Friday, May 25, 2012

Withdrawals from Savings are not Income When Calculating Child Support Using the Statutory Guidlines

The Illinois Supreme Court has ruled that saving’s account withdrawals are not income when calculating child support using the statutory percentage guidelines.

In the McGrath divorce the mother was granted residential custody of the children and the issue of child support was reserved because the father was unemployed.  The mother later filed a petition asking the court to enter a child support order.  At the hearing the father testified that he was still unemployed and was living off of $8,500 he withdrew from his savings account each month.

The trial court ordered the father to pay $2,000 per month but explained it was NOT imputing income to him, just using the fact that the father was “receiving or obtaining money on a regular basis” in its decision.

When the father filed a motion to reconsider, the trial court denied his motion.  The court explained that it was required by statute to determine what child support would be awarded using the guidelines, and then used the monthly withdrawal amount as “passive net income” and applied various adjustments to arrive back at the amount in its original order.

The appellate court upheld the trial court’s decision, explaining that IMDMA’s “definition of ‘net income’ is expansive: ‘the total of all income from all sources’” and that withdrawals from savings is not among the specific exclusions from net income.

The Supreme Court said they both got it wrong.  The issue is not with the definition of “net income” but with the definition of “income.”  And withdrawals from a savings account are not income because the “money in the account already belongs to the account’s owner, and simply withdrawing it does not represent a gain or benefit to the owner.”

But the mother is not totally out of luck.  The Supreme Court remanded the case to the trial court for a new calculation.  As allowed by IMDMA §505 the court can deviate from the guidelines and consider “the financial resources” of the father.
IRMO McGrath, 2012 IL 112792

Submitted by Brian D. Moore, Class of ’92.

1 comment:

Unknown said...

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