Overtime Part Of Gross Income?

[vajanedoe]

What is the name of your state? VIRGINIA

I need clarification. My ex-husband and I are divorced and child support was arranged in our court-approved agreement (we have not had need to use DCSE; I am only seeking information). I am the custodial parent, and our agreement states that we recalculate child support every February based on both our W-2 Forms using the VA Child Support worksheet. My ex says now that he has called Social Services and someone told him that overtime pay is not included in gross income. I researched VA Code 20-180.2 (C)(4), and this appears to be true only if it is considered "Secondary employment income" obtained in paying court-ordered arrearages. Further, normal gross income is defined as "all income from all sources" including wages and salaries, etc. Since my ex is not in arrears, wouldn't overtime wages be included in normal gross income? If anyone knows the answer to this question, please email me... vajanedoe at gmail dot com.

Thank you!

 

[nextwife]

Is the overtime reliably available? Does he have a history of being able to rely upon getting this overtime?

I ask, because some overtime is totally discretionary by the employer (and sometimes only available seasonally or because someone else that works there is out on leave of absence) and cannot be counted upon as a regular source of income. For example, I worked in retail for years, and would get a TON of OT, but ONLY November to January 1. After that, OT only when someone took their summer vacation, and then lots again starting at Thanksgiving. A schedule such as that should NOT have monthly CS based upon two months that would not repeat until the next year. In our office, someone has been out due to illness, so two people have been working OT to "cover". Once that person is back, they will have no more OT.

In mortgage lending, for example, the OT cannot be counted UNLESS the employer verifies that this OT will continue to be available on the same basis..

Get two or three years of tax returns and establish the OT history. If he has a history of always getting these OT monies, it is appropriate to count it in income.

Also, do you think it is fair to legally OBLIGATE him to continue to work full time PLUS OT? Maybe he was only taking OT hours to pay off some bills and only planned a few months of OT to get caught up.

 

[vajanedoe]

Is the overtime reliably available? Does he have a history of being able to rely upon getting this overtime?

Yes, he has had varied, but consistent, overtime for the last 2.5 years (the entire time at his current job which he obtained just before we separated). Also, he has always sought to work overtime since I've known him (we were married over 14 years). This is not a short-term, temporary thing.

Keep in mind that our divorce agreement ensures that we recalculate his child support each and every year based on our W-2s using the VA state guidelines and worksheet. This benefits him as well since I am salaried (no overtime) with consistent raises every year, and this is reflected in our percentage split.

FYI... He is currently paying $832 per month for TWO children ($416 per child per month). This amount for this one year is probably the most he'll ever have to pay because he did work regular and excessive overtime last year. He was paying less for 2003 and 2004, and this amount will more than likely reduce for 2006. He is certainly not being persecuted.

 

[LdiJ]

Ahh hold on here, OP. You're making a contradictory statement here. You are saying that overtime, in itself, is consistent, but the amount of OT actually worked is NOT! THAT is a problem. One week your ex could have a few hours -- and the next could have 3x as many. So, OT is NOT consistent.

You say that this overtime is NOT a "short-term, temporary thing." Is that a guarantee? Is this actually in writing in his work contract or handbook that there is mandatory overtime? If not, then it's not a definite thing. He may "seek overtime", but is there a guarantee he'll always get it -- and the same amount week-to-week? I highly doubt it. With the economy the way it is, nothing is for sure. Not even a job. Your ex can certainly make some valid arguments about using OT in support calculations. In fact, higher courts have even struck down calculations using OT where it's not guaranteed.



But I am sure your raises are not all that much (average of 2%-4%, I'm sure) -- and when you add that up, it really doesn't amount to that much. Actually, doing it every year benefits you, too.



No, but using OT in his calculations is. Especially since the amount is not consistent and even YOU are saying his amount goes down every year. What does that tell you? If he, alone, is paying $832 a month for support, what is the amount of your financial contribution? Who's paying the health insurance costs? I'd say the children are doing just fine between the both of you.

Why don't you just leave the OT issue alone?

I know it sounds like I am picking on you....but I am not.

This is all opinion....not fact based on the law......and it is opinion based on your very particularly point of view....based on your own situation.

While I personally tend to believe that overtime shouldn't be included in a child support calculation (nor a second job either unless that second job brings in a very signficant portion of the ncp's income)...the fact of the matter is that overtime IS normally included in a CS calculation, unless its very infrequent or very inconsistant.

Being inconsistant from week to week is not what I am talking about. The example someone else gave of overtime only being seasonal...for a short time each year is one of the better examples.

 

[LdiJ]

Actually, there is no "personal" situation w/me. I don't get OT where I work. The point I was trying to make was, the amount of OT in itself was not consistent, so depending on the amount of OT they calculate (like if they take the most he's made), then that's not fair. For example, if he's consistently working at least 4 hours of OT/week, then use that. He can make some valid arguments (and since we're not privvy to the nature of his biz) and I have read where using OT, in some situations (outside of the seasonal example) has been struck down by higher courts.

Can you provide any citations on that? I agree that the seasonal example is not the only time that OT might not be included in a calculation...however, I think that you may be looking at this issue incorrectly.

 

[nextwife]

Can you provide any citations on that? I agree that the seasonal example is not the only time that OT might not be included in a calculation...however, I think that you may be looking at this issue incorrectly.

Some businesses also trend up and down over a period of years. For example, many people I know in Mortgage lending/closing have had a lot of OT available the past two three years, but refi's are pretty much over, so this year, and likely the next few years they will not see the hours they had last year. Even though they may have had OT the last two years, would it be proper to compel a person to pay CS based upon OT income that the employer cannot and will not guaranty will be available to the party? The ability to RELY upon that income being available is what the lending industry uses to determine if OT income can reliably and for THE FUTURE be counted as income in the process of "qualifying" one for a given payment.

IF an employer says, "Yes he worked that OT the last two years, but I do NOT want to commit to having that OT available the next two years, because things are now slowing down", then the underwriter will NOT count that as income for FUTURE commitments.

As to raises, a raise is a DEFINATE increase in income and applies to their regular full time employment.

 

[vajanedoe]

Why don't you just leave the OT issue alone?

I didn't open the subject up... he did, just yesterday. We both had copies of the Virginia State Code, the CS worksheet and guidelines. We calculated the first time when we came to our original separation agreement in Sept 03, again in Feb 04 and Feb 05. In this entire time there has been maybe a total cumulative period of 1-2 months that he did not work any overtime. Overtime may not be guaranteed, but it is a regular thing for him. This is why our annual recalculation is indeed fair and equitable. He will never be stuck paying an inordinate amount for an extended time.

If he, alone, is paying $832 a month for support, what is the amount of your financial contribution? Who's paying the health insurance costs?

More particulars in our case:

• This year our split is 60% him and 40% me. Last year's split was 55% him and 45% me... obviously not an excessive jump due to his overtime.
• The children are on his medical insurance (no dental). However, I pay ALL unreimbursed medical and dental expenses (i.e. prescriptions, eyeglasses, dentist appointments, doctor visit co-pays, etc.). This is significant because the law changed in July 2004 to read as follows,
  
  "D. Except for good cause shown or the agreement of the parties, in addition to any other child support obligations established pursuant to this section, any child support order shall provide that the parents pay in proportion to their gross incomes, as used for calculating the monthly support obligation, any reasonable and necessary unreimbursed medical or dental expenses that are in excess of $250 for any calendar year for each child who is the subject of the obligation. The method of payment of those expenses shall be contained in the support order. Each parent shall pay his respective share of expenses as those expenses are incurred. Any amount paid under this subsection shall not be adjusted by, nor added to, the child support calculated in accordance with subsection G. For the purposes of this section, medical or dental expenses shall include but not be limited to eyeglasses, prescription medication, prosthetics, orthodontics, and mental health or developmental disabilities services, including but not limited to services provided by a social worker, psychologist, psychiatrist, counselor, or therapist.
  
  E. Any costs for health care coverage as defined in § 63.2-1900 and dental care coverage, when actually being paid by a parent, to the extent such costs are directly allocable to the child or children, and which are the extra costs of covering the child or children beyond whatever coverage the parent providing the coverage would otherwise have, shall be added to the basic child support obligation."
  
  I could have pursued changes in child support based on this, but I didn't. But I certainly will if he tries to exclude overtime.
  
• Our children have always gone to a parochial school. This is the choice we made together as parents when they started school. He begrudgingly agreed to pay the younger child's tuition while I pay the older child's tuition (the more expensive of the two). When the older child graduates, we will split the younger child's tuition 50-50. He refused to pay any other related educational expenses for either child (registration fees, books, supplies and materials, sports fees, etc.). I pay these expenses for both children exclusively.
• Even though he left the family because he "just didn't want to be married anymore," I did not pursue legal revenge. I sought only to get a fair amount for our children so that their lives wouldn't change any more than necessary. We did not have extensive assets. He turned the house over to me (mortgaged with not a large amount of equity), but I took all joint credit card debt and I sought neither spousal support nor any share of his future retirement payments (and we were married over 14 years). Considering the fact that he unilaterally decided to end the marriage and leave his family, he is certainly not being treated unfairly.

Please understand that I am remarried and happy with my life. I do not want any more out of him than what is fair to my children. He is apparently not suffering financially. He recently purchased a 2005 Ford F-150 SuperCrew (loaded) and moved in with his girlfriend and her three children. I want nothing from him, but he has a responsibility to his children.

 

[kayceebee]

Here's how I chose to work out my personal situation.
My ex works 48 hours on Monday - Friday. He works about 40 Saturdays (5 hours) and 20 Sundays (5 hours) a year as well. We were married for 14 years and he worked this type of schedule the entire time. When we divorced and were working out CS, I suggested we base his income on his Monday-Friday pay only. That was his mandetory work schedule. That included 8 hours OT each week. I didn't feel it would be right to use his W2 amount - because the Saturday and Sunday hours were not every week and if he chose to work those days, then he wasn't held accountable.

I also suggested his bonus not be incorporated in the equation. I get a percentage of it at the time he receives it.

 

[haiku]

FYI... He is currently paying $832 per month for TWO children ($416 per child per month). This amount for this one year is probably the most he'll ever have to pay because he did work regular and excessive overtime last year. He was paying less for 2003 and 2004, and this amount will more than likely reduce for 2006. He is certainly not being persecuted.

just a little nitpick here, but it is important to know when figuring support amounts....

Child support is not usually split that way (half). Support, in all states I know of is figured on the oldest child. The bulk of his support payment is for your oldest child. subsequent children only usually count for 2% of an order. (The assumption is the household already outlays for the first child, and subsequent children don't add as much to that bottom line)

As each child of an order comes of age, the next child becomes the "oldest" child of the order. Therefore the household will never see a signifigant drop in child support income.

The example being when your oldest child turns 18, your child support will likely not change much from the $832. if that is what he is still paying, and it definitely WON'T be cut in half as you are assuming here.

 

[vajanedoe]

Thank you all for your replies. I have had email contact from two lawyers who indicate that under normal circumstances in my state overtime is generally considered part of gross income. One said that normally the judge will look at overtime year-to-date and average it monthly, but that we seemed to have that covered by using the actual W-2s in our yearly recalculation.

That information, as well as your replies, was very helpful to me.

 

[legalcuriosity]

Can you provide any citations on that? I agree that the seasonal example is not the only time that OT might not be included in a calculation...however, I think that you may be looking at this issue incorrectly.

Yes, I can provide those citings that were based on those particular situations (but I have to track them down). and no, I am not looking at the issue incorrectly. Each case is different and, depending on the circumstances involved, can be argued.

 

[LdiJ]

Yes, I can provide those citings that were based on those particular situations (but I have to track them down). and no, I am not looking at the issue incorrectly. Each case is different and, depending on the circumstances involved, can be argued.

Ok...remember, I am not one of the ones who ask for citations just to be a pain...I ask because I want to read them.

As I said, I agree that the seasonal situation is not the only case where overtime might not be included in the calculation....which is why I was interested in the particulars of the cases you were refering to.

I do know however that overtime is include in many calculations...particularly if the overtime has a certain amount of consistancy.

 

[vajanedoe]

Just following up... I received the following answer to my email to the VA Dept of Social Services (Child Support Enforcement):

-------------------------
Customer Services Program
<[email protected]> to me

We are not able to provide legal advice to individuals, but we do have the
same understanding that you do. All income is considered, including overtime
pay.
-------------------------

Again, thanks for the discussion.