TN Dad’s Income Down from $700K to $350K May Get Lowered Child Support

Tennessee child support law case law summary on income determination from the Court of Appeals.

THOMAS JAMES MILAM, JR. v. DONNA LISA VINSON MILAM – Tennessee Child Support Obligation – All Sources of Income

Donna Lisa Vinson Milam, the mother and Thomas James Milam, Jr., the father, had two minor children when they divorced in 1997.  The mother was named the primary residential parent and the father was ordered to pay $4,500 in monthly child support.   In June, 2010 the father filed for modification of child support and asked that his monthly payments be lowered from $4,500 per month to $2,182 per month as a result of a decrease in his monthly income.   In January 2011, the trial court ruled that the father’s child support obligation should be reduced to $2,500.  The mother filed an appeal.

On appeal, the court reviewed the Tennessee law which permits modification of child support.   For cases tried before 2005, like this case, the Child Support Guidelines  require a “significant variance” of at least a 15% change in the gross income of the non-residential parent.  The appeals court agreed with the trial court that since the father’s income had decreased from $700,000 a year in 1997 to $350,000 per year for the following three years, there was a significant variance in his income.

The appeals court then examined whether the lower court had calculated the parents’ incomes correctly, in order to determine if the father’s child support payments were accurate.  The Guidelines permit a court to impute additional income for a parent if the court determines that she is “willfully and/or voluntarily underemployed.”  The appeals court agreed with the lower court that the mother’s income was lower than she was capable of earning and could increase her income from $35,000 per year to $50,000 per year as a registered nurse because the mother herself testified that she had previously had a job earning $50,000 as a nurse.   The mother was imputed to have a yearly income of $50,000.

When calculating the father’s income, the appeals court considered all sources of income, the amount of time he gave to parenting and his medical insurance payments.   The Guidelines state that a person’s child support obligation is based on all sources of income, including wages, salaries, earnings from self-employment, severance pay and more.  The trial court erroneously considered only the father’s severance pay to determine his 2010 income and did not include his earnings as a part-time lobbyist and his remuneration for unused vacation days.  As a result, the appeals court raised the father’s annual income from $281,000 to over $298,000.

The appeals court also found that the father had 120 days of parenting time and not 162 days, as the lower court determined.  The correction was made based on the father’s own testimony.  His initial child support worksheet in his Petition for Modification listed 120 days, but he offered additional worksheets during trial which listed parenting time at 162 days.  The father admitted that the second sheet was incorrect.

The court also considered the father’s health insurance premiums.  Here too there was a discrepancy between the amount listed in the worksheet submitted with the petition ($164) and the amount submitted at trial ($250), but the court held that there was no evidence to support the mother’s contention “that the insurance premium remained $164 at the time of trial.”  The court therefore held according to the higher health insurance payments.

Based on these findings by the appeals court, the case was sent back to the trial court to recalculate the father’s child support obligation.

No. M2011-00715-COA-R3-CV (Tenn. Ct. App. May 17, 2012).

See original opinion for exact language.  Legal citations omitted.

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