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My New Wife Works. Can this NEW MATE INCOME Be Used to Increase my CHILD SUPPORT?

Q. I have two children from a previous marriage. I remarried two years ago, and my new spouse earns $8,500 month. While my hours have been reduced during this recession and my monthly gross averages $3,500. The ex is threatening to take me back to Court to increase child support based upon my new mate's income. Can she do this?

Jason - Santa Barbara, CA

Hey Jason - I used to live in your town!

Of course ex-spouses can always take the other back to court, but that doesn't mean they will win. We call these support modification proceedings. In order to obtain a new order, she must prove there has been some material change of circumstances with regard to her needs, the children's' needs, or your ability to pay a greater sum in support.

The key California statute on when and how new mate income can be considered is Family Code section 4057.5. The basic rule is that courts cannot consider new mate or nonmarital partner income in the context of making child support or support spousal orders. This means as a general proposition that your new wife's income of $8,500/month is not to be inputted into the support guideline formulas.

There are two exceptions where new mate income may need to be disclosed and where it can be considered in setting child support: 1) Where there are "extraordinary circumstances" that would cause the exclusion of this income to create an extreme or severe hardship to a supported child. However, if this hardship is shown, the court must first consider the effect of inclusion of new mate income on any other children including the new mate's children, and so that their interests trump the hardship to the child for which support orders are being sought. 2) By marrying somebody with high earnings, a spouse will pick up additional taxes based upon the other's income. Since as far as the IRS and California Franchise Tax Board (FTB) is concerned, you are liable under community property laws for one-half of your new mate's income, regardless whether you file jointly, the added tax consequences upon this additional income can actually be the basis for a downward decrease in child support (County of Tulare v. Campbell) since there is less after tax income available to you from which to pay support.

There are very few reported California appellate decision on new mate income or which explain how FC section 4057.5 is to be applied. In Marriage of Loh (93 Cal.App.4th 325) a mother/former spouse convinced a trial court, based upon photos of the father's extravagant lifestyle (homes, cars, etc.) which were funded by his girlfriend's income and assets, to impute income to him for purposes of basing a child support award. The appellate court reversed, stating "Evidence of lifestyle, particularly a lifestyle subsidized by a new 'nonmarital partner', is not a cheap substitute for proper discovery of income reported on tax returns."

In a very recent appellate decision (Marriage of Knowles (Oct. 2009) 178 Cal.App.4th 35) a trial court was reversed after it accepted the former wife's argument that the community property income and assets of both he and his new wife should be used to determine his income available for support. The trial court's mistake was include the half that belonged to the new wife, although it could have included just the half that belong to him. There was no evidence of extreme hardship that justified considering the new mate's half.

We've waited a long time for another case dealing with consideration of new-mate income under Fam C section 4057.5. One of the few cases that has, In re Marriage of Wood (1995) 37 Cal.App.4th 1059 is cited here, but it came down in 1995. Neither the statute nor the cases provide any definitive answer regarding what actually constitutes either an "extraordinary case" or an "extreme and severe hardship," although Wood seems to say that new-mate income can be considered where one of the parents is voluntarily unemployed or underemployed.

Rather than arguing for NMI (new mate income), a party seeking to have income assigned to a person who has remarried or is living with a nonmarital partner may find more success by arguing that income should be imputed to that spouse on the basis that they have an earning capacity which is not being realized. For instance, if because your new spouse had sufficient income you chose to quit work or take a lower paying job it might appear you are shirking your support responsibilities. Rather than charging you with NMI, a trial court could find that you had the ability to earn X dollars a month and so charge you for this phantom income by making that the basis for a support award. Then, the community property (including your new mate's share) could be tapped to satisfy this obligation.

Incidentally, a California prenup can be an effective way to limit this exposure.

Author: Thurman Arnold