Money withdrawn from savings accounts can constitute “net income” for determining child support

Money withdrawn from Divorce

Child support is not just about what your “earn” it is also about your “lifestyle.” What you earn and report as income to the IRS is still very relevant to calculating child support. If you have no income, the court may not order any child support or could order a nominal amount such as $20 per week. That said, even individuals who have little to no “income” for IRS purposes still live and some live pretty well. The Illinois Appellate Court recently heard an appeal of a man in Cook County who was ordered to pay $2,000 per month in child support despite being unemployed and having little to no income. The man had assets available to him and withdrew $8,500 per month from his savings accounts to cover his monthly expenses. The man argued that the money he withdrew was not “income” because he was merely spending money he already had and was not earning or receiving monetary gain. The account was self funded by him. Illinois defines “net income” as “the total income from all sources.” An unemployed parent who regularly lives off assets is not absolved of his/her child support obligation. The man lost his appeal.

This does not mean that any withdrawal from a savings or investment account should be used to calculate child support for someone who has a child support obligation. A case could be made it should be factored into an obligor’s child support when he/she regularly uses that money to fund his/her lifestyle or support themselves. The withdraws or gifts from a third party need to be regular and constant.

If someone owes you child support or you have a child support obligation, keep the above case in mind. Other types of “benefits” that could used to calculate child support are:

• Living rent free or a reduced rent
• Use of someone’s vehicle
• The payment of expenses for you by a third party
• Business expenses which reduce your personal expenses