To determine child support obligations, Kentucky law requires figuring out the income of each parent.
The law outlines exactly how this process works and what to do in situations where a parent is voluntarily underemployed or unemployed.
Standard calculation
The court will look at wages, salaries, bonuses, commissions and other compensation to calculate each parent’s income. Additionally, income can include profits from a business, rental income and royalties. Parents must submit accurate information to the court about their income for a fair calculation.
Earning capacity
If a parent is voluntarily underemployed or unemployed, the court looks at earning capacity. This is the income a parent could earn. The law requires doing this to prevent parents from avoiding their child support obligation by purposefully reducing their income. To determine earning capacity, the court considers factors such as the parent’s work history, education, job skills and current job market conditions.
Self-support reserve
Kentucky law provides for a self-support reserve, which is the minimum amount of income a parent must have to support themselves. Any calculations must take this into consideration to ensure the parent has enough income to meet his or her own needs while still meeting the financial obligations to the child. The amount of the reserve depends on the current year’s set rate and the number of children the individual has. It only applies in low-income situations.
The goal when calculating child support is to ensure both parents contribute to the financial needs of the child. The law attempts to make it a fair system that holds each of them responsible for this parental obligation.