Robert B. Relph Child Custody Law Blog on Lawyers.com

The practice of imputation or use of potential income is covered by the Michigan Child Support Formula.  One kind of imputation is where the court assumes the income is actually greater than what is reported by the party, such as income which is in-kind or comes from perquisites, cash or investment income, etc.  Another kind of imputation of income is where the court believes the evidence of income, but believes the party has a higher capacity or unexercised ability to earn, leading the court to impute income or find the ability to earn gives the basis to include potential income. 

In cases analyzing earning capacity and the actual ability to earn, attorneys and the court must conduct an analysis of “unexercised ability.”  Factors for consideration of this issue are found in the 2008 Michigan Child Support Formula and are as follows:

1.         Work history (think three year average per guidelines), reasons for termination;

2.         Educational level, special skills:
-  need to work to educational level including occupational level
-  consider vocational expert;

3.         Physical and mental condition of the party;

4.         Availability for work;

5.         Availability for opportunities;

6.         Prevailing wage rate: 
-  what is relevant job market
-  is one required to move
-  how do factors re: transportation get figured in;

7.         Diligence in seeking work;

8.         Evidence that parent in question is able to earn potential income;

9.         Personal history and present status;

10.       Presence of children in the home (cost of working considering transportation, day care, etc.);

11.       Whether there has been a significant reduction in income compared to the period preceding the filing of the complaint or child support analysis.

Attorneys and the court need to determine if the employee’s act is voluntary, i.e., could that parent have reasonably prevented the reduction in job, hours or salary.  A determination will have to be made whether there is a discharge “for cause” (voluntary or willful act) or a discharge for “no cause”, (simply laid off for lack of work, etc.).  In resignation cases, the analysis must look to the factual underpinnings of these resignations, i.e., a company may call a separation a resignation, but in reality it may not be voluntary.

All of the above indicates that imputation or potential income are complicated issues requiring the careful analysis of an experienced divorce attorney.  Therefore, the employment of a well qualified and significantly experienced Grand Rapids divorce lawyer or attorney in your area is essential to make sure this issue is competently handled.

More information on the Michigan Child Support Formula.