“To impute” something means that you ascribe, assign or estimate a value to something by inference.
In legal parlance, to “impute income” means to ascribe, assign or estimate income to someone by inference.
For purposes of support in family law, income is attributed to a party for purposes of determining the amount of support that he or she should receive or should pay, regardless of whether or not they are actually earning that amount.
A family court can impute income to a party whether the issue in question is the amount of child support or spousal support. In this case, the liability for support, or the amount of support that a party is entitled to receive, is based not on the actual income they earn but on their earning capacity.
When is there an imputation of income?
Imputing income to a party may seem, at first glance, to be unjust because you are ascribing monetary obligations to a party regardless of the amount of money they are actually earning. But the very reason that courts have the ability to impute income, and family law attorneys seek the imputation of income, is in order to prevent injustice.
So, imputation of income in spousal support cases can happen in any of the following instances:
- When a supported spouse intentionally refuses to work to support himself or herself, or intentionally works at a low-paying job, in order to keep receiving a large amount of support from the ex-spouse;
- When the supporting party intentionally refuses to work or works at a lower-paying job, in order to avoid or minimize the amount of alimony he or she is obligated to pay to the ex-spouse
This is obviously a pretty contentious issue because there may be a lot of factors involved in why a party does not work or chooses to work at a low-paying job. And those reasons may not have anything to do with the intent to avoid their legal obligations.
In addition, just because a party could work at a higher-paying job does not mean that he or she can. Perhaps the job market is very competitive or the opportunities are limited. Perhaps the party has other family responsibilities that necessitate him cutting down on his hours of work.
Case Law on Determining Earning Capacity
There are a number of cases in which California courts have looked at the circumstances of the parties in order to determine whether or not income should be imputed. Courts have set forth a two-prong test that can serve as a guide on whether or not there should be an imputation of income:
- the party’s ability to work; and
- the party’s opportunity to work
Ability To Work
The first, or the party’s ability to work considers factors such as the party’s health, education, background, qualifications, skills, and work experience. If a person is in poor health, for instance, that necessitates him cutting his work hours or stopping work altogether, then it is not reasonable to impute income to him for income that he could have earned.
Opportunity to Work
On the other hand, the opportunity to work takes into consideration the environmental factors that could determine the reasonable likelihood that a person could work, with reasonable effort, at a job that pays a certain amount of income. Interestingly, a California court once found that job openings in the classified ads of a newspaper constituted sufficient evidence of a party’s reasonable opportunity to work.
Courts have further held that the determination of earning capacity for purposes of imputing income should be based on a reasonable work regimen, not an extraordinary one. So, where one spouse worked an extraordinary number of hours during the marriage does not mean that he or she is expected to keep working those same hours. Similarly, a party’s earning capacity should not be based on an onerous work schedule.