Is Staying Home with Children "Shirking Work" For Child Support Purposes?
By JOANNA GROSSMAN
Tuesday, Jun. 14, 2005
Jane Chen was a well-paid Wisconsin anesthesiologist. But at the age of 43, she decided to "retire" to stay home with her three school-age children.
Even in 2005, Chen's decision was hardly unusual or remarkable: Women (and sometimes men) frequently forego employment, even lucrative employment, in order to stay home with children.
What is remarkable and unusual, though, is that Chen's decision landed her in court. Her ex-husband argued that, by staying home, she was "shirking" her responsibility to provide financial support to their children. And he complained that due to her decision, a court was now ordering him to pay $4000 more a month in child support.
In Chen v. Warner, the Wisconsin Supreme Court recently sided with Jane Chen. It held that her decision was reasonable under the circumstances, and did not constitute "shirking."
Other states, however, have ruled differently. And overall, America features a checkered legal landscape on the treatment of divorced parents who forego income in favor of at-home childrearing.
Some Background on Child Support Law
Once, only fathers were legally required to pay child support. Now, under the law, all parents have a legal duty to support their children.
In a family with married parents, that obligation is enforced mainly through the abuse-and-neglect laws. Parents who fail to support their children risk losing them, and may even face criminal penalties.
When parents divorce - or sometimes, even if they never married - the duty of support changes. For the non-custodial parent, it is enforced through the imposition of formal child support obligations.
In theory, child support has always been available. But historically, it was not routinely awarded until at least the 1970s. Then, through a series of federal laws, Congress required states to adopt rules that would result in a greater number of child support awards, in greater amounts. (It did not, however, mandate what the rules ought to be.)
Pursuant to a 1988 federal law, every state today maintains child support guidelines that dictate exactly how much a non-custodial parent should be obligated to pay. The guidelines in each state are derived from a set formula, which is supposed to produce an appropriate amount of support to meet children's needs. These formulas, regardless of their technical variations, are all based on the basic assumption that children should benefit from roughly the same percentage of parental income after divorce as they did in the intact household.
States tend to follow one of three basic formulas:
First, some states, such as Wisconsin, simply require noncustodial parents to pay a flat percentage of their income to the custodial parents based on the number of children being supported.
Second, a majority of states use the "income-shares" model. In this model, total support is calculated based on a percentage of combined parental income. Then, each parent's portion is calculated based on his or her relative earnings.
Third, a handful of states use a model that first carves out necessary expenses for parental support, and then assigns a percentage of the remaining income for child support.
One of Congress' goals in requiring states to adopt guidelines was to decrease judicial discretion in awarding child support and, thereby, to increase consistency among awards. As a result, the amount of support called for by any set of guidelines is "presumptively" appropriate - which means that a judge can only deviate from that amount (up or down) in certain, limited circumstances.
The Definition of "Income" for Child Support Purposes
While state definitions of "income" vary, most permit judges to replace actual "income" with "earning capacity" in appropriate circumstances.
One such circumstance would be an attempt to avoid obligations. For example, suppose a father quits his job immediately before appearing in divorce court, for the sole purpose of evading a child support award. In that situation, the court will likely substitute his former monthly wage for "0" when calculating child support.
But what if the loss of income is not an obvious attempt to avoid obligation - as was the case with Jane Chen? Should the judge calculate support based on actual income (even if it is "0")? Or should the judge look to the individual's earning capacity instead?
That is the question the Wisconsin courts grappled with, in Chen v. Warner.
Chen v. Warner: The Finances and Their Agreement
At the end of their 18-year marriage, Chen and her then-husband, John Warner, both worked at the Marshfield Clinic. She was earning $236,000 per year as an anesthesiologist; he was earning $256,452 as a neuroradiologist. Both parents had always worked full-time while raising their three children.
When they divorced, the couple agreed to joint physical custody of the children, with custody to each parent in alternating weeks. Based on this fact, and on the respective incomes of the parties, Wisconsin's child support guidelines would have dictated roughly equal child support obligations for the parents in this case (Warner would owe a few hundred dollars more, based on his slightly greater income).
Thus, Chen and Warner parted ways without a child support order in place, agreeing that each would simply pay the children's expenses during custodial periods and unusual expenses would be shared equally. Also, Warner would put $400 per month per child in a college savings account.
Shortly after the divorce became final, Chen sought to go part-time at the clinic. When they refused her request, she quit. Because she had savings of over a million dollars, she anticipated being able to easily cover expenses for herself and the children with investment income alone.
The market downturn surprised her, however, and she found herself with insufficient income to cover her expenses. She then sought to require Warner to pay child support.
By that time, Warner's income had nearly doubled -- to $472,000. Even after he paid his own expenses and contributed to a retirement account, he was left with discretionary monthly income of $12,000.
Thus, his ability to pay child support was hardly in doubt. But, on the other hand, neither was Chen's: Had she stayed at the clinic, she, too, would have been earning over $400,000 yearly, and even returning to work after time off, she could still garner a hefty salary if she chose.
Voluntary Un- and Underemployment: Courts Can Decide Its Effect
Should one parent have to pay child support because of another's change in job status? Or should the parent with changed job status have his or her earning capacity taken into account? (Often, this question is, in practice, the question of whether this parent will be forced to return to work, since one can hardly spend "imputed" income.)
The answer is: It's generally up to the court's discretion.
Few courts still require proof of an ill-motive. But a parent who voluntarily impoverishes herself in a bid to avoid paying child support will certainly fail. But what about when the motive is different - for instance, the lower income is because the parent has opted to spend more time taking care of the children?
In some states, there is an express statutory exception for a "nurturing parent" with young children. Louisiana, for example, exempts the primary caretaker of children under five from having income imputed to them. Similarly, the American Law Institute's Principles of the Law of Family Dissolution recommend against imputing income, based on earning capacity, to a custodial parent with non-school age children.
Wisconsin has no statutory exception, however. The statute permits the discretionary imputation of income if it concludes that a parent is "shirking" - the state's term for voluntary un- or under-employment. ("Shirking," despite its very pejorative connotations, is used by Wisconsin courts simply to describe any unreasonable voluntary decision to reduce or forego income, regardless of motive.)
Wisconsin also, however, permits a court to consider the desirability of having an at-home parent -- and the value of any services provides by the at-home parent -- in deciding whether to impute income to that parent based on his or her earning capacity.
The Chen/Warner Case: Was Chen's Decision to Be At Home "Reasonable"?
The parties in the case all agreed that the unemployment was voluntary, and that the true purpose was for Chen to spend more time with her children. But was it reasonable?
An intact family has the luxury of making almost any decision about work and income that it sees fit - even if the consequence is that children have much less money available to meet their needs. And many families elect to have one parent - usually the mother, despite greater workforce access and gains in equality for women - stay home while children are young.
The decision is made easier by trust: The parent who stays home trusts the other parent to provide for her if, later, her career opportunities are more limited; the parent who works trusts the other parent not to monopolize the children's affections, and gives up time with the children because he trusts that this is best for the family as a whole.
But when parents are divorced, trust may be lacking - and parents may come into conflict when they must defend such decisions to a court. Worse, this task is made all the harder when one parent's unemployment directly affects an ex-spouse's child support obligation.
Parents who might have easily come to a decision about work and income during their marriage, may find such a decision extremely difficult to make when they are divorced. Even simply continuing a prior arrangement that worked well can become controversial as the parties' interests diverge.
The father in this case argued that although children generally benefit from having an at-home parent, the benefit was not sufficient to outweigh the increased burden on him. Moreover, he argued, the children were of school-age, had no special needs, and had done well earlier in their lives, when both parents worked full time.
The appellate court ruled, however, that the mother's decision to retire was reasonable, given the circumstances: She had been unable to find appropriate part-time work, the father could easily afford child support, and the children would benefit from her greater involvement in their lives and activities. It thus upheld the trial court's order for the father to pay $4000/month in child support.
Other States' Approaches: Different From Wisconsin's
In other states without an express exception for caregiving, the results have been mixed. (The variations are aptly described in a 1999 student note in the Catholic Law Review authored by Catherine Moseley Clark, "Imputing Parental Income in Child Support Determinations: What Price for a Child's Best Interest?")
Some courts focus solely on earning capacity, without regard to motive - ill or otherwise. Others take account of a broader conception of a child's best interests to include their non-economic needs as well.
Outside the caregiving context, noncustodial parents routinely have income imputed to them when they voluntarily reduce or forego wages. A father in a recent New York case, for example, was held in contempt of court for refusing to seek admission to the bar when he had both completed law school and passed the bar exam.
The father had chosen to pursue theological studies instead -- a decision the court ultimately said he was not entitled to make given his outstanding child support obligations. His responsibility, in the court's eyes, was to maximize his earning capacity, given his demonstrated ability and the opportunity for high-income work at a law firm.
A Case Involving Parents with Lower Income Will Be a Better Test Case
Yet Dr. Chen was permitted to forego an annual income of $415,000 in order to stay home with her school-age children, over whom she had custody only every other week. Was that the right result?
Most observers might say yes - but the answer would be an easy one only because the father had a very high ability to pay the child support. That meant that the Chen/Warner children could have what many would see as the best of both worlds: ample financial support, plus a full-time at-home parent.
(Others, of course, would see having two working parents - each a role model, fulfilling his or her hopes and ambitions - to be the best of both worlds. But on this topic, reasonable minds differ.)
The law might have been better served by a lower-income case - in which one parent's unilateral decision not to work caused a real hardship for the other parent. Also interesting would be a case in which both parents wanted to stay at home - but only one could do so.
What if Dr. Warner had also wanted to be in Dr. Chen's position? This doesn't seem so far-fetched: After all, he'd sought equal physical custody of the children, not just visitation; he was far from an absentee dad.
In such cases, the court would have had to grapple more thoughtfully with the tension between a parent's duty to provide financial support and the obligation to tend to their other needs. It will have to grapple, as well, with the tension between the different visions two now-adversarial parents may have for what is best for themselves, and for their children.