§1.09 Fluctuating Income

Sometimes a parent's income is unpredictable because he or she is in a trade dependent on the weather or seasonal work. This category includes those who are in construction, agriculture, recreation, or sales positions. In these cases you are guided by FC §4060, which allows for averaging or otherwise adjusting the annual income.

It may be necessary to calculate income over more than one year. Under FC §4060 you may:

• Compute monthly net disposable income by dividing annual net disposable income by 12, or
• Adjust the amount if the monthly net disposable income figure does not accurately reflect the parties' actual or prospective earnings at the time you determine support.

Thus, your order may be based on reported income from previous years. You may also adjust child support as appropriate to accommodate the seasonal or fluctuating income of either parent. [FC §4064.]

In these cases, you are trying to predict likely income for the immediate future, as distinct from extraordinarily high or low income from the past. The time period on which income is calculated must be long enough to be representative. For example, it was error to base a husband’s income, which was derived from sales commissions in the financial markets, on only the most recent two months when those months had the highest income of the year. The statutes emphasize annual income as a benchmark for calculations. [Riddle v Riddle (2005) 125 CA4th 1075, 1082-1084.]