Child Support

Earnings Capacity Is Assessed At Higher Than Actual Income For Child Support

In the child support, family law case of Schmidt v. Schmidt, PICS Case No. 15-0814 (Pa. Super. May 21, 2015), the Honorable Paula Francisco Ott, writing on behalf of the Pennsylvania Superior Court, ruled that the trial court did not err or abuse its discretion in assigning father an earnings capacity higher than his actual income where he had a history of making significantly more money and there was no evidence that he was obligated to remain at his current position.

The parties are the parents of three minor children. Father has education, training and work experience in the field of intelligence and now resides in California, while mother is a stay-at-home mom. In March 2014, mother filed a petition for modification of an existing support order.

Father had been working on a contract job with L3 Communications, which job was set to expire. His prior salary was $115,000 per year. Rather than become unemployed, father chose to obtain employment at a lower wage. His current employment is with the Federal Bureau of Prisons, where he earns $58,841 per year plus a recruitment allowance of $8,100.

Father had not made less than $100,000 per year in the past 15 years. The trial court modified an existing support order by setting father’s earning capacity at $91,000 and determining that father’s support obligation would be $2,690 per month.

On appeal, father argued that the trial court abused its discretion and/or erred as a matter of law in assigning him an earning capacity of $91,000, as this was both punitive and unrealistic in the light of current economic conditions. Thus, the parties’ respective child support obligations should be recalculated using father’s actual income.

The Superior Court explained that a change in circumstance is considered substantial so as to warrant a modification when the change is “either irreversible or indefinite.” Father challenged the decision to assign him an earning capacity approximately $24,000 higher than his projected income for 2014.

According to father, his contract with L3 Communications came to an end just as the war in Afghanistan and Iraq ended, and such wartime contracts were no longer available. Father explained that he needed to find employment and obtained his current position because the jobs for which he was qualified had dwindled since the war came to an end.

The court commended father’s decision to accept a job at a lower wage in order to avoid unemployment, but found no abuse of discretion by the trial court in setting father’s support obligation.

The court recognized that father’s assigned earning capacity was greater than his actual income. However, there was no evidence on record as to whether father was required to remain in his current position for a certain length of time based upon receiving a recruitment bonus.

Moreover, there was less than six months between when father’s new income became effective and the date of the de novo hearing. Father did not demonstrate that he could not sustain the earning capacity attributed to him. The court noted that if father was ultimately unable to replace his present salary with one consistent with his assigned earning capacity, he would be able to request modification of the support order. Accordingly, the court affirmed.

Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 38 PLW 517 (June 2, 2015)

Filed Under: Child Support, Family Law: Income Assessment; Earning Capacity

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