While different states take different approaches to family law, a prevailing theme is that each parent has an obligation to support their children and, under some circumstances, an obligation to support the other spouse after divorce. To determine an award of child support or alimony (also known as spousal maintenance), courts need to know how much each former spouse is earning or will earn after the divorce is finalized. A former spouse’s earning capacity can be an important factor when that spouse is unemployed or underemployed.
Assume that Fred and Wilma get a divorce. Fred quits his job because he doesn’t want to pay child support for their two minor children. Or perhaps Fred is injured at work and contends that he is no longer capable of earning his former wages. In those cases, if a judge believes that Fred is shirking his responsibility to support his children, the judge will impute income to Fred that he could earn if he made a diligent effort.
When one spouse sacrificed a career to raise children or manage a household so that the other spouse could be the breadwinner, a court will probably award alimony to the nonworking spouse. Assuming the spouse is capable of working, the court might award temporary alimony until the spouse is able to rejoin the labor force. To determine alimony, the judge will need to know when the non-working spouse will realize his or her earning potential. The judge will also want some idea of what that earning potential might be.
Whether income should be imputed to a former spouse that the spouse is not actually earning is often a function of state law. Two recent cases illustrate how different states use the testimony presented by vocational experts regarding a spouse’s future employability.
Using Imputed Income to Compute Alimony
A recent appellate decision in Utah recognized the importance of vocational expert testimony in claims for alimony. The court found that Heidi had monthly expenses of $14,758, which included $4,000 of child-related expenses that were essentially offset by the child support award of $3,613. That left her with almost $11,000 in unmet monthly expenses.
John’s net monthly income was $19,733. After paying child support, he was left with about $16,120 per month. Heidi wanted John to pay all of her unmet expenses from that surplus.
Heidi had not worked outside the home during the marriage. Before marrying, she had obtained bachelor’s degrees in History and Russian, with a minor in Soviet Studies. She had worked as a Russian translator at a law firm in the 1990s.
Based on Heidi’s college degrees and the results of vocational testing, a vocational expert concluded that Heidi was employable in several fields. The vocational expert reasoned that the passage of time since Heidi’s last employment as a Russian translator made it unlikely that she would find employment in that career. However, the skills she gained in college were transferrable to careers as a public relations specialist, market research analyst, or general sales representative. The expert recommended that Heidi pursue entry-level positions that would capitalize on her degree while allowing her to gain experience in another field.
The vocational expert testified that Heidi’s best option would be to find work as a public relations specialist. That career would give her an annual entry-level salary of about $34,150. The court imputed that income to Heidi, which significantly reduced her unmet monthly need. Since John also had expenses, the court entered a monthly alimony award of $6,400.
Heidi complained about appeal that the court should not have imputed income to Heidi above minimum wage because there was no evidence that she could actually earn a higher wage. The appellate court noted that a Utah statute allows income to be imputed to an unemployed spouse. The statute requires the imputation to “be based upon employment potential and probable earnings as derived from employment opportunities, work history, occupation qualifications, and prevailing earnings for persons of similar backgrounds in the community.” The court held that the trial judge was entitled to adopt the vocational expert’s report and testimony to support its decision to impute income to Heidi.
The court rejected Heidi’s claim that the expert’s analysis did not address barriers to her employment. The expert acknowledged that Heidi would need to update her computer skills but testified that she could do so in about three months at a cost of $300 to $400. The expert also acknowledged that Heidi might face challenges returning to the workforce but concluded that those were challenges that Heidi, like most single parents of children who are in school, should be able to overcome.
Ultimately, Heidi offered no evidence “that would have elevated her particular employability concerns above those normally experienced by other working parents.” A thorough analysis by a vocational expert persuaded the trial and appellate courts that it was reasonable to impute a moderate income to Heidi.
Imputed Income in Florida
In Florida, “a court may impute income if a spouse is earning less than he could, if there is a showing that he has the capability of earning more by using his best efforts.” When a spouse is voluntarily underemployed — that is, the spouse could be making more money but has chosen not to do so — a Florida statute allows the court to impute income to the parent.
The statute allows the court to determine “employment potential and probable earnings” from the parent’s “recent work history, occupational qualifications, and prevailing earnings level in the community.” Vocational experts routinely gather information of that nature to form opinions about earning potential.
A recent appellate decision in Florida illustrates how state law limits the income that can be imputed to a parent for the purpose of calculating child support. Fred, a stay-at-home parent during his marriage, obtained a real estate license after his divorce. Rather than working in real estate, he began working as an Uber and Lyft driver, earning about $38,000 a year.
Fred testified that he wanted to start a limousine business and thought he could earn $500 a day. A vocational expert for his former wife testified that Fred could earn $100,000 a year by combining his earnings as a novice realtor earnings from Uber or Lyft. The court decided that Fred should be held to his income projection as the owner of a limousine service and imputed an income of $125,000 per year.
The appellate court applied a Florida rule that, in the absence of “special circumstances,” imputed income should be limited to the maximum that the underemployed spouse has ever earned. Since Fred never earned more than $60,000, the court erred by imputing an income of $125,000 to Fred based on his mere hope of starting a successful business. Since the vocational expert’s testimony was grounded in facts, the appellate court asked the trial court to determine whether special circumstances justified imputing more than a $60,000 income to Fred.