Thursday, June 06, 2013

Determining what is Income for the Purpose of Calculating Child Support in Maryland

In order to calculate child support in Maryland one must first determine the amount of income of the party paying support. To determine what is income one must look to MD 12-201 of the Family Law Code.
This says:
Actual income
  • (b)(1) “Actual income” means income from any source.
  • (2) For income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation, “actual income” means gross receipts minus ordinary and necessary expenses required to produce income.
  • (3) “Actual income” includes:
    • (i) salaries;
    • (ii) wages;
    • (iii) commissions;
    • (iv) bonuses;
    • (v) dividend income;
    • (vi) pension income;
    • (vii) interest income;
    • (viii) trust income;
    • (ix) annuity income;
    • (x) Social Security benefits;
    • (xi) workers' compensation benefits;
    • (xii) unemployment insurance benefits;
    • (xiii) disability insurance benefits;
    • (xiv) for the obligor, any third party payment paid to or for a minor child as a result of the obligor's disability, retirement, or other compensable claim;
    • (xv) alimony or maintenance received; and
    • (xvi) expense reimbursements or in-kind payments received by a parent in the course of employment, self-employment, or operation of a business to the extent the reimbursements or payments reduce the parent's personal living expenses.
  • (4) Based on the circumstances of the case, the court may consider the following items as actual income:
    • (i) severance pay;
    • (ii) capital gains;
    • (iii) gifts; or
    • (iv) prizes.
  • (5) “Actual income” does not include benefits received from means-tested public assistance programs, including temporary cash assistance, Supplemental Security Income, food stamps, and transitional emergency, medical, and housing assistance.
Income
  • (h) “Income” means:
    • (1) actual income of a parent, if the parent is employed to full capacity; or
    • (2) potential income of a parent, if the parent is voluntarily impoverished.
Potential income
  • (l) “Potential income” means income attributed to a parent determined by the parent's employment potential and probable earnings level based on, but not limited to, recent work history, occupational qualifications, prevailing job opportunities, and earnings levels in the community.
From this definition of income money made from working overtime could be determined to be income however this would be determined based on the courts discretion, which would look to the amount of overtime worked and how readily overtime is available to the party. Income can also be based on continuing payments such as grants for education, unemployment benefits, disability payments, etc. If a party who is ordered to pay child support is not currently employed the court can impute an income on that is determined based on the factors outlined in 12-201(l).


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