A relationship breakup or divorce can be stressful enough, but when it involves a high-income earner and child support, it also becomes complicated. In California, every child has the right to share in the standard of living of both parents, and the Court can order the high-earner to pay child support to the other party to ensure that the child enjoys the same standard of living post-separation.
When a child support payor earns significantly more income than the other parent, however, the high-income earning parent may have a basis to request for a decrease in what is considered “guideline” child support if they can show that paying the higher level of support would exceed a child’s needs.
There is no legal definition in California as to what constitutes a “high-income earner” in the context of child support. Many courts will take into account the wealth of the high-income-earning parent in relation to the community at large, and the relative wealth of their counties in making their determination.
In some cases, a parent’s income may be so high as to be considered “extraordinarily high” by any objective standard. For example, while a $1M annual income may be considered a “high income” in Bakersfield, it would likely be considered “average” in Los Angeles. High-net-worth divorce cases cannot only lead to complex property divisions, but can also cause child support calculations to become complicated.
In a divorce, the Court can be tasked with making child support orders. The Court is mandated to order “guideline” child support when requested to do so pursuant to California Family Code section 4057. This order will consider the following factors, in part, when ordering child support:
A computer program, or child support calculator, will be used to prepare this calculation, using the information provided by the parties through required court filings or an argument presented at a hearing.
Although some of these factors may be straightforward (i.e., a base salary as reflected on an earning statement is fairly clear), other factors can be heavily litigated issues, such as income earned from a business owned by one party or the custodial timeshare of the child/children of the relationship.
For example, if one party earns a base salary from a company, but also is eligible for significant bonuses or commission income, that income will typically be accounted for in a child support order with a “Smith-Ostler bonus table” calculation, so that the support payee will owe additional child support based on a percentage of the additional income earned in a given month/year.
Additionally, if the support payor operates his or her own business, the Court may add back deducted expenses, such as depreciation or personal living expenses, to the net business income when calculating the income available for support. In this scenario, experts are often enlisted to calculate the payor’s “income available for support.”
In some cases, a party may earn a high enough income that a Court may consider deviating from the “guideline” child support order. If a party earns a substantial enough income, a Court may find that the standard “guideline” calculations exceed the child’s actual needs. In such a scenario, the Court may actually deviate downward from the guideline original calculated amount.
When making such a determination, the Court will look at the marital standard of living of the parties and the children to determine the quality of life for the children prior to the divorce or separation of the parties.
People often wonder how child support laws work in California. When a California court makes findings in making a child support order, it can be difficult to challenge the order, unless a party can demonstrate a change of circumstances which would justify a modification to the child support calculation. The same holds true even when parties reach an agreement without the involvement of the Court and sign a written agreement for child support.
If one party wishes to modify a child support order, the other party has a right to oppose his or her request. That party can argue that the other parent’s income is not as high as that parent claims (or that it isn’t high enough to warrant a deviation).
They could also argue that the guideline provided child support amount does not, in fact, exceed a child’s needs. They can also argue that a deviation would lead to unmet needs in the child, or that it is not in their best interest to deviate from guideline support.
A request for a modification is not always easy, and it will be up to the party asking for the modification to prove that the child support modification should be made.
When a party wishes to modify a child support order, the burden of proving that there has been a change of circumstances to justify such a modification falls on that party. The “burden of proof” is a “a legal standard that determines if a legal claim is valid or invalid based on the evidence produced.”
For example, if a parent wishes to invoke the “high-income exception” in support of their request for a downward deviation to child support, they must show that the application of the child support formula would be “unjust” or “inappropriate.” They must also show that a lower child support award would be consistent with the child’s best interests. A parent’s financial needs are not considered by the Court.
Alternatively, if a party wishes to argue for an upward deviation from guideline child support, they would have to show that child support should be based on a party’s lifestyle rather than their base income (for example, a party’s extensive real estate holdings, rather than the relatively meager investment income that the other party may have).
If the change of circumstances constitutes a change in the parties’ child custody arrangements, evidence would need to be provided to show the custody schedule was being exercised differently than what was court-ordered.
There is no set amount for a court-ordered deviation, as the Court will make the order consistent with what it deems to be in the best interests of the child/children.
Having a high income in excess of $1M or seeking child support from a high-income earner, can complicate your divorce or custody arrangements. California child support laws allow a court to deviate either above or below “guideline” child support when making child support orders, which can have long-lasting effects on a child’s standard of living.
Just because a court makes an order that seems unfair does not mean there is an option to modify that order unless there is a later demonstration of a change of circumstances. Let Cage & Miles help you navigate the often-challenging road to getting a fair child support order in your case.
Child support figures follow a standard formula, but a high-income divorce can change that. Learn how high income can impact your divorce in California by calling Cage & Miles at (858) 258-5766.