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I Earn How Much? Income and Child Support in Oregon

Posted by Patrick Ward | Mar 03, 2022 | 0 Comments

Oregon law expects divorcing parents to support their children. The law also favors mediated and collaboratively created agreements regarding child support. According to the Oregon Administrative Rules (OARs), mediated agreements “promote positive parental involvement and prompt, consistent payment of the support obligation,” as well as certainty for the parents and children. A negotiated agreement may deviate up to 15% of the State's child support formula required. OAR 137-050-0765. Clients should negotiate child support along with their divorce or parenting time issues. One of the ways that child support can be mediated is by working together to determine the gross income for the parents.

Brief Overview of Child Support Calculations

Most people rely on the child support calculator to help identify how much child support one parent may have to pay to support the children's needs. The calculator considers the gross income of both parents, the number of children, the number of overnights for each parent (averaged over a two-year time frame), income deductions for a child's social security or veteran's benefits, non-joint children, and health care coverage for the parent and the children. Once all the information is entered, the calculator creates a presumed amount to be paid by one parent to the other for child support. You can find a link to the calculator here.

Income is Gross Income from Any Source.

The calculator first asks about the gross income of the parents. Simply stated, income is almost any money made by a person. Under the Oregon Administrative Rules (OARs), the definition of income is expansive and includes gross earnings from any source, as well as potential income. Any source includes but is not limited to, any employment-related income, as well as reimbursements, allowances, in-kind payments, annuities, trust income, one-kind payments, interests, dividends, rental income, social security benefits, workers compensation benefits, inheritance, gifts, lottery winnings and royalties (this is NOT an exhaustive list and clients should review the rule or talk with their collaborative or consulting attorney about their specific situation.) See OAR 137-050-0715(1)-(4).

At times, identifying income for non-wage earners could be an issue during mediation and collaborative negotiations. Clients could negotiate income in several ways, such as averaging multiple years, anticipating bonuses or stock options for a year, agreeing to recalculations or “what-if” scenarios. A client could claim that income from one year may not indicate income from the following year.

Clients should know that it is in their best interest to disclose all information about their sources of income during the mediation. Full disclosure benefits their children by ensuring that needs are being met in both homes. And it prevents any agreement from being undone by a court for failure to provide information.

Underemployed or Unemployed People May have Presumed Incomes

If a person is underemployed or unemployed, the parent may be required to include “potential income” or a presumed amount of income based on the parent's ability to earn. Potential income may take into account “relevant work history, including hours typically worked by or available to the parent, occupational qualifications, education, physical and mental health, employment potential in light of prevailing job opportunities and earnings levels in the community, and any other relevant factors.” OAR 137-050-0715(3).

In addition, the rules presume that most people can make at least minimum wage unless a disability limits them from earning minimum wage. Unfortunately, due to Oregon's tiered minimum wage system that increases the minimum wage in urban areas over rural areas, this rule disproportionately impacts low-wage or underemployed parents in urban areas who need to stay at home to care for children.

Mediation and Collaborative Divorce may provide clients with the opportunity to have discussions about an appropriate level of presumed income for clients

Rebuttals to the Calculation

The law also presumes that the formula arrives at appropriate child support when calculating income. However, this finding can be challenged by considering the list of factors that are outlined in ORS 25.280:

  • evidence of other available resources of a parent,
  • the reasonable necessities of a parent, the net income of a parent after required employment withholdings,
  • the ability to borrow, the number and needs of other dependents,
  • any special hardships of a parent, the needs of the child,
  • the desirability of the custodial parent to remain in the home as a full-time parent and homemaker,
  • the tax consequences related to who will name the child as a tax related dependent, and
  • the financial advantage afforded a parent's household by a person who is a spouse or in a spousal type of relationship (this last factor is balanced against the rule that spousal income is not taken into account when determining income.)

Mediation and Collaborative Divorce allows for clients to assess rebuttals and whether some may be appropriate to address the proper amount of income applied to the calculator.

Working Together to Agree to Support Amounts is in the Best Interest of the Children.

Calculating child support may seem straightforward at the outset. However, even defining income can get confusing relatively quickly. Clients should work together to ensure that each fully understands the other's full income picture and, especially, their child's needs. This allows the mediator and the collaborative team to work together to ensure that a mediated support amount allows the children to be supported by both parents, which is the correct legal and moral outcome. The alternative – litigation – is even more daunting, especially for underemployed or low-wage workers. In time, money, and emotion, the cost of litigation can quickly become overwhelming and generally is not in the best interests of the family's children.

About the Author

Patrick Ward

Patrick Ward is a Mediator and Collaborative Divorce Attorney who is committed to emotionally healthy and child-centered solutions to family conflict, such as divorce or custody disputes. He is a flexible, creative, and committed resource for clients.

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