Suppressing Income to Evade Support Obligation


#1

Hello,

I’ve an X who when the time comes for their yearly bonus to be paid out voluntarily chooses to have it awarded as added paid time off ( PTO ) as opposed to added pay to their pay check. I believe the term for that style of benefit mgmt is called a cafeteria plan where in the employee can pick from a variety of methods for benefits. I believe X is doing this to suppress their income. X contends that it isn’t income for the purposes of child support. I contend that is time that they will be paid NOT to work in addition to their allotted normal time off, i.e. sick leave, holiday, vacation.

Surely this situation has come up before and these slack ass arguments have been brought before the judges. Is there a precedent? Need I have the monotonous debate with the X or is there a precedent to point to?

As always, thanks bunches
Sidetracked


#2

I think whether the argument exists that this should be considered income really lies in the value of the PTO. Are we talking about a $1,000 bonus which equates to a week of PTO that can feasibly be used during the year (and wouldn’t really change the child support obligation over the course of a year) or are we talking about a $20,000 bonus which equates to 20 weeks of PTO which cannot be used and will inevitably be paid out at the end of the employment (and would drastically change the child support obligation)?

If it is the latter, I think that it would be worth your time to have a consultation with an attorney to discuss the facts in full to determine if a modification should be sought.


#3

Well, its really about the X being provided a choice. E.g. There bonus is $5,000 and their employer allows them to either take it as paid time off or take it in a paycheck. So, X decides to take 4 weeks of paid time off at $1,250 a week. Essentially X’s w-2 will not indicate a bonus. I suppose the argument could be made that the X is intentionally not working to suppress their bonus income.

Thanks,
Sidetracked


#4

For a court to impute income, it must find that the party’s suppression of income is to avoid or minimize his or her child support obligation.