As the saying goes, “cash is king.” Father’s with big child support obligations often find themselves foregoing regular W2 jobs for jobs that pay cash. These fathers are then able to avoid both taxes and child support. Depending on the child support obligation and the tax rate, these fathers may, selfishly, be coming out ahead getting paid less than half cash what they would be paid via a payroll check. So, the only way to combat this incentive is to use the disincentives the legal system has provided.
Setting Child Support For a Father Who Is Paid In Cash
Most states’ statutes base child support on the income of the father or some formula based on the incomes of both the mother and the father. When the father’s income cannot be proven to the penny because the father is paid in cash, the court must assign the father an income for the purposes of calculating child support. This “guestimate” of what the father is really earning or should be earning is called “imputed income”.
The lowest imputed income should be the minimum wage at 40 hours a week. If the father admits to working, this is the absolute floor for his imputed income.
Beyond that, you can call the father to the stand in court and have him testify as to what he makes in cash. The father’s story better make sense or the court will pick a number for him.
While asking the father about his income, you can also ask the father about his expenses. His rent, his car payment, how much he spends going out. People who get paid in cash aren’t savers. People who get paid in cash spend every last cent they earn. So, if you can approximate the father’s spending, you can approximate his income.
You do not need to rely on the father’s testimony alone to determine the father’s testimony. The mother, who presumably was in a long-term relationship with the father at some point, probably has great insight into the father’s spending habits. There is no reason to presume those spending habits have changed since the birth of the child.
It may be tempting to subpoena, depose, or call the father’s employer as a witness for the purpose of determining the father’s child support but it will likely backfire. When you pay someone in cash, there are few, if any, human resource procedures. Getting a subpoena from a mother is likely to encourage the father to simply change jobs.
If it is truly impossible to ascertain what the father makes or if the father is even working at all, most states’ statutes allow child support to be calculated based on the needs of the child. So, the mother must calculate all of the expenses of feeding, housing, and clothing the child and ask the father for 50% of that amount.
Collecting Child Support From A Father Who is Paid in Cash
Once a child support order is entered, garnishment of that child support from a paycheck is impossible if the father works for cash.
A father who is paid in cash will always want to pay his children’s mother in cash. There is zero advantage to the mother in being paid in cash. Child support is not taxed.
Furthermore, child support payments in cash always end up being just a little short. If your child support is $ 207.50 a week, the father will surely pay you $ 200 in cash and attribute the $7.50 to “rounding down.” These fathers never round up!
So, a court order will require that the father make direct deposits or pay the mother via cashier’s check with a receipt. Most states’ laws require that the father keep receipts of child support paid…or it will be presumed he did not pay that child support. This way, the hassle of keeping track of child support payments is the burden of the father who is paid in cash.
Collecting Child Support From A Father Who Switches To A Cash Paying Job
If a child support order is already entered and the father changes careers to a new cash paying job, the father will still owe the same amount in child support that the previous order required.
The amount of child support will not change until the father files a motion to modify child support based on the job change. The father will then have to prove his income (even if it is cash) in order to modify the child support. The burden will be completely on the father to prove his new cash income.
Calculating Child Support If the Father Is Only Paid Partly In Cash
Some side jobs or businesses allow a father to collect a regular check and then receive additional income in cash. The father is usually happy to pay child support from his paycheck income but considers the cash to be his alone.
Calculating this cash amount is difficult but it has to be something significant. Otherwise, the father would not be working a second job. An estimation may be as close as you get but you will have evidence of the father’s hours at this second job because he won’t be able to exercise parenting time because he’s always working.
Cash from a business is very hard to prove. If the business is paid in cash and there are no receipts, it is almost impossible. The only way you can reliably prove this income to the court is by questioning the father about his spending habits as described above.