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Earning Capacity / Imputed Income

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Earning Capacity v. Actual Income. Where the support provider is earning less than he could with reasonable effort, the trial judge may consider potential earning capacity rather than actual earnings. Here, the trial court was correct to impute income to the husband. Schuler v. Schuler, 382 Mass. 366 (1981)
 
Earning Capacity is the Relevant Measure Even if no Bad Motive Exists. Father took early retirement, moved to Jamaica to work as an unpaid missionary.  In a modification action, he sought a reduction in child support. The trial court denied this request and the Appeals Court agreed, refusing to reduce support based on father’s actual income and relying instead on his earning capacity.  There was no evidence that the move was a ploy to avoid child support obligations and, in any event, according to the Court, motive — whether in good faith or bad faith — was irrelevant. Bassette v. Bartolucci, 38 Mass. App. Ct. 732 (1995)
 
Imputing Income Improper without Changed Circumstances. The husband sought to modify his support obligation based, among other things, on his reduced income and a claim that income ought to be imputed to the wife. To succeed in a modification, c.208 s.37 requires a showing of a change of circumstances since the entry of the earlier judgment. At the time of divorce, wife was an artist earning almost no income caring for two children, ages six (6) and thirteen (13).  At the time of the modification three years later, she was still an artist earning almost no income caring for the two children, ages nine (9) and sixteen (16).  The trial judge imputed income to the Wife and reduced husband’s support obligation accordingly.  The Appeals Court reversed – since there was no evidence of a change of circumstances in her earning capacity since the divorce judgment, a modification was unwarranted.  As a side note, the Court also cautioned “against relying unduly on the income-earning potential of a wife and mother who has been out of the regular job market for decades.”  Kelley v. Kelley, 64 Mass. App. Ct. 733 (2005)