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Court of Appeals of Indiana decides on voluntary underemployment in child support

On Behalf of | May 25, 2022 | Child Support

When parents separate, the state expects both parents to provide financially for their children. Indiana child support is set by certain state guidelines based on several factors, including the income of both parents. Indiana’s Child Support Guidelines do not just consider a person’s actual weekly income, but also their potential income if they are voluntarily unemployed or underemployed without just cause.

The purpose of this guideline is to prevent parents from purposefully avoiding their child support obligations by taking a lower-paying job than they could have. If they do, the law directs the courts to step in to figure out that parent’s earning capacity, and expects them to pay that amount based on several factors, including past pay, qualifications, education, health and earning levels in the community. In Walter v. Walter, the Court of Appeals of Indiana examines the case of one parent purposefully taking a job paying less than their earning capacity.

Was the husband voluntarily underemployed?

In the Walter case, the trial court found the following facts, which the appellate court accepts. The husband had been making over $200,000 per year for several years prior to the dissolution. He worked as a boom operator and supervisor in the pipeline industry, but the job required him to work in West Virginia for several months at a time. During that time, he threatened to become a “deadbeat” and a “bum” and not pay child support if the wife ever divorced him.

When the wife filed for divorce, the husband stopped working in the pipeline industry for 18 months and eventually took a job closer to home as a car salesman, making substantially less money. The husband testified that he was laid off from his pipeline job and had tried a few times to find another job in the industry, but was unsuccessful. He wanted to be closer to his children, so accepted the car sales job.

The court’s decision in Walter v. Walter

The trial court believed the wife’s testimony about the husband’s previous comments regarding being a “deadbeat” and gave little weight to the husband’s claims that he could not find a job in his industry. The trial court found that the husband was voluntarily underemployed under Indiana law, though it did not expect him to travel to West Virginia to find employment. It calculated his earning capacity using his previous salary.

The husband appealed and the Court of Appeals now finds that the trial court was correct in its voluntary underemployment finding. It disagrees on one facet, however, and that is regarding how to calculate the husband’s earning capacity. The Court of Appeals agrees that the husband should not have to travel to West Virginia to find a job, but states that the lower court must reconsider his earning capacity based on his job opportunities in the area.

What does the case tell us about voluntary underemployment?

The courts will not take kindly to people purposefully avoiding their child support payments. But they do not expect people to take the highest paying job possible at the expense of all other factors. You have the right to stay within the same community as your children and nurture your relationship with them.