Earning Capacity

In a support matter, the incomes of the parties will be used to calculate an appropriate award based on the support guidelines applicable throughout the Commonwealth. At the initial appearance for a support matter, both parties are asked to bring in proof of their income in the form of W-2s, tax returns, pay stubs, or other documentation of income received. If a party is unemployed or underemployed, the courts may consider their earning capacity. Pennsylvania Rule of Civil Procedure 1910.16-2(d)(4) discusses earning capacity. First, the rule indicates there should be a determination that a party willfully failed to obtain or maintain appropriate employment. Involuntary reductions income (e.g. lay-offs or unemployment due to illness or disability) generally do not trigger an earning capacity analysis.

If the reduction income is seen as voluntary (e.g. willingly took a lower paying job or cut hours) then the court may impute an income consistent with that party’s earning capacity. A number of factors should be considered when trying to identify an appropriate earning capacity. For example, age, education, training, skill set, work experience and prior earnings history are relevant to consider. A Judge must explain the rationale behind any earning capacity that is assessed against a party. The earning capacity provision exists so that parties who have a support obligation can’t escape their obligation by leaving their jobs or otherwise lowering their income. Under- or un-employed parties seeking to avoid imputation of an earning capacity should be prepared to show they have taken good faith efforts to secure comparable employment and that any reduction income was for a valid purpose, not to lower or avoid a support obligation.

Click here to read more about calculating support.