California child support case re attributed income

by Annette Burns on April 29, 2007

The California Court of Appeals, 6th District, overturned a trial court decision which imputed $3000/ mo. income to a Father for child support purposes because Father owned his home outright and had no mortgage debt.

Schlafly v. Schlafly California case

The $3000 attributed figure was based on the assumed rental value of Father’s home.  The impact of free housing was discussed in at least two other California cases which are addressed in this opinion, with different results.   The Schafly court felt that a rule which allows courts to consider anything that reduces living expenses as income leads to support awards which are based on money the payor doesn’t have.   

If an employer provides housing as a part of a benefits package, that housing expenses is properly included.  In this case, where the housing was not an employee benefit, the imputation of $3000/ mo. for non-employment related housing "bears little or no relations to the obligor’s actual monthly income"

This case also approved the trial court’s imputation of a 3% return on an investment portfolio that was actually returning 1.9% in dividend income, finding that the 1.9% rate of return was an underutilization of assets that could be increased merely by changing the asset mix to bonds. (The investment portfolio was $2.9M.) 

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