Fluctuating or Seasonal Income

• A longer period could conceivably be used if it were more representative of a party’s income; e.g., a two or three-year average might be necessary to obtain a representative picture of an author’s royalty income(highest generally with the book’s initial release). [Marriage of Riddle, supra, 125 CA4th at 1084–1085, 23 CR3d at 279–280]

• By contrast, a longer period may well be unrealistic for a commissioned salesperson in an industry that bobs and dips with the economy as a whole—going back too far only yields figures reflecting the pastoverall economy, not a figure contemplated by the guideline representing the party’s income in theimmediate future. [Marriage of Riddle, supra, 125 CA4th at 1084, 23 CR3d at 280]
• On the other hand, too short a time sample could also distort the party’s likely immediate prospective earnings—as where a large one-time bonus had been paid (unrealistically exaggerating income) or the period was unusually “lean” (unrealistically understating income). “It is a manifest abuse of discretion to take so small a sliver of time to figure income that the determination essentially becomes arbitrary.” [Marriage of Riddle, supra, 125 CA4th at 1083–1084, 23 CR3d at 279–280—immediate past 2 months too short a time sample to predict annual income of commissioned salesperson working in financial markets because it unrealistically inflated his monthly income]

On the other hand, pursuant to § 4060, excluding past bonuses and overtime from the gross income calculation is permissible if the court determines the parent is unlikely to receive them in the future—e.g., because admissible evidence shows a change in employment conditions or that the parent is no longer willing to accept voluntary overtime (but in the latter case, the court still has discretion to consider the parent’s overtime earning capacity; ¶ 6:450 ff.). [County of Placer v. Andrade, supra, 55 CA4th at 1396–1397, 64 CR2d at 741—disregarding parent’s overtime and bonus pay for past 2 1/2 years reversible error where no evidence they were not likely to be paid in future; compare Marriage of Mosley (2008) 165 CA4th 1375, 1385–1387, 82 CR3d 497, 504–505—error to impute discretionary bonus to obligor parent that may never materialize]

“The employee parent has the burden of demonstrating past bonus . . . income is not likely to be continued. Courts are very skeptical of such claims made by the employee party alone. Counsel should therefore obtain declarations from the employer (to the effect . . . bonus pay will be curtailed and why).”

Concerning a voluntary cessation of (or reduction in) overtime, the employee party’s declaration should state the specific reasons (e.g., physical or emotional health, desire to spend more time with the children, etc.).

Finally, when future overtime is in issue, the best approach may be to get the parties to stipulate to paying a percentage of the overtime for child support if and when received or agree that a less-than-guideline amount of the overtime earnings will be paid (stipulated support below the guideline level is permissible, subject to Fam.C. § 4065, This approach encourages the employee parent to continue working overtime, thus increasing the total money available for support of each of the parties and their children; whereas the rigid guideline approach (including past overtime in gross income calculation so long as the employee parent continues to work it) gives the employee parent an incentive to terminate voluntary overtime, redounding to everyone’s economic detriment.