Rule 501.Reasonable earning capacity

The hardest question in support is not what a parent earns but what they could. This rule answers it.

The general test. The court considers each parent's health, income and financial circumstances and reasonable earning capacity, the manner of living the family was accustomed to, and the general equities of the situation.

Full time. A parent employed at least 35 hours a week in work commensurate with their training, education and experience is presumed to have reached their reasonable earning capacity. No more is expected of them.

Part time. A parent averaging fewer than 35 hours in otherwise suitable work is imputed the hours reasonably available — but not less than 35 — unless they have medical limitations, more substantial employment has proven unavailable despite diligent efforts, full-time work available to them would not actually pay more, or a child of the union has profound special needs that inhibit the support recipient's ability to work.

Imputed income. Unemployment or underemployment that is voluntary or due to misconduct — or a failure to provide documentation or to appear — causes earning capacity to be imputed, at not less than 40 hours of wages a week. In deciding what to impute the court weighs assets, residence, employment and earnings history, job skills, education, literacy, age, health, criminal record and other employment barriers, the record of seeking work, the local job market, the availability of employers willing to hire the parent, and prevailing local earnings.

That list is unusually honest for a support rule. Literacy, a criminal record and whether local employers will actually hire this person are the things that decide whether a job exists for someone, and a formula that ignored them would impute income nobody could earn.

Wage surveys. The court may take judicial notice of the federal and Delaware occupational wage surveys. Where capacity has not been established before and actual hourly pay exceeds the survey's entry level for the occupation — the average of the lowest 30% — the rate is presumed commensurate with training and experience. For imputation, analysis starts at the occupation's median and may move between entry and experienced, the latter being the average of the highest 70%, on the totality of the circumstances.

The floor. Otherwise every parent is presumed able to earn at least the statewide entry level wage for all occupations in the annual state wage publication, at 150 hours a month, rounded to the nearest multiple of 10, effective each February 1.

Losing a job. A person receiving unemployment compensation is presumed to have been terminated involuntarily and without cause; termination without it is presumed voluntary or for cause; and unemployment or underemployment continuing beyond 6 months is presumed voluntary. Where the court finds unemployment involuntary and not for misconduct, capacity is presumed to be the greatest of one-half of the parent's previous capacity, any unemployment compensation received, or the minimum income floor.

Disability. A determination of eligibility for Social Security Disability Income or Supplemental Security Income is substantive evidence of a disability, and the ability to earn is judged on the nature and extent of it, the resources available and the totality of the circumstances. A parent receiving Supplemental Security Income is not imputed income or assessed an obligation unless they have income or capacity independent of that entitlement.

Earnest re-employment. Parents who lose income voluntarily or through their own misconduct may have support recalculated on reduced earnings after a reasonable time if they earnestly seek to maximise their earning capacity. A mistake is not a life sentence, provided the person is genuinely trying.

Incarceration. A term of more than 180 days of continuous confinement may be considered evidence of diminished earning capacity, unless the person has independent income, resources or assets to pay consistent with their pre-incarceration circumstances. Rule 506 turns this into an automatic adjustment.

Second jobs and passive income. Secondary income — second jobs, interest, dividends, trusts — is included case by case. It is more likely included where it was historically earned and enhanced the family's standard of living, where it substantially raises the parent's standard of living beyond what the children share, or where it is needed to meet the children's minimum needs. It is more likely excluded where it merely lets the parent make ends meet, pays extraordinary medical or educational costs or extraordinary debt, is needed because the other parent is not supporting the children, substantially conflicts with the parent's contact with them, or was historically saved or reinvested.

Notice the fourth exclusion. A parent working a second job that keeps them from seeing their children is not rewarded for it with a higher support figure.

Primary income always counts. All income from primary employment is included; that it fluctuates, or that wage income exceeds 40 hours a week, is no basis for excluding it. Where income fluctuates the court finds the average monthly income likely to recur. And leaving a second job or declining overtime without just cause is not a substantial change of circumstances for a modification within two and one-half years — while on a new petition, or a modification beyond that period, past second-job income and overtime are not imputed so long as the parent's actual work is substantially full time and consistent with their capacity.

The paperwork. Failing to submit a Child Support Financial Disclosure Report with adequate documentation risks dismissal or an adverse outcome. Adequate documentation commonly includes recent tax returns, W-2 forms, the 3 most recent pay stubs, documentation of Social Security, unemployment and workers' compensation payments, a recent physician's statement on any claimed disability, and receipts for child care and private school. The self-employed file all schedules and forms with corroboration for significant expense categories; those with income from a business they partly own file the organisation's return too, plus other reliable documentation such as recent bank statements where the returns do not show current income.

Untaxed money. Alimony awarded or modified after 2018, nontaxable injury or disability proceeds, personal injury awards treated as income, military allowances, and any cash entitlement not based on need that raises a parent's standard of living without being federally taxable are increased by 25% to estimate the taxable earned equivalent — excluding payments from the Social Security Administration.