Child Support Bullets Part 7: Proof of Income, Payments and Self-Employed

Over the recent months, I’ve been working on various guides and bullet-point lists of facts and insights for people interested in learning more about the various complications of divorce litigation, divorce mediation, child custody cases and most recently child support matters. This guide explores the basics of child support, one of the most important payments to be determined when two parents get a divorce, live apart, or separate.

In this section of the bullet point guide, I’ll be looking at the complexities that may arise when a parent required to pay child support is self-employed. We’re also going to look at proof of child support payments and proving income.

Please remember to visit the other articles on this blog and my website if you want any further information on these topics.

Child Support and Self-Employed Parents

Family law cases involving children are often among the most complex in my line of work. There are various kinds of family dynamics to consider, and every group seems to come with its own requirements. A common issue that arises in my experience with child support cases, is proving the income of the other spouse, to help guide a child support order.

• When one side of a child support case is self-employed, or working off the books, it’s often difficult to ensure that they provide the right information about their income. When one or more parents are self-employed, it’s important to find a method of proving the income of that spouse or defending against claims that the claimed income is not accurate. This will assist the courts in making decisions regarding child and spousal support orders. Complexities arise when parties claim a lot of deductions and expenses, which may or may not actually be business related, to reduce their overall taxable income.
• One option may be to demonstrate the kind of lifestyle a person lives to prove their ability to pay child support. An analysis of someone’s expenses compared to their claimed income may reveal that someone is failing to provide insights into all the money they earn. In some cases, a party may claim that someone else is paying for a portion of their expenses, however, the court may then impute as income the expenses that someone else is paying on behalf of that person.
• Many clients come to me asking how they can ensure that the income information received from their self-employed spouse is correct. However, it is difficult to ensure that you are getting access to all the necessary information. During a divorce or family law case, it may be important for a request to engage in a deeper investigation of the accounts and financial information provided by each spouse or parent.
• One potential option considered involves using discovery techniques. While this process can be time-consuming, it may also be necessary when proving parental or spousal income. For instance, if you ask for a spouse’s bank statements and he or she refuses to supply them, you may request that the court compels the parent or spouse to deliver these documents or perhaps subpoenas can be served on the institution where these documents are located.
• Another solution could be to ask the court to appoint a forensic accountant to work with you on your divorce, spousal support or child support case. In some instances, I have seen this be the only method to accurately determine what a spouse or parent makes in a self-employed career. Similarly, in divorce cases, these kinds of experts can be used to make a valuation on a business.

Proof of Child Support Payments

Proving income isn’t the only “proof” worth noting when it comes to child support cases. Once a Supreme Court or family court has entered an order for child support, it’s possible to ask the Family Court or Supreme Court to enforce, establish, or modify support requests. Some child support payments are paid directly by one parent to the other.  Some child support payments in New York are made via the Support Collection Unit, known as the SCU.

• When the court has issued a child support order requiring the support collection unit to retrieve payments, the SCU collects and distributes this money. If a paying parent falls behind in their payments, the SCU keeps track of the arrears and can take steps to retrieve payments. Once these services are enabled, the order will need to be paid through the SCU, and the parent needs to ensure payments are made through the SCU.
• If the non-custodial parent in these cases pays the parent directly, the parties must agree to inform the SCU about these payments or ask the court to reflect these payments in order for someone to get credits for direct payments. Making direct payments when there is an order directing payment through the SCU is not a good idea as the payor may not receive credit for any direct payments.
• Once orders are made for child support, paying parents will be given an instruction sheet for payments. Instructions may also be sent to a parent’s employer with information about taking the child support payments out of the individual’s salary.
• People who are self-employed will be able to make payments to the SCU directly through a money order or check. Transfers might be possible to be delivered electronically. It’s important for non-custodial parents to avoid making payments via cash, as they may not receive a record of the payment in this case.
• Parents that have a good relationship with the custodial parent might be able to request for the other to send a notarized letter through to the collection unit. This letter can ask that the paying parent is given credit for a sum paid to the custodial parent directly. However, it’s better not to rely on this document, as it’s easy for issues to arise and, again, if direct payments are made to the other parent the person paying it may never receive credit for those payments. They might be called “gifts” instead of support payments or it might be disputed that the payments were ever made.
• If the SCU won’t accept the document, then it may be necessary for the paying parent to take the issue into court to request a credit applied to your account, and a modification to the overall order. Just because this request is made to the SCU however does not mean that a credit will be granted. I advise clients to always have evidence of any payments made.

If you have any questions about the issues raised above, please do feel free to read through the other articles on my blog and website or reach out for dedicated assistance. You can arrange a time to have an initial consultation, up to half an hour is free, via the online form on this site, or over the phone at 516-333-6555.