Is Bonus Income Considered When Calculating Child Support Payments?

Determining the proper amount of child support is one of the biggest pieces of any divorce that involves minor children. When a significant portion of one former spouse’s income is bonus-based, the calculations can become even more complicated, as a formerly married couple in Florida recently discovered. Consulting with an experienced attorney such as the child custody attorney Tampa FL locals trust is advised.

In 2014, Matthew and Jilla Barlow initiated divorce proceedings. During the trial, the lower court took into consideration Matthew Barlow’s 2013 annual bonus income when calculating the child support and alimony he owed his former wife. Significantly, the former husband’s bonus income in 2013 accounted for more than 50 percent of his overall compensation for the year. While Matthew Barlow did not dispute that part of his income was a discretionary bonus, he did object to the specific information that the trial court relied on and appealed their judgment.

In Barlow v. Barlow, the Second District Court of Appeals sided with Matthew Barlow, ruling that the trial court erred when it did not consider the most up-to-date bonus information available. In this case, Matthew Barlow’s bonus dropped significantly between 2013 and 2014, from approximately $133,000 to $45,000. Furthermore, the appellate court noted that the cause of this dramatic reduction–the loss of a number of large business clients–was likely to continue to affect Matthew Barlow’s bonus in future years as well.

In general, the appellate court asserted that current income should be used as the basis for any calculation of child support and other required payments following a divorce. More specifically, because there was no indication that Matthew Barlow’s bonus figures would increase in future years, relying on a former year’s bonus amount resulted in a significant miscalculation of the former husband’s ability to pay the ordered child support.

For the Barlows, the appellate court’s decision resulted in an order for the trial court to reconsider its child support determinations. Any other couple attempting to work out child support should be aware that bonus income can only be considered in child support determinations when it is up-to-date and representative of future ability to pay.

 

McKinney Law Group Thanks to authors at Mckinney Law Group for their insight into Family and Divorce Law.