What is voluntary impoverishment?
Voluntary impoverishment occurs when a person willingly, or voluntarily, gets rid of assets or refuses opportunities to make money to appear less wealthy than he really is. Why would a person do such a thing? Why would anyone want to be poor?
A person might shed his possessions in a quest for spiritual fulfillment and enlightenment. He might want to become a minimalist. He might want to qualify for government benefits. Or, as sometimes happens, he or she might be trying to avoid paying spousal or child support.
Voluntary impoverishment happens. The successful sales manager suddenly makes $30,000 instead of $300,000. The electrician who routinely worked overtime suddenly has none. What might seem obvious can be difficult to prove. A sudden decline in income can also be caused by injuries, economic conditions, or mental stress from divorce.
How Do Washington Courts Decide How Much a Parent Makes?
In divorce court, child support and spousal support, also known as alimony, are calculated based, in part, on the parents’ income. If the person deciding the case thinks the parent should be earning more, he or she will issue an order based on what he thinks the person’s income should be. This is known as imputing income.
In Washington, state law, RCW 26.19.071, spells out how the court should handle imputing income. Under the law, the court is required to impute income to a parent when that parent “is voluntarily unemployed or voluntarily underemployed.”
How Does the Court Decide Who is Voluntarily Unemployed?
The law requires the court to look at many factors to determine whether a parent is voluntarily unemployed or underemployed. Those factors include the person’s assets, residence, employment and earnings history, job skills, education, literacy, health, and age.
The law also requires the court to consider things that might hurt a person’s ability to get a job. That might be a person’s criminal record, the availability of employers willing to hire the parent, and other barriers to employment.
What if I Have a Full-Time Job That Doesn’t Pay Well?
Under the law, the court is not supposed to require you to make more if you are working full time. The Washington statute says, “A court shall not impute income to a parent who is gainfully employed on a full-time basis, unless the court finds that the parent is voluntarily underemployed and finds that the parent is purposely underemployed to reduce the parent’s child support obligation.”
In other words, if you tell your ex you are going to quit your job as a neurosurgeon so you won’t have to pay him child support, you could be setting yourself up for a problem. But, if you quit your job as a neurosurgeon to fulfill a lifelong dream to write novels, that might be a different story.
How is Imputed Income Calculated?
If a parent is working part-time, the court multiplies the person’s hourly rate of pay to full time. Under Washington law, “full time” is not necessarily 40 hours per week. It could be fewer than 40 hours. The law defines “full time” as “the customary number of maximum, non-overtime hours worked in an individual’s historical occupation, industry, and labor market.”
If the parent isn’t currently working, the court is required to calculate full-time earnings at “the historical rate of pay based on reliable information, such as employment security department data.” So, you, or your ex, can’t just make up a number for what you were paid at your last job.
We’re Here to Help
Calculating child support orders can be difficult. If you think your ex is hiding income or assets, you need the help of experienced professionals to help get what you and your children deserve. We’re here to help. Contact us today to schedule a consultation.