Unemployment compensation, workers’ compensation, and other types of income

As part of the court’s determination of net income for purposes of setting an award for child support, the court, under IMDMA §505(a)(3), considers unemployment compensation as well as workers’ compensation awards within the scope of the statutory definition of “net income.” Section 28(d) of the Income Withholding for Support Act includes a definition of income slightly different from (and more detailed than) the one in IMDMA §505(a)(3):

“Income” means any form of periodic payment to an individual, regardless of source, including, but not limited to: wages, salary, commission, compensation as an independent contractor, workers’ compensation, disability, annuity, pension, and retirement benefits, lottery prize awards, insurance proceeds, vacation pay, bonuses, profit-sharing payments, interests, and any other payments, made by any person, private entity, federal or state government, any unit of local government, school district or any entity created by Public Act.

Section 28(d) also lists allowable exclusions, which overlap with but are not entirely the same as the deductions listed IMDMA §505(a)(3).

In In re Marriage of Dodds, 222 Ill.App.3d 99, 583 N.E.2d 608, 610, 164 Ill.Dec. 692 (2d Dist. 1991), the court found that a post-judgment (and hence non-marital) lump-sum settlement workers’ compensation award that the father received was net income available to be apportioned for child support within the meaning of IMDMA §505(a)(3). Dodds also involved a discussion of, but no ruling on, social security benefits in the context of child support. In a similar case, the court allowed support to be ordered paid from a workers’ compensation award, noting, however, that the final award, which remained speculative at the time of the hearing, had properly not been included in the calculation as too speculative. In re Marriage of Brand, 123 Ill.App.3d 1047, 463 N.E.2d 1037, 1040, 79 Ill.Dec. 483 (4th Dist. 1984), said:

[W]e are satisfied the legislature intended that a recipient use compensation benefits for the current expenses of the worker’s family, and this is all the [trial] court was order him to do [in assessing child support from the award].

See also In re Marriage of Hobson, 220 Ill.App.3d 1006, 581 N.E.2d 388, 163 Ill.Dec. 437 (4th Dist. 1991), which found that the evidence supported establishing a trust fund for child support out of the father’s share of certain equity property as well as income from an award received in a workers’ compensation settlement.

An allowance paid to the obligor spouse by reason of his employment as an active member of the United States armed forces was includible in his income for purposes of calculating support under IMDMA §505. In re Marriage of McGowan, 265 Ill.App.3d 976, 638 N.E.2d 695, 698, 202 Ill.Dec. 827 (1st Dist. 1994). McGowan reasoned that the term “net income” in §505(a)(3) is an all-inclusive term that must be given effect to include military allowances in the computation of child support.

Moreover, in In re Marriage of Winne, 239 Ill.App.3d 273, 606 N.E.2d 777, 784, 179 Ill.Dec. 945 (2d Dist. 1992), it was error to exclude entirely the husband’s pre forma capital account for purposes of calculating child support under IMDMA §505. The father was a partner in a public accounting firm that maintained a capital account composed of the father’s distributive share of the firm’s annual performance.

For an overview citing a list of cases in which sums of money have been held to be “income” for child support purposes, see Illinois Department of Public Aid ex rel. Jennings v. White, 286 Ill.App.3d 213, 675 N.E.2d 985, 221 Ill.Dec. 561 (3d Dist. 1997). In this case, the father received a $200,000 settlement for an injury suffered while employed by a railroad. He failed to provide information as a breakdown of the settlement, i.e., what portion was for lost wages and what portion was for pain and suffering and permanency. The trial court found that approximately $129,000 was income for child support purposes and then deviated below the guidelines and ordered the father to pay 15 percent of the award to the IDPA and the mother. When the father appealed, the appellate court affirmed that after deducting attorneys’ fees, costs, bills, and mandatory retirement contributions, the remainder was properly considered income subject to §505. Additionally, the appellate court rejected the father’s argument that a loan he borrowed to provide living expenses be deducted from the gross settlement because the loan did not qualify as deduction allowable under §505.

Payments from a firefighter’s disability pension should have been included in the payor’s income for purposes of determining his child support obligation. People ex rel. Myers v. Kidd, 308 Ill.App.3d 593, 720 N.E.2 1125, 242 Ill.Dec. 170 (5th Dist. 1999). The court reaffirmed that the Internal Revenue Code definition of “income” for tax purposes is not dispositive of the definition of “income” for child support purposes. Furthermore, while the funds were exempt from garnishment while in the hands of the administrator pursuant to the applicable section of the Illinois Pension Code, they were not protected once in the hands of a payee subject to a valid support order.

In re Marriage of Crossland, 307 Ill.App.3d 292, 717 N.E. 2d 549, 240 Ill.Dec. 456 (3d Dist. 1999), held in an apparent case of first impression that per diem received by the husband from his employer in connection with his work as an over-the-road truck driver was part of his “net income” for purposes of determining support even though the amount received as per diem was deductible for federal tax purposes.

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