Averaging Variable Income Challenged in Manchester, Tennessee Child-Support Dispute: Marcel v. Marcel

December 14, 2022 K.O. Herston 0 Comments

Facts: In their divorce action, Husband and Wife, the parents of one minor child, had to determine child support.

Husband worked at a factory. The trial court directed the parties to prepare a child-support worksheet based on Husband’s four most recent paystubs.

Husband filed an affidavit to which he attached four paystubs reflecting his pay over four weeks. He earned $1126.80 each week, with no bonuses or overtime during those pay periods. The paystubs also showed that sometime during the year Husband received a $1000 bonus and worked 113.8 hours of overtime and 30 hours of double time, resulting in $6500 of additional income. The bonus and overtime earnings had not occurred during the four-week period the paystubs encompassed.

Husband’s monthly gross income was determined to be $4878, resulting in a child-support obligation of $537 per month.

On Appeal: The Court of Appeals reversed the trial court.

In determining a parent’s gross income for child support, the trial court must include the parent’s wages, salaries, commissions, bonuses, overtime payments, unemployment insurance benefits, and other relevant amounts.

Variable income such as commissions, bonuses, overtime pay, dividends, etc. must be averaged over a reasonable period of time consistent with the circumstances of the case and added to a parent’s fixed salary or wages to determine their gross income.

The Court found the four-week period relied upon by the trial court was error because it did not include variable bonus and overtime income:

In this case, the trial court utilized only the previous four weeks of income in calculating child support despite Husband’s history of earning variable income in his current employment. Although Husband had not earned variable income in those four weeks of wages, his most recent paystub reflects that in that year, he had earned $1000 as a “Bonus Lump Sum,” $4808.62 as 113.8 hours of overtime, and $1690.20 as 30 hours of double time. None of the foregoing variable income was considered by the trial court in calculating Husband’s income…. The child support guidelines require the trial court to calculate variable income for a “reasonable period of time.”

Regarding whether a certain period of time is “reasonable,” one commentator notes, “There is no guidance as to the timeframe over which the income should be averaged,” adding “[i]f possible, figures should be considered for at least one year, particularly where the variations are seasonal in nature.” Furthermore, Tennessee courts have displayed “a preference for long-term averaging as the most appropriate method for calculating income that is variable in nature.”

We hold that four weeks is not a reasonable period of time when the parent has earned variable income regularly throughout his or her career. This Court has expressed a preference for the consideration of averaging long-term variable income when calculating a parent’s income for child-support purposes. We determine that the trial court has abused its discretion by applying an incorrect legal standard in its calculation of Husband’s income by considering only four weeks of Husband’s salary or wages as reflected on his paystubs while ignoring Husband’s variable income history over a longer period of time. This calculation based on four weeks of income is not a reasonable period of time as required by the Child Support Guidelines.

The Court of Appeals reversed the trial court’s ruling and remanded the case for recalculation of child support to include Husband’s variable income averaged over a long-term “reasonable period of time.”

K.O.’s Comment: (1) Tennessee’s appellate courts have approved averaging income over varying periods from as little as three months (Grisham) to as long as four years (Carter), although most cases involve averaging over one or two years. As with everything in family law, “It depends.”

(2) Just for fun, I asked the ChatGPT artificial intelligence bot to write a poem about a Tennessee family-law attorney. Here’s what it created in 1-2 seconds.

(3) This one took around 10 seconds.

Marcel v. Marcel (Tennessee Court of Appeals, Middle Section, November 30, 2022).

If you found this helpful, please share it using the buttons below.

Averaging Variable Income Challenged in Manchester, Tennessee Child-Support Dispute: Marcel v. Marcel was last modified: December 14th, 2022 by K.O. Herston

Leave a Comment