Virginia Support: Imputed Income Primer

Wow!  The Virginia Court of Appeals recently handed down two published decisions discussing at exhaustive length how imputed income is supposed to work in child support cases.[1]  So let’s look at how this all works with a nice Q & A.

– Is imputation mandatory if the person is voluntarily unemployed or underemployed? 

No.  The Virginia General Assembly amended one of its support deviation factors to require its courts to consider “the good faith and reasonableness of employment decisions made by the party, including to attend and complete an educational or vocational program likely to maintain or increase the party’s earning potential . . .”  Va. Code § 20-108.1(B)(3).

– Why did anyone think that imputation was always mandatory?

Because the Virginia Court of Appeals liked to throw this line around in too many of its decisions:

“[Virginia Code § 20-108.1(B)(3)] does not expressly require the court to impute income to a parent found to be voluntarily unemployed, but such a reading is implicit both in the text of the statute itself and in this Court’s prior opinions interpreting that text.”  Hamel v. Hamel, 18 Va. App. 10, 12-13 (1994).

For what it’s worth, the court basically apologized for this in Murphy.

But is imputation mandatory if the person lacked good faith or reasonableness in his or her employment decisions?  Yes.  See, e.g., Niblett.

And is imputation mandatory if the person becomes unemployed due to incarceration (i.e., he or she didn’t exactly make an employment decision, just a dumb decision that led to incarceration)?  Yes.  See, e.g., Niblett.

 Must the court deviate from the guidelines if imputation occurs (i.e., is the court precluded from taking other factors into account to override the effect of imputation)?

No, the court must consider all of the factors including what weight to assign each factor (including the imputation factor).  Therefore, the court can give greater weight to factors other than the imputation factor, thus overriding the effect of imputation.   See, e.g., Niblett.

– Must the court use a particular method of imputing income?  Is expert testimony on the subject absolutely necessary so as to avoid pure speculation as to what this person should be earning?

No.  The court’s core consideration is what this person would have been earning on the date of hearing but for their voluntary choices.  Thus, recent past earnings often provide the best evidence of what the person would have been earning but for his or her voluntary choice to be unemployed or underemployed.

– But is imputation still required for someone like an incarcerated person who might go years without earning and who might have extremely limited sources of income upon release?

Yes, imputation is still required.  In Niblett, the court said: “Instead of considering what earnings father might earn post-incarceration, the trial court here should have considered what he would have been making but for his misconduct and based imputed income on recent past earnings” (emphasis in original).

– But can the court consider the actual reality of an incarcerated person’s situation to override the effect of imputation?

Yes.  As the Niblett court mentioned in a footnote, it’s conceivable that the trial court on remand might say that it is ultimately not in the child’s best interests for his or her father to exit prison with massive child support arrears.  Or, it’s conceivable that the trial court will just impute income because it’s inequitable to force the other parent to deplete her assets to effectively pay the incarcerated parent’s share of support for the child.

What if there are no recent past earnings to introduce in evidence? 

If there are no recent past earnings, then presumably expert testimony from a vocational expert might be necessary.

[1] All content in this post is derived from the decisions in these two cases: Murphy v. Murphy, Record No. 2270-14-4 (Va. Ct. Appeals 2015) and Niblett v. Niblett, Record No. 0716-15-1 (Va. Ct. Appeals 2015).