Earning Capacity
The court is not limited to looking only at a parent’s actual income when calculating child support. In cases where a parent becomes unemployed or underemployed the court may substitute that parent’s “actual income” with their “earning capacity.”
Ability & Opportunity to Work
Family Code Section 4058(b) allows the court to consider a parent’s earning capacity when calculating child support if doing so is consistent with the child’s best interest. Accordingly, to prevent parents from reducing their income to pay less child support the courts will replace actual income with earning capacity if the parent has the ability and opportunity to work.
- Ability to work: the court will consider the allegedly unemployed or underemployed parent’s age, skills, occupation, health, and work experience.
- Opportunity to work: the party seeking an imputation of earning capacity must show with tangible evidence that the unemployed/underemployed parent has a reasonable likelihood, with reasonable effort, to apply their skills, education and training to produce income via employment or self-employment.
Reasonable Work Schedule
Fortunately for the allegedly unemployed/underemployed parent the court will normally base earning capacity upon a reasonable work schedule, not an onerous work regiment. However, if the profession normally requires overtime, such as in the case of medical doctors, overtime may be part of a “reasonable” work schedule and thus part of a parent’s earning capacity.