Underemployed

When determining child support, courts determine whether people are working to their potential. Courts presume that a parent can be gainfully employed on a full-time basis. “Full Time” means 40 hours of work in a week except in those industries, trades, or professions in which most employers, due to custom, practice, or agreement, consider a normal work week to be some other number of hours. If a court finds that a person is not working full time or the person provides no proof of their income, the court will conclude that person is voluntarily underemployed and will set that person’s income at a level based on his or her Potential Income.   Exceptions That Overcome the Presumption A parent who is working less than full time can overcome (rebut) the presumption that he or she can be gainfully employed on a full-time basis by proving any one of the following exceptions:

1. The unemployment, underemployment, or employment on a less than full-time basis is temporary and will ultimately lead to an increase in income (such as going back to school to gain skills to qualify for a higher-paying job); or
2. The unemployment, underemployment, or employment on a less than full-time basis represents a bona fide career change that outweighs the adverse effect of that parent’s diminished income on the child; or
3. The unemployment, underemployment, or employment on a less than full-time basis is because a parent is physically or mentally incapacitated or due to incarceration, except where the reason for incarceration is the parent’s nonpayment of support; or
4. If the parent of a joint child is a recipient of a temporary assistance to a needy family (TANF) cash grant; or
5. If a parent stays at home to care for a child who is subject to the child support order, the court may consider the following factors when determining whether the parent is voluntarily unemployed, underemployed, or employed on a less than full-time basis:
   1. The parties’ parenting and child care arrangements before the child support action; and
   2. The stay-at- home parent’s employment history, recency of employment, earnings, and the availability of jobs within the community for an individual with the parent’s qualifications; and
   3. The relationship between the employment-related expenses, including, but not limited to, child care and transportation costs required for the parent to be employed, and the income the stay-at- home parent could receive from available jobs within the community for an individual with the parent’s qualifications; and
   4. The child’s age and health, including whether the child is physically or mentally disabled; and
   5. The availability of child care providers.
6. A self-employed parent is not considered to be voluntarily unemployed, underemployed, or employed on a less than full-time basis if that parent can show that the parent’s net self-employment income is lower because of economic conditions that are directly related to the source or sources of that parent’s income.

If a Person is Voluntarily Underemployed, How is Potential Income Determined? When a court concludes a person is voluntarily underemployed, for the purposes of determining child support, the courts will make a finding of “Potential Income.” The courts will determine Potential Income using one of the following three methods.

1. The parent’s probable earnings level based on employment potential, recent work history, and occupational qualifications in light of prevailing job opportunities and earnings levels in the community;
2. If a parent is receiving unemployment compensation or workers’ compensation, that parent’s income may be calculated using the actual amount of the unemployment compensation or workers’ compensation benefit received; or
3. The amount of income a parent could earn working 30 hours per week at 100 percent of the current federal or state minimum wage, whichever is higher.

If your case involves a serious question about whether you or your spouse is voluntarily underemployed, you should seek the advice of an experienced divorce attorney. This issue can have a large financial impact on the case and is a very complicated area of law, with case precedent that will be considered by the court.