Can My Child Support Be Increased Because Of Gifts From My Parents?

People are sometimes inclined to spoil their children and grandparents are especially fond of spoiling their grandchildren. This often results in children living a better lifestyle than their parents could provide because monetary contributions from a party’s parents. However, a grandparents’ generosity may become a negative for their adult child in the event of a divorce.

During and after a divorce, one parent will typically receive child support from the other. In determining income for child support, a court looks at the gross income of each parent (as stated on their tax return) less FICA and medicare taxes along with other possible deductions permitted by statute.

However, on top of a party’s income, Courts may impute income based on gifts made to the parents from relatives. See Domestic Relations Law § 240 (1-b)(b)(5)(iv)(D). Section (iv) specifically states:

At the discretion of the court, the court may attribute or impute income from, such other resources as may be available to the parent, including, but not limited to:

(A) non-income producing assets,

(B) meals, lodging, memberships, automobiles or other perquisites that are provided as part of compensation for employment to the extent that such perquisites constitute expenditures for personal use, or which expenditures directly or indirecly confer personal economic benefits,

(C) fringe benefits provided as part of compensation for employment, and

(D) money, goods, or services provided by relatives and friends;”

Moreover, where combined parental income exceeds $136,000 a court must determine what amount of income over that threshold, if any, that will be included in payor’s child support obligation. Courts look at the following factors set forth in DRL §240(1-b)(f):

1. The financial resources of the child and the parents;
2. The standard of living the child would have enjoyed if the marriage had not been dissolved;
3. the physical and emotional health of the child and any special needs or aptitudes of the child;
4. the tax consequences to each parent;
5. the non-monetary contributions that the parents will make towards the care and well-being of the child;
6. the educational needs of either parent;
7. whether one parent’s income is substantially less than the other parent’s;
8. the needs of other children of the non-custodial parent;
9. if the child does not receive public aid, any extraordinary expenses required for the non-custodial parent to exercise visitation rights; and
10. any other relevant factors.

A paramount concern when determining child support is the lifestyle the child experienced prior to the parents’ divorce or separation. In an attempt to keep the child’s lifestyle consistent, a court may impute income of a gift or loan to a parent based on factors 1, 2, and 10, above. In an Appellate Division Second Department case, the Court stated that “[i]n fashioning a child support award, the court may impute income to a party based on his or her employment history, future earning capacity, educational background, or money received from friends and relatives.” Mosso v. Mosso, 84 A.D.3d 757 (2nd Dept. 2011). When a parent’s expenses (as listed on his/her Statement of Net Worth) exceed the parent’s income, it is likely that the money is coming from somewhere else and “the court may impute a true or potential income higher than alleged.” Mosso v. Mosso at 759. Thus, courts sometimes impute income as a result of gifts or loans made by the grandparents to the parent.

A common argument made by parents is that it is unfair to impute income of gifts or loans because they are gifts from third parties which are voluntarily made and, thus, are not guaranteed to continue in the future. However, most sources of income are uncertain and not guaranteed, especially in this difficult economy. Jobs can be lost and investments can crumble in a day. Notwithstanding, courts pay special attention when gifts and/or loans are made on a fairly consistent basis, as this is stronger evidence for imputing income. When imputing income, courts will also concentrate on the years immediately preceding the divorce action to get a feel for the parties’ recent financial circumstances.