If you have minor children, you may be paying or receiving child support. But how do you determine what counts as income for child support purposes?
A recent Illinois case helped clarify this issue. In Re Marriage of McGrath examined whether money regularly withdrawn from a savings account qualified as income for child support purposes. (See In Re Marriage of McGrath at http://www.state.il.us/court/opinions/SupremeCourt/2012/112792.pdf.) In McGrath, the father was unemployed, but living off $8,000 per month in savings account withdrawals. The Illinois State Supreme Court held that the savings withdrawals could not be counted as income.
Under Illinois law, child support is based on net income. Net income is defined as "the total of all income from all sources" minus certain deductions for items such as FICA, federal and state taxes. (750 Illinois Compiled Statutes 5/505(3)). Illinois courts have followed the dictionary meaning of net income as "something that comes in as an increment or addition…a gain or recurrent benefit that is usually measured in money….the value of goods and services received by an individual in a given period of time," or "the money or other form of payment that one receives, usually periodically, from employment, business, investments, royalties, gifts and the like." The McGrath court reasoned that savings account withdrawals simply didn’t fit any of those categories. Since the father already owned the savings, withdrawing the money did not convey a benefit.
This does not mean, however, that refusing to work and living off your assets is a surefire way to beat child support. A court can increase child support based on the assets of the noncustodial parent versus the needs of the children. Furthermore, courts can impute income to a noncustodial parent if that parent refuses to work, is trying to evade child support, and turns down job opportunities.
If you have questions about this or another domestic relations matter, please contact Zachary W. Williams at 1-312-981-0851 or email zwwlawyer@gmail.com.
