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)]
Compare: 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.
