Under certain circumstances, Georgia law has permitted courts or juries to utilize a party’s earning capacity rather than gross income to determine the amounts of child support, alimony, and attorney’s fees to award in divorce actions and other domestic cases.(1) One factor considered when analyzing earning capacity is evidence of a party’s suppression of income.(2) Essentially, imputation of income amounts to a quantification of suppressed income and unrealized earning capacity. This article explores the use of imputed income for determinations of child support, alimony, and attorney’s fees in Georgia divorce actions.
Georgia law expressly permits imputation of income in specified contexts when establishing the amount of a child support obligation. “[I]f a parent fails to produce reliable evidence of income, such as tax returns for prior years, check stubs, or other information for determining current ability to pay child support or ability to pay child support in prior years, and the court or the jury has no other reliable evidence of the parent's income or income potential, gross income for the current year may be imputed.”(3) The manner by which a court or jury must impute income in the absence of reliable evidence of income is as follows:
When imputing income, the court or the jury shall take into account the specific circumstances of the parent to the extent known, including such factors as the parent's assets, residence, employment and earnings history, job skills, educational attainment, literacy, age, health, criminal record and other employment barriers, and record of seeking work, as well as the local job market, the availability of employers willing to hire the parent, prevailing earnings level in the local community, and other relevant background factors in the case. If a parent is incarcerated, the court or the jury shall not assume an ability for earning capacity based upon pre-incarceration wages or other employment related income, but income may be imputed based upon the actual income and assets available to such incarcerated parent.(4)
Income also may be imputed to calculate child support where a parent is willfully or voluntarily unemployed or underemployed:
If the court or the jury determines that a parent is willfully or voluntarily unemployed or underemployed, child support shall be calculated based on a determination of earning capacity, as evidenced by educational level or previous work experience. In the absence of any other reliable evidence, income may be imputed to the parent as provided for [in the absence of reliable evidence of income].(5)
Even if a parent suffered an involuntary loss of employment, income may be imputed if evidence shows a prolonged period of unemployment and little to no effort by that parent to obtain new employment.(6)
As with child support, Georgia law authorizes a finder of fact to impute income to a spouse for aspects of alimony determinations. In determining the amount of alimony, if any, to award to a spouse, a court or jury must consider multiple factors, including the financial resources and earning capacities of the parties, and such “other relevant factors as the court deems equitable and proper.”(7) A factfinder can impute income to a spouse when applying those factors, because a spouse’s assets or earning capacity bears upon the spouse’s ability to pay alimony, and income or imputed income provides evidence of earning capacity.(8)
Lastly, in appropriate situations, a court may impute income when determining the amount of attorney’s fees to award in a divorce case. Governing law requires a court, in a divorce action and certain other domestic proceedings, to “consider the financial circumstances of both parties as a part of its determination of the amount of attorney’s fees, if any, to be allowed against either party.”(9) As part of its consideration of the parties’ financial circumstances, a court may consider a spouse’s earning capacity and in essence impute income to that spouse.(10) For instance, in one divorce action, the court based its award of attorney’s fees on findings that “the husband was underemployed and/or unemployed by his own doing and in direct contravention of the wishes of his wife, and that the husband, because of his relative youth, college education, and good physical health, was clearly capable of earning more income.”(11)
(1) Duncan v. Duncan, 262 Ga. 872, 873(1), 426 S.E.2d 847 (1993). (2) Id., at 874(1). (3) O.C.G.A. § 19–6–15(f)(4)(A). (4) Id. (5) O.C.G.A. § 19–6–15(f)(4)(D)(vi)(IV). See also Friday v. Friday, 294 Ga. 687, 755 S.E.2d 707, 710(1) (2014). (6) Galvin v. Galvin, 288 Ga. 125, 126(2), 702 S.E.2d 1555 (2010). (7) O.C.G.A. § 19-6-5(a)(4), (7) and (8). (8) Wood v. Wood, 283 Ga. 8, 9(1), 655 S.E.2d 611 (2008); and Gordon v. Gordon, 244 Ga. 21, 22, 257 S.E.2d 528 (1979). (9) O.C.G.A. § 19–6-2(a)(1). (10) Klardie v. Klardie, 287 Ga. 499, 697 S.E.2d 207, 210(3) (2010). (11) Id.