Rule 501 – Reasonable Earning Capacity

May 15, 2021 | Delaware, Family Law

(a) General.– In determining each parent’s ability to pay support the Court considers the health, income and financial circumstances, and reasonable earning capacity of each parent, the manner of living to which the parents had been accustomed as a family unit and the general equities inherent in the situation.
(b) Actual income.– A parent employed at least 35 hours per week in a manner commensurate with his or her training, education and experience shall be presumed to have reached his or her reasonable earning capacity.
(c) Documented Part-Time Employment.– A parent with documented earnings representing an average of fewer than 35 hours per week at employment otherwise commensurate with his or her training and experience shall be imputed the number of hours reasonably available either with parent’s current employer or through similar employment but not less than 35 hours per week unless:

(1) The parent has medical limitations;
(2) More substantial employment has proven unavailable despite diligent efforts;
(3) Upon consideration of available hours and rates of pay, available full-time employment would not produce greater total earnings; or
(4) A child of the union has profound special needs inhibiting the support recipient’s ability to maintain employment.
(d) Imputed Income. — Unemployment or underemployment that is either voluntary or due to misconduct, failure to provide sufficient documentation, or failure to appear for a hearing or mediation conference shall cause reasonable earning capacity to be imputed. In determining whether actual employment is commensurate with training and experience and when imputing income, the Court shall consider each parent’s assets, residence, employment and earnings history, job skills, educational attainment, literacy, age, health, criminal record and other employment barriers, record of seeking work, as well as the local job market, the availability of employers willing to hire the noncustodial parent, prevailing earnings level in the local community, and other relevant background factors. Except as provided in subsection (c) of this Rule, imputed income shall be calculated at not less than 40 hours of wages each week.
(e) Wage surveys. The Court may take judicial notice of occupational wage surveys compiled by the United States Bureau of Labor Statistics (BLS) and the Office of Occupational and Labor Market Information (OOLMI) in the Delaware Department of Labor to impute or corroborate reasonable earning capacity.

(1) If a parent’s reasonable earning capacity has not previously been established and the actual income expressed as an hourly wage exceeds the survey’s “Entry” level wage (average of the lowest 30%) for the parent’s occupation, then the rate of pay shall be presumed commensurate with the parent’s training and experience.
(2) For imputation purposes, analysis should begin with the median wage for each occupation, but may be adjusted up or down between “Entry” and “Experienced” (average of the highest 70%) based upon the totality of the circumstances.
(f) Minimum Income.- In any instance not governed by subsections (b) or (c) of this Rule, every parent will be presumed to have a reasonable earning capacity of not less than the greater of the Federal or State statutory minimum wage at 40 hours per week (173.33 hours per month). As related to this subsection, when using the State statutory minimum wage, the Court will not utilize the statutory training wage or youth wage.
(g) Unemployment.– A person who receives unemployment compensation shall be presumed to have been terminated from employment involuntarily and without cause.Termination without receipt of unemployment compensation shall be presumed voluntary or for cause. Continued unemployment or underemployment in excess of 6 months shall be presumed voluntary.
(h) Involuntary unemployment. — If a parent’s unemployment or underemployment is found by the Court to be involuntary and not for misconduct, then the parent’s reasonable earning capacity shall be presumed the greater of:

(1) One-half of the parent’s previous reasonable earning capacity;
(2) Any Unemployment Compensation received; or
(3) Minimum Income pursuant to subsection (f) of this Rule.
(i) Disability.– When a person has been determined to be eligible for Social Security Disability Income (SSDI) or Supplemental Security Income (SSI), this determination shall be substantive evidence of a disability. Whether a person has the ability to provide support or to earn additional income shall be determined upon consideration of the nature and extent of the disability, cash and other resources available and the totality of the circumstances. A parent who receives SSI shall not be imputed income or assessed a child support obligation unless the parent has income or an earning capacity independent of his or her SSI entitlement.
(j) Earnest re-employment.– Parents who suffer a loss of income either voluntarily or due to their own misconduct may have their support obligation calculated based upon reduced earnings after a reasonable period of time if the parent earnestly seeks to maximize earning capacity.
(k) Incarcerated parents.– Service of a term of incarceration that exceeds 180 days of continuous confinement may be considered as evidence of a diminished earning capacity unless the individual:

(1) Has independent income, resources or assets with which to pay an obligation of support consistent with his or her pre-incarceration circumstances; or
(2) Is incarcerated for the nonpayment of child support or for any offense of which his or her dependent child or a child support recipient was a victim.
(l) Second Jobs. — Employment is “secondary” if the parent’s primary employment is substantially full time and consistent with the parent’s reasonable earning capacity. Whether income from secondary employment is included in the determination of support is determined on a case-by-case basis and:
(1) Existing secondary employment income is more likely to be included if it:

(i) Was historically earned especially when or if the parents resided together and significantly enhanced the family’s standard of living;
(ii) Substantially raises the standard of living of the parent or the parent’s household to an extent not shared by the child or children before the court; or
(iii) Is necessary to meet the minimum needs of the child or children before the court; and
(2) Existing second employment income is more likely to be excluded if it:

(i) Merely allows the parent to “make ends meet” especially with regard to the needs of other dependent children;
(ii) Is used to pay extraordinary medical or educational expenses (including those of an emancipated child) or to service extraordinary indebtedness;
(iii) Is necessary because the other parent of the child or children before the court is not providing adequate support; or
(iv) Substantially conflicts with the parent’s contact with the child or children before the court.
(3) Fluctuating income and the 40-hour work week. All income from primary employment is included in determining child support. The fact that income may fluctuate or that wage income may exceed 40 hours per week is not a basis for exclusion from income. Where income fluctuates, the Court must determine average monthly income likely to prospectively recur.
(4) Forsaken second jobs and overtime. To leave a second job or to decline prospective overtime without just cause is not a substantial change of circumstance for the purpose of a modification within two and one-half years. However in the context of a new support petition or a modification beyond two and one-half years, previously earned second job income or overtime will not be attributed to a parent as long as that parent’s actual income is substantially full-time and consistent with reasonable earning capacity.
(m) Financial report. –

(1) Failure to submit a Financial Report Form pursuant to Rule 16(a) with adequate supporting documentation risks dismissal or an adverse outcome. Adequate supporting documentation commonly includes but is not limited to each parent’s most recent tax returns, W-2 Forms, three most recent pay stubs, documentation of payments from Social Security, Unemployment Compensation, Worker’s Compensation, a recent physician’s statement as to any claimed disability, and receipts for child care payments and private school costs.
(2) Individuals with self-employment income shall include all schedules and forms required to be filed with the tax return with corroborating documentation for significant expense categories and, to the extent that tax returns do not reflect current earnings or income, other reliable documentation of that income (such as recent bank statements).
(3) Individuals receiving income from a business organization in which they are a partner or significant shareholder also shall include the organization’s tax return and supporting schedules and forms, and to the extent that tax returns do not reflect the organization’s current earnings or income, other reliable documentation of that income (such as recent bank statements).

Del. Fam. Ct. R. Civ. P. 501

Amended eff. January 1, 2011; amended January 28, 2015, eff. April 20, 2015; amended November 8, 2018, effective February 1, 2019.