In California, courts base the amount of determined child support on the parents' income. However, only certain monetary sources are considered as income.
The court takes the noncustodial parent's gross income into account when determining how much child support should be paid. Gross income includes all work-related income, including earnings from self-employment, severance, contracts, commissions, annuities, pensions, dividend payments, investments and fringe benefits. Government benefits such as Social Security, Veterans' and other military-based payments are also considered income by the state. Supplemental benefits such as workers' compensation, disability or unemployment qualify as income as well.
The state may deem other monetary sources as incomes, even when unrelated to work, government benefits or disability. For example, school-related grants and lottery winnings are viewed as income. When a noncustodial parent marries an individual that earns a substantial amount of money or receives a large amount of alimony, the court could also consider that as a source of gross income.
Unrealized income, which is defined as assets that has not yet been received, could also affect a support obligation. Individual retirement accounts, retained business earnings, stock options, stock-based capital gains and income derived from a trust are examples of unrealized income. Each has the potential yield interest capital, and any fiscal gain may be considered income by the court.
California child support guidelines are designed to consider any potential aspect of income that supports the best interests of the child. Anyone with questions about paying or receiving child support may want to seek the advice of a family law attorney. Legal consultation could help ensure child support payments are accurate, compliant and properly enforced.