate how his/her reported lifestyle could not be supported by the reported income.

The Appellate Division in Strella v. Ferro ruled that: in calculating a party’s child support obligation, the court "need not rely upon the party’s own account of his or her finances, but may impute income based upon the party’s past income or demonstrated earning potential.”

In that case, the father claimed that he had been unemployed and only recently begun to earn $500 per week despite having recently earned as much as $101,000 per year. The Court imputed an income of $96,000 to the father. In doing so, the Appellate Court noted that:

Here, the father’s claimed annual household expenses were approximately double his claimed annual income in 2004 and 2005. Additionally, his financial data did not indicate that he used money from his savings or that he incurred greater debt to pay the remaining amount of his annual expenses not covered by his average annual income. During the relevant period, he did not liquidate any of his investments, he had no outstanding balance on his home equity line of credit, and his credit card statements showed no unpaid balances of a size and nature to correspond to his household expenses.

Clearly, in the absence of incurring debt or drawing down on savings, if the party’s expenses exceed his/her reported income, then the reported income must be under-reported. In such a case, the Court should look beyond the filed tax return to calculate the child support obligation

The information contained in this website has been provided for general informational purposes only and DOES NOT constitute legal advice; there is no warranty on this information and it does not in any way constitute an attorney-client relationship. Prior results do not guarantee a similar outcome. All individuals are encouraged to seek independent counsel for advice regarding their specific situation and facts. 


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