It is not uncommon for people to work longer hours in order to pay their bills. One concern that often comes up is whether or not overtime pay and bonuses are factored in towards child support payments. This can depend on different factors, including state laws, the type of work performed, the divorce decree, and the court’s discretion.
Overtime and bonuses can be earned at regular intervals or be given out more randomly, like for work anniversaries, achieving sale goals, or holiday events. High-earning individuals can receive substantial bonuses, which greatly increases their income. Others may work long hours and weekends to earn substantially less.
When child support payments get calculated, the court looks at the income earned by the parent who will be making the payments. They check pay stubs and tax returns to determine yearly average income levels. Overtime and bonuses often count towards a parent’s income, but there can be special circumstances when they do not.
Child support rulings may be revised if one parent successfully pursued a child support modification. This can happen when there are changes to either party’s financial status, but it needs to be around 10 percent or more. Child support modifications may also be approved if the child’s needs change. If the amount is modified, this number is recalculated according to state guidelines.
As a general rule, overtime counts as income for child support in Pennsylvania, but there are exceptions. State guidelines look at the parent’s overall earning status, taking into consideration that overtime is not always consistent. The courts calculate the income on a minimum six-month average, so if there are extra hours involved, they will need to see the annual income. For this reason, it is important to save all records of income as well as tax records, so it can be looked at carefully.
Different states may also look at whether or not overtime and bonuses are reliable sources of income. If an executive earns quarterly bonuses, this could be thought of more consistent than a mechanic who had to work nights and weekends during a particularly busy time.
Parents who report that they have historically worked overtime or earned bonuses may find that this evidence does not work in their favor if the other parent is requesting a modification. The parent challenging the support amount may be able to show that overtime hours are expected and part of the kind of work that they perform, and therefore should be included in any support calculations.
Another way to look at the overtime is to spread it out over a period of time. Some industries are much busier during certain seasons, like tax time or the holidays. If an accountant worked 10 hours of overtime during spring, but no overtime during the rest of the year, this could be taken into consideration. Courts may use their own discretion when making these decisions; at times, they may average overtime and bonus earnings over several years.
If a parent wishes to make child support modifications, they should speak to a lawyer about their options.
If you have questions about overtime and child support payments, our knowledgeable West Chester divorce lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. can help. For an initial consultation, contact us online or call us at 610-565-3701. Located in Media and West Chester, Pennsylvania, we serve clients throughout Delaware County, Chester County, and Montgomery County.
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