Ohio Supreme Court Rules One-Time Commisions To Be Excluded In Gross Income Calculation Of Child Support
Under the new Supreme Court Decision, A.S. v. J.W., 2019-Ohio-2473, which was decided on June 25, 2019, commissions that are one time award are not to be included when calculating gross income for child support calculations.
When child support is calculated for a divorce settlement, the court bases the amount on the a number of things, including the gross income of each parent. Gross income, according to the statute (O.R.C. 3119.05(D)) includes the yearly average of pay, plus the average of any bonuses or overtime earned. The Court then can either average those totals from the past three years, or use the most recent year’s information.
The issue that the Court grappled with was to whether commissions are to be included in the calculation of ‘bonuses or overtime’ earned. In part of the statute, it is included in the list, and not included in another part of the statute. This leads to what us lawyer types call ‘confusion’.
To sort through the statute, the Supreme Court looked at the specific case before them. In this case, Mother had primary custody and sought a child support award for Child from Father, in September 2015. After evidentiary hearings and other court proceedings, the magistrate had dates from 2013, 2014, 2015, and most of 2016, as the decision was granted in September 2016.
Confusion And Complications In Child Support Gross Income Appeal – Supreme Court Steps In
During 2016, Father had received a very large commission, which was included in the calculation for child support. Father further testified that this larger commission was the result of four years of work, and was not likely to recur. The magistrate used this large commission by adding the yearly commission average from previous years, this new commission, and his base salary, making his income seem much higher in 2016 than prior years.
Father appealed, arguing that this was a one time commission, and that this projection of what he would make in total of 2016 for child support purposes was improper. Father, nor the court, had any way of predicting any future commissions he might earn, and yet they were included for 2016. Father argued that the statute requires that the courts look to the three prior years, not the projections for the current year. The Appellate Court agreed with the lower court, and affirmed the child support.
At the Supreme Court level, the case was reversed and remanded for a new trial. The Supreme Court held that the amount of income was to be included in the total gross income for 2016, but that they should not be calculated in the same manner that overtime or bonuses are calculated. Average income is to be calculated separately from overtime, bonuses, and commissions.
Additionally, the court is supposed to use the lesser of two values: either the average of all overtime, commissions, and bonuses in three years prior, or the total overtime, commissions, and bonuses received during the year prior. After calculating those numbers, the court is to use the LOWER of the two, which is then added to the parent’s gross total income.
Supreme Court Decision Not Unanimous In Child Support Ruling
In the simplest terms possible: commissions that are likely to recur should be treated like bonuses and overtime, as those things are more likely to recur. If the commission is a one-off deal, or the result of several years’ worth of work, it should not be included.
The decision to exclude commissions wasn’t unanimous. The dissent in the case, written by Justice Stewart, argued that that in context with other parts of the statute, the commissions were clearly meant to be included as they are earned from bonus and overtime income. In another part of the statute, commissions are included in the definition of gross income. Click here to read the decision.
We reached out to Attorney Tommy Howard, the legal director of the Warren County Child Support Enforcement Agency, to get his opinion of the decision. Surprisingly, commission issues aren’t that common he said. He completely agreed with the decision. When they do come up, Mr. Howard stated, they are treated just as the Supreme Court directed. In Mr. Howard’s mind, this decision seemed like “common sense”.
If you’ve got concerns about the child support worksheet prepared in your case, double check the calculations on line 1a. and 1b. We also recommend that you contact a family law attorney familiar with child support calculations. Is cases with bonuses and commissions, the child support calculations can become confusing and tricky!
PUBLISHER’S NOTE: I want to thank law extern Lily Mann for her assistance researching and writing this blog article. Lily will be starting her third year at the University of Dayton School of Law in the fall. Nice job Lily!
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Robert L. Mues
Robert Mues is the managing partner of Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has received the highest rating from the Martindale-Hubbell Peer Review for Ethical Standards and Legal Ability. Mr. Mues is also a founding member of the "International Academy of Attorneys for Divorce over 50" blog. Mr. Mues has also been a dog owner for 55+ years, and just recently, he and his wife are the owners of "Ralph", a rescued mixed Wire Hair and Jack Russell Terrier.