The “Second” Spouse’s Income and Child Support
In Louisiana, a parent’s child support obligation is calculated using his or her "gross income". The law defines "gross income" broadly. For example, a parent’s gross income includes but is not limited to his or her salary, wages, Social Security disability and retirement benefits, and payments from trust. Significantly, a parent’s "gross income" may also include a portion of the income of his or her second spouse. In this article, "second spouse" means any spouse other than the original spouse.Including "Second spouse" income in a parent’s gross income is discretionary.
Judges are not required to include income earned by a second spouse in the "gross income" of a parent. Judges merely have the discretion to do so. Their discretion is not unlimited, however. Louisiana’s child support statute requires that for a judge to include a second spouse’s income in the "gross income" of a parent, the second spouse’s income must be used directly to reduce the cost of the parent’s actual expenses.
This limit on judges’ authority in the case of a second (or subsequent) husband or wife does not apply if a parent is merely living with someone. In such a case, judges may "consider as income the benefits of expense-sharing or other sources". Unfortunately, the statute does not provide much guidance on the difference between "the benefits of expense-sharing or other sources" and the use of a second spouse’s income to "directly" "reduce the cost of the parent’s "actual expenses".What is the Policy Behind Attribution of a Second Spouse’s Income to a Parent?
First and foremost, the whole idea behind attributing a second spouse’s income to a parent for child support purposes is based on the notion that in some cases, the second spouse’s income is, in fact, income to the parent. An example will help make this clearer.
Suppose that a parent, after divorce but before his remarriage, financed the purchase of an F150 pick-up truck and owed $800 per month as a "truck note". If that parent had no income of his own (e.g. he was unemployed), and his second spouse paid his truck note from her income, her income would have been "directly used to reduce the cost of the parent’s actual expense". The same principle would apply if she paid his cellphone bill and his credit card debt. In these circumstances, it might be fair to attribute to him the amount of her payments toward his expenses.
However, suppose the parent borrows the money and buys the truck after his second marriage. Unless he and his second wife have opted out of Louisiana’s community property laws, he and his second wife are both liable for the truck note. If she pays all of it because he has no income, should the full amount of the note be included in the parent’s "gross income" during child support calculations or only half? What should be done if he doesn’t drive the truck 100% of the time but shares its use with her or her children from another marriage?
Things get more difficult to analyze if there is no "actual expense" that is directly paid by the second spouse. For example, suppose that the parent moves into a home that his second spouse owns. If the second spouse’s house note is $1,500 per month and the second spouse pays 100%, should $750 be included in the parent’s "income"? Or should the judge decide what a reasonable rent (or house note) for a single man with children would be and attribute that amount to the parent as "income" since his second spouse is paying his rent, so to speak?
Similarly, if she pays the utilities and garbage and sewer bills, should some portion of those amounts be included in the parent’s "income"? After all, those are her expenses associated with her property and would probably be due whether or not she had married a man who owed child support. In such cases, her payment of her own "actual" expenses benefit him only incidentally.
Things become even more complicated when judges must consider the impact on household finances of children from a prior marriage of either or both spouses and the children, if any, of the current marriage. Suppose a child of a prior marriage of the parent lives in the household with the second spouse. Does the fact that the second spouse is periodically providing that child a place to live, food, heating, cooling, cable, laundry services, and transportation provide a basis for valuing those services and adding their value to the income of the parent?
By and large, published decisions on the impact of a second spouse’s income contain few facts and little analysis of these issues. As a result, lawyers may have difficulty advising their clients. Judges may have difficulty determining what the extent of their discretion is.An Approach to Resolving the Issues is Suggested by the First Circuit Court of Appeal
One case decided by Louisiana’s First Circuit Court of Appeal suggests a practical solution to some, if not all, of the issues raised.
The case Germany v. Germany, 599 So.2d 350 (La. App. 1st Cir. 1992), affirmed the trial judge’s refusal to include in the "gross income" of either parent the incomes of their second spouses in a child support case. At that time, the law regarding the inclusion of a second spouse’s income in the "gross income" of a parent read as follows:
The court may also consider as income the benefits a party derives from remarriage, expense-sharing, or other source.
This older version of the law lacked the current restriction on the amount of a second spouse’s income that could be included in the income of a parent. As a result, in the year the Court of Appeal decided Germany, judges had the discretion to include 100% of a second spouse’s income in the "gross income" of the parent. Some courts had done that. The judge who decided Germany was aware of those decisions. Nevertheless, he did not do that in the case before him. The Court of Appeal affirmed his decision on that issue.
Although the discussion of the issue in Germany is brief and lacks detail, it appears that the judge examined the finances of each household - (1) the household of the father seeking child support from the mother and (2) the household of the mother from whom he sought child support. In both households, second spouses contributed financially to household expenses.
In refusing to use the combined incomes (or earning capacity) of each parent and their second spouse, the court commented that the income of the father’s second spouse was used to support her child of a prior marriage as well as the couple’s own newborn. As to the mother’s household, the court observed that she also had a newborn from her second marriage and her new husband’s income was insufficient to meet their monthly expenses.
In other words, the judge in Germany appears to have concluded that after payment of each family’s household expenses, the second spouses’ incomes were insufficient to pay both his or her share of the household expenses and directly reduce any actual expenses of the "parent". The decision does not tell us exactly what form the evidence of the two family’s household expenses took. However, today’s courts have a tool that could provide the kind of evidence he might have had.Courts Could use a Modified "Income and Expense Affidavit"
Today’s courts are accustomed to analyzing household income and expenses in the context of spousal support. If alimony is at issue, every court has a form that requires the parties to identify, quantify, apportion, and verify their household expenses.
These "income and expense affidavits" (IEAs) can be expanded to identify all of a household’s expenses. Separate columns can be used to apportion the expenses among the members of the household. One column can contain the expenses of the "parent" whose income is at issue. This column should include not only food, clothing, and gasoline (which may vary) but also hard expenses such as house notes, car notes, and credit card accounts. Other columns can contain the expenses of the "second spouse", children of their marriage, children of their marriages to other people, and extended family members who are household residents - as appropriate. Once the "parent’s" share of the household’s expenses is calculated it can be compared to his (or her) net income. If the "parent’s" share of the expenses is greater than his (or her) net income, it can be reasonably assumed that the difference must be coming from somewhere else: For example, it might be coming from the second spouse’s net income, the "parent’s" savings, the "parent’s" sale of his or her separate property, or somewhere else.
Some items on these expanded IEAs will be subject to debate. If the parent and second spouse have purchased a home, some apportionment (e.g. 50-50) of the house note may be in order. If the second spouse owns the home, the housing expense of the "parent" may not be half the house note but the market rate for an apartment. And, if "actual expense" means an expense that the "parent" actually owes to someone for something, the housing expense may be zero.
In the end, courts should resolve these issues in a way that encourages marriages, even second and third ones. Second spouses should not be placed in a position where their income - moved from their side of the ledger to the "parent’s" side of the ledger - increases the "parent’s" child support obligation such that it becomes one of those expenses that the second spouse must "directly reduce" because the "parent" cannot afford to pay it out of his or her own income. Courts should be particularly concerned about this result in second families whose reasonable household expenses equal or exceed the combined incomes of the "parent" and second spouse. These concerns may have been on the mind of the trial and appellate courts in Germany.
When the legislature amended the statute to allow the attribution to a "parent" as income only that money used to "directly reduce" his or her "actual expenses", it rejected the notion that a second spouse’s income could simply be added to the parent’s income.
Furthermore, a second spouse who spends his or her money providing "support and assistance" to his or her husband or wife pursuant to Louisiana Civil Code Article 98 should not have that money included as "income" for the support of children who are legal strangers. Requiring second spouses to support the parent’s children will discourage second marriages and encourage second divorces.
This author believes that attribution of a "second spouse"’s income to a parent should only occur if:
- The parent’s net income is insufficient to pay his or her "actual expenses";
- "Actual expenses" consist only of legal obligations of the parent such as the parent’s car note, house note and credit card debt or share of the same; and
- The "second spouse" directly pays the parent’s "actual expenses".
The Legislature should address the issue of income attribution in a way that provides additional guidance to judges, lawyers, and litigants. Otherwise, results in actual cases being litigated may vary so significantly that they are perceived by the public to be unjust.Conclusion
In conclusion, if you have children of a prior marriage whose other parent is now seeking to add your new spouse’s income to yours, you need to speak with an experienced family lawyer. Be prepared to provide hard evidence of your household expenses and who incurs how much of each one. Know going in that judges have great discretion when it comes to attributing your new spouse’s income to you. Bear that in mind as you discuss with your attorney whether or not you should consider settling your differences instead of litigating them.