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The Impact Of Variable Compensation On Child And Spousal Support Obligations

When parents of young children do not reside in the same home, they have to make decisions about how to address parenting time and financial obligations for the kids. The Ohio courts will typically order the exchange of support along with a host of other issues.  In cases where one spouse earns less than the other a physical separation due to divorce may result in a spousal support order.

Determining how much support one parent will pay can be difficult if the parent paying support doesn’t have a predictable income every week. Variable incomes, such as those earned through business ownership, annual or periodic bonuses, or via sales commissions, can make budgeting more difficult for a family.

What kind of impact will your variable income have on child and spousal support obligations?

Ohio typically looks at the household’s annual income

When trying to establish child support obligations, Ohio looks at the gross income of the entire household and also the individual income of each parent. The same is typically true of situations that require spousal support.

Looking at an entire year’s financial records can give a more accurate picture than just a month of financial records would. Often, it is critical to review several years of records to obtain an understanding of income.  It also helps those with very little income because the court can look at an average income over 12 months, rather than extremely low revenue times or high-income months. Typically, your support obligations will not fluctuate every month just because your income does.

Planning ahead may be particularly important if you are unable to predict your income for future months. Having reserves that you can draw on when your income isn’t high enough and prevent you from falling into arrears. However, if there is a marked decrease that persists for some time, you may have to ask for a modification of your support obligations if it will impact your annual income negatively.

Complex financial circumstances may require a customized approach

Rather than just applying a formula that only really reflects the needs of households with gross incomes of up to $336,467, it may be better for you and your spouse to talk realistically about your unique financial and family circumstances.

Those with complex financial situations and sophisticated revenue sources may need to make their own support arrangements in a settlement rather than hoping that the courts will address their situation with the kind of nuance it really requires.

Recognizing that your irregular income could impact your support obligations or your compliance with support requirements can help you proactively protect yourself in a pending divorce.


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