26 Feb High Income Earners and Child Support
Guideline Child Support Presumptively Correct. The uniform California Child Support Guidelines (Fam. Code §§ 4050 – 4076) are typically used in setting the amount of child support. California law provides that the guideline formula (e.g. the figure calculated by DissoMaster) is presumptively correct. (Fam. Code §§ 4053 (k), 4057(a)). However, in limited circumstances, the Court has the authority to deviate from guideline child support where a parent provides admissible evidence showing that the use of guideline would be unjust or inappropriate under the circumstances (Fam. Code § 4057(b)).
The Extraordinarily High Income Earner. One instance where the Court can exercise its discretion to deviate from guideline arises when the payor parent has an extraordinarily high income and the guideline amount would exceed the needs of the child. (Fam. Code § 4057(b)(3)). When a parent seeks a downward deviation from guideline under this section, he or she must prove that application of the guideline would be unjust or inappropriate, and that the lower award would be consistent with the principles set forth in Family Code Section 4053 (which, among others, include that a parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life, both parents are mutually responsible for the support of their children, and the children’s best interests are the top priority). (Fam. Code §§ 4057(b), 4053).
Two Recent High Income Earner Child Support Cases. Two recent California appellate opinions addressed the issue of high income child support, and reached two different results. One case, S.P. v. F.G., affirmed the trial court’s order which deviated downward from guideline and ordered a reduction in high income earner Father’s child support obligation by about $25,000 per month less than guideline, based on a finding that Mother’s proposed expenses were unreasonable. (The Association of Certified Family Law Specialists submitted a request to depublish S.P. v. F.G.). Another case, Marriage of Usher, reversed the trial court’s order which also reduced the high-income earner Father’s child support obligation. In that case, the Appellate Court held that income is only one component to consider when making child support awards, and that given Father’s extreme wealth, a reduction in his income alone was not a sufficient change of circumstances warranting a downward modification.
A summary of both cases is provided below. For more information on this issue, please consult with a family law attorney.
S.P. v. F.G. (2016) 4 Cal. App. 5th 921. In this high income earner child support case, the trial court ordered Father to pay Mother $14,840 per month, a significant reduction from the guideline figure of $40,882 per month. (S.P. v. F.G. (2016) 4 Cal. App. 5th 921, 927). The trial court concluded that the guideline amount would be unjust or inappropriate because the Father had an extraordinarily high income and the guideline amount would exceed the needs of the child. (Id. at 928 – 929). The Court of Appeal affirmed the lower court’s order. (Id. at 936). Despite Father offering no evidence of the child’s reasonable needs, what amount of child support was in the child’s best interest, or why guideline was not in the child’s best interest, the trial court, finding that Mother’s proposed financial needs were unreasonable, (e.g. housing cost of $34,950 per month, entertainment, gifts, and vacation cost of $8,300 per month, $3,750 per month for the child’s clothing and dry cleaning costs, and $1,200 per month for the child’s cosmetology, massages, and spa treatments) deviated downward from guideline. (Id. at 927 – 929). The Appellate Court stated that the trial court properly declined to rubber-stamp mother’s claimed needs or to simply defer to the guideline amount. (Id. 934).
Marriage of Usher (2016) 6 Cal. App. 5th 347. In this high income earner child support case, the trial court issued an order reducing Father’s child support payment from $17,500 to $9,842 per month, based on his decline in employment income. Marriage of Usher (2016) 6 Cal.App.5th 347, 350. Holding that Father’s decline in employment income did not support reducing child support in light of his overall wealth (including assets of over $34M), the Court of Appeal reversed the trial court’s order. (Id.). The Court of Appeal stated that Father’s reduction in income, standing alone, did not constitute a sufficient change of circumstances warranting a reduction in child support as it is “inappropriate” to base child support on income alone where a payor parent has substantial non-income producing assets. (Id. at 359). The Court of Appeal also held that Husband’s assets could generate a 4.5% rate of return.