All Sources of Income Included in Child Support Calculation

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It’s important to remember that when calculating the amount of child support to be paid, you must include income from all sources, including bonuses, commissions and the more unusual income that an employee can derive from restricted stock options and other unique kinds of compensation for employment. On January 22, 2016, the Appeals Court in Hoegen v.Hoegen, put a finer point on this concept by including income derived from assets that had been waived by a parent as part of the divorce asset division.  In other words, even if an ex-spouse waived her right to receive a share of the other spouse’s restricted stock units, she can still include the taxable income spun from that same asset when calculating child support.  The Appeals Court emphasized that, “It is clear that her waiver cannot operate to waive her children’s right to appropriate child support pursuant to the guidelines.”

For years it has been clear that parents may not bargain away their children’s right to support from either one of them.  Therefore, the fact that the mother in Hoegen chose not to take an asset when she divorced does not mean that her children are precluded from including the income derived from that same asset as part of their child support calculation; even though that child support is paid to the mother on their behalf.     Furthermore, the Court has the authority to consider a retroactive increase of child support from the date the complaint to modify child support was served to the other parent until the date of the court ordered increase.

Therefore, to avoid unnecessary delay and legal expense, it is important to include income from all sources, including previously divided or excluded divorce assets, when determining the amount of child support.

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