The impact of a parent’s mortgage-free or rent-free housing on his or her living expenses and resources may warrant a special circumstances upward adjustment. [Marriage of Schlafly(2007) 149 CA4th 747, 758–759, 57 CR3d 274, 281–282 (H, extremely wealthy, lived in mortgage-free house)]
Some cases have accounted for a parent’s free housing as imputed income in the formula child support
calculation and the effect of rent free housing on child support could increase the child support paid.
A line of authority upholds court discretion to treat as income in the formula calculation otherwise nonincludible benefits, such as free housing and other one-time or noncash gifts, to the extent they reduce the recipient parent’s living expenses. [Stewart v. Gomez (1996) 47 CA4th 1748, 1754–1755, 55 CR2d 531, 535—disabled parent’s free housing on Indian reservation treated as income by analogy to § 4058(a)(3);County of Kern v. Castle (1999) 75 CA4th 1442, 1451, 89 CR2d 874, 880—error not to factor into child support calculation $1,150 additional monthly disposable income H enjoyed after paying off his mortgage with inheritance; see also Marriage of Chakko (2004) 115 CA4th 104, 109, 8 CR3d 699, 702 (personal living expenses paid by obligor’s wholly owned business]
However, a blanket “anything that reduces living expense” approach to § 4058 income has been sharply criticized. Among other reasons, § 4058 itself confines that approach to employment benefits and the most common instances of “things that reduce living expense” are new mate income, which the Legislature has placed off limits in adjudicating child support. Moreover, this approach would inevitably “bog down” the computer/formula calculation of child support in problems of where to draw the line (“[d]iscount coupons received in the mail, free or discounted tickets to entertainment events … or even the value of an employer’s contribution to Social Security might be characterized as ‘income’ ”). [See Marriage of Loh (2001) 93 CA4th 325, 334–336; Marriage of Schlafly (2007) 149 CA4th 747, 758–760, 57 CR3d 274, 281–282—error to include as income rental value of H’s mortgage-free house that is not an employment benefit]. It is important to consider the effect of rent free housing on child support as a factor for the court to consider and speak with an experienced attorney who can assist you with this set of circumstances.
The effect of rent free housing on child support or any other benefit or perk that reduces a party’s living expenses can have a substantial impact on the child support calculation. Contact our office for a consultation to discuss how this set of circumstances can be used.