A Reduction in Wages Does Not Always Mean A Reduction In Child Support

In a recent family law case, the Court of Appeal found for purposes a child support modification, the supporting parent's decline in employment income did not justify reducing the monthly payment from $17,500 to $9,842; in light of the supporting parent's overall wealth, including liquid sets of over $34 million, the reduction in income did not materially impair ability to pay under Fam. Code 4053.

The spouse paying support petitioned the court to reduce his child support obligation due to a decrease in his wages. The court ordered the reduction despite the father’s overall wealth.  The Court of Appeal concluded that this was an abuse of discretion, stating: “We conclude that substantial evidence did not support the trial court’s finding of a material change in respondent’s circumstances for purposes of meeting his child support obligation. Specifically, we conclude that in light of respondent’s overall wealth, the reduction in his employment income did not materially impair his ability to pay the agreed upon child support.”  The case is In re Marriage of Usher, 6 Cal. App. 5th 347 (Cal. App. 2d Dist. 2016)

Takeaway:

This is an unusual fact pattern in that the supporting parent is super wealthy.  In most cases the complex formula of Fam. Code, § 4055—a formula that relies heavily on the parents' monthly disposable income—is presumed correct.  Generally, even upper middle-class parents can rely on the formula.

In this case, the supporting parent enjoys a lifestyle that far exceeds that of the custodial parent, child support must to some degree reflect the more opulent lifestyle even though this may, as a practical matter, produce a benefit for the custodial parent. The complex statutory formula used to calculate guideline child support relies heavily on parental income and net monthly disposable income. (Fam. Code, § 4055). The guideline is presumed to be the correct amount, but the presumption may be rebutted by admissible evidence showing that application of the formula would be unjust or inappropriate under the principles set forth in Fam. Code, 4053. Fam. Code, § 4057, subd. (b). The Legislature did not intend trial courts to limit their focus simply to parental income, whether from salary, return on investment, or any other particular source.

More on the subject:

The articles linked explain exactly how California courts determine spousal support and child support payments.


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