Is there any law saying the all in-kind benefits must be reported as income for child support calculation?
<p>I’m a fully employed divorced person living in Arkansas. My ex-spouse is unemployed, however, he’s getting his rent paid by some organization, and all other fees paid by someone else. My ex-spouse failed to report in-kind benefits, such as his rent being paid by someone else, cash grants, etc. He is getting all that support and failed to disclose it. This impacted the child support, and the money I’m paying is way higher than it should be, had he reported the in-kind benefits properly. Question: Is there any law saying that failure to report in-kind benefits is a violation? Also his attorney was fully aware of all those in-kind benefits. Did his attorney commit a misconduct?</p>

<p>Child support in Arkansas is governed by <a href="https://opinions.arcourts.gov/ark/ao/en/item/16691/index.do#!fragment/zoupio-_Toc115953751/BQCwhgziBcwMYgK4DsDWszIQewE4BUBTADwBdoAvbRABwEtsBaAfX2zgEYOBWATm4DMAdm4cAlABpk2UoQgBFRIVwBPaAHJ1EiHFzYANvoDCSNNACEybYTC4Ei5Ws3XbCAMp5SAITUAlAKIAMv4AagCCAHJG-hKkYABG0KTsYmJAA" rel="nofollow noreferrer">Order 10</a> at the link and the relevant definition is the definition of &quot;Gross Income&quot;.</p>
<blockquote>
<p>My ex-spouse is unemployed, however, he’s getting his rent paid by
some organization, and all other fees paid by someone else. My
ex-spouse failed to report in-kind benefits, such as his rent being
paid by someone else, cash grants, etc. Question: Is there any law
saying that failure to report in-kind benefits is a violation?</p>
</blockquote>
<p>Generally, income does not include gifts, charity, or welfare benefits, only what one &quot;earns&quot; from employment, self-employment, or investment of assets. It does include in kind earnings from employment, self-employment, or property investments.</p>
<p>But, if someone is unemployed and receives family or charitable or government assistance, this generally does not count as income for child support purposes.</p>
<p>Order 10 states in the pertinent parts:</p>
<blockquote>
<p>Section III.  Gross Income</p>
<pre><code>        Definitions:
</code></pre>
<p>“Income” means the actual gross income of the parent, if employed to
full capacity, or potential income if unemployed or underemployed as
allowed under Section III.7.  Gross income is used to avoid disputes
over issues of deductibility that would arise if a net income was
used.</p>
<p>These Guidelines presume that the parent with the legal obligation to
pay support will file federal taxes as a single individual and have
only one state exemption.  Adjustments have been made in the Chart for
federal and state income taxes, FICA, and average child-rearing
expenditures (for example, out-of-pocket medical expenses of $250.00
per child per year).</p>
<p>The monthly child-support amount shall be converted to coincide with
the payor’s receipt of salary, wages, or other income.  For purposes
of computing gross monthly income, a month is 4.334 weeks.  Bi-weekly
means a party is paid once every two weeks, or 26 times during a
calendar year.  Semi-monthly means a person is paid twice a month, or
24 times per calendar year.</p>
<p>“Child Support Gross Income” means gross income—minus amounts for
preexisting child-support obligations paid to another who is not a
party to the proceedings and on behalf of a child who is not the
subject of the action of the court.  Child support arrearage payments
shall not be considered in determining a payor’s gross income.</p>
<p>“Combined Gross Income” means the combined gross income of both
parties.</p>
<ol>
<li>
<pre><code> Gross Income Inclusions:
</code></pre>
</li>
</ol>
<p>“Income” is “intentionally broad and designed to encompass the widest
range of sources consistent with the State’s policy to interpret
‘income’ broadly for the benefit of the child.”  Evans v. Tillery, 361
Ark. 63, 204 S.W.3d 547 (2005); Ford v. Ford, 347 Ark. 485, 65 S.W.3d
432 (2002); McWhorter v. McWhorter, 346 Ark. 475, 58 S.W.3d 840
(2001); Davis v. Office of Child Support Enforcement, 341 Ark. 349, 20
S.W. 3d 273 (2000).</p>
<p>Gross income includes, but is not limited to, the following:</p>
<p>i.        Wages, overtime pay, commissions, regularly-received
bonuses, or other monies from all employers or as a result of any
employment (as usually reported in the Medicare, wages, and tips
section of the parent’s W-2).</p>
<p>ii.      Earnings generated from a business, partnership, contract,
self-employment, or other similar arrangement, or from rentals.</p>
<p>(a)          Income (or losses) from a corporation should be carefully
examined to determine the extent to which they were historically
passed on to the parent or used merely as a tax strategy.</p>
<p>iii.    Distributed profits or payments from profit-sharing, a pension
or retirement, an insurance contract, an annuity, trust fund, deferred
compensation, retirement account, social security disability payments,
social security retirement payments, unemployment compensation,
supplemental unemployment benefits, disability insurance or benefits,
or worker’s compensation.</p>
<p>(a)          Consider insurance or other similar payments received as
compensation for lost earnings, but do not include payments that
compensate for actual medical bills or for property loss or damage.</p>
<p>(b)         If a parent receives payments from an IRA, defined
contribution, or deferred compensation plan, income does not include
contributions to that account that were previously considered as the
parent’s income used to calculate an earlier child-support obligation
for a child in this case.  To the extent that the funds received are
equivalent to the amount of the funds contributed by the parent while
paying child support, that amount should be excluded from the
computation of gross income.</p>
<p>(c)          Social Security auxiliary benefits paid to children
because of a parent’s disability shall be income to the disabled
parent.  If either parent receives auxiliary benefits because of a
spouse or children unrelated to the case before the court, that
payment shall not be included as income.</p>
<p>iv.     Military specialty pay, allowance for quarters and rations,
housing, veterans’ administration benefits, G.I. benefits (other than
education allotment), or drill pay.</p>
<p>(a)          If the servicemember receives housing pay and supports
another home (i.e. second residence), housing pay is not considered
income to the individual.</p>
<p>v.       Tips, gratuities, royalties, interest, dividends, fees, or
gambling or lottery winnings.</p>
<p>vi.     Capital gains to the extent that they result from recurring
transactions.</p>
<p>vii.   The standard (basic needs) portion of adoption subsidies for
children in the case under consideration (do not consider the medical
needs and intensive rate portion of the subsidy, nor the family
support subsidy as income).</p>
<p>viii. Any money or income due or owed by another individual, source of
income, government, or other legal entity.</p>
<p>ix.     I<strong>ncome also includes the market value of perquisites (perks)</strong>
<strong>received as goods, services, or other noncash benefit for which the</strong>
<strong>parent did not pay, if they reduce personal expenses, and have</strong>
<strong>significant value or are received regularly.</strong></p>
<p>(a)          <strong>Common forms of perquisites (perks) or goods and services</strong>
<strong>received in-kind include, but are not limited to, the following:</strong>
h<strong>ousing, meals, or room and board, personal use of a company business</strong>
<strong>vehicle or mileage reimbursement, including use between home and</strong>
<strong>primary worksite, and other goods or services.</strong></p>
<p>(b)         <strong>Perquisites (perks) do not include money paid by an</strong>
<strong>employer for benefits like tuition reimbursement, educational cost</strong>
<strong>reimbursement, uniforms, and health savings account (HSA)</strong>
<strong>contributions.</strong></p>
<p>x.       The court may consider assets available to generate income
for child support.  For example, the court may determine the
reasonable earning potential of any asset at its market value and
assess against it the current Treasury bill interest rate or some
other similar appropriate method of computing income.</p>
<p>To further this State’s policy of interpreting “income” broadly for
the benefit of children, a support order may include as its basis a
percentage of a bonus to be paid in the future.  The child support
attributable to a bonus amount (or another one-time source of money)
shall be in addition to the periodic child-support obligation.  This
child-support obligation shall terminate when the underlying
child-support obligation terminates. Variable income such as
commissions, bonuses, overtime pay, military bonuses, and dividends
shall be averaged by the court over a reasonable period of time
consistent with the circumstances of the case and added to a parent's
fixed salary or wages to determine gross income.  When income is
received on an irregular, nonrecurring, or one-time basis, the court
may, but is not required to, average or prorate the income over a
reasonable specified period of time or require the parent to pay as a
one-time support amount a percentage of his or her nonrecurring
income.</p>
<p>One-time sources of money like an inheritance, gambling or lottery
winning, or liquidating a Certificate of Deposit, for example, is
income for these Guidelines purposes (as detailed in the previous
paragraph).  If the receipt of an asset is not sold or otherwise
disposed of, however, then it has not “realized a gain” and therefore
is not income under these Guidelines.</p>
<ol start="2">
<li>
<pre><code> Income from Self-employment, Business Owners, Executives, and Others
</code></pre>
</li>
</ol>
<p>a.           Difficulty in determining income for self-employed
individuals, business owners, and others occurs for several reasons
including:</p>
<p>i.            These individuals often have types of income and
expenses not frequently encountered when determining income for most
people.</p>
<p>ii.           Taxation rules, business records, and forms associated
with business ownership and self-employment differ from those that
apply to individuals employed by others.  Common business documents
reflect policies unrelated to an obligation to support one’s child.</p>
<p>iii.          Due to the control that business owners or executives
exercise over the form and manner of their compensation, a parent, or
a parent with the cooperation of a business owner or executive, may
arrange compensation to reduce the amount visible to others looking
for common forms of income.</p>
<p>b.           To determine monies that a parent has available for
support, it may be necessary to examine business tax returns, balance
sheets, accounting or banking records, and other business documents to
identify additional monies a parent has available for support that
were not included as personal income.  At a minimum, a self-employed
parent shall provide their two most recent years of state and federal
tax returns.  The parent should provide three years of tax returns
when there is a reduced, deferred, or elective income situation.
Unless otherwise prohibited by law, the court may award expert witness
fees when necessary to determine self-employed parent’s income.</p>
<p>c.           For income from self-employment, proprietorship of a
business, or ownership or a partnership or closely held corporation,
gross income is defined as gross receipts minus ordinary and necessary
expenses required for self-employment or business operation, including
an employer’s share of FICA.  However, the court should exclude from
those expenses amounts allowed by the Internal Revenue Service for
accelerated depreciation of investment tax credits for purposes of
these Guidelines and add those amounts back in to determine gross
income.  In general, the court should carefully review income and
expenses from a parent’s self-employment or operation of a business to
determine actual levels of gross income available to the parent.  The
court’s duty is to accurately determine a child-support obligation in
every case. This amount may differ from the determination of business
income for tax purposes.</p>
<p>d.          Whether organized informally, or as a corporation, a
partnership, a sole proprietorship, or other arrangement or entity,
these considerations apply to all forms of self-employment and
business ownership, as well as to business executives and others who
may receive similar forms of compensation.</p>
<p>e.           For purposes of this subsection, income includes amounts
that were not otherwise included as income elsewhere in this chapter.
Special attention shall be given to the following forms of
compensation:</p>
<p>i.            Distributed profits, profit sharing, officers’ fees and
other compensation, management or consulting fees, commissions, and
bonuses.</p>
<p>ii.           <strong>In-kind income or perquisites (perks), gifts, free</strong>
<strong>admission to entertainment, or personal use of business property.</strong>  <strong>The</strong>
<strong>value of these items must be based on a fair-market price, that is,</strong>
<strong>the price a person not affiliated with the business would pay.</strong>
<strong>In-kind payments received by a parent from self-employment, or the</strong>
<strong>operation of a business is income if the payments are significant and</strong>
<strong>reduce personal living expenses.</strong></p>
<p>f.           Redirected income, or amounts treated by the business or
company as if the redirected amounts were something other than the
parent’s income.  Amounts include, but are not limited to, the
following:</p>
<p>i.            Personal loans.  Presume personal loans from a business
are in fact redirected income, unless all the following are true: (1)
the parent signed a contract or promissory note outlining the terms of
the loan, (2) the business maintains records showing the loan owed as
a receivable, (3) the parent makes installment payments and the
present loan is paid current, and (4) the interest earned and
repayment rate appear to be a reasonable business practice. Unless the
presumption is overcome by a preponderance of the evidence, then a
parent’s income includes the difference between the amount the parent
repays and a repayment amount for a similar commercially available
unsecured personal loan.</p>
<p>ii.           Payments made to friends or relatives of the parent.  If
the business cannot demonstrate that the payments are equivalent to a
fair market value payment for the work or services the friend or
relative performs, then include any amount that exceeds the
fair-market value as the parent’s income.</p>
<p>g.         Reduced or deferred income.  Because a parent’s
compensation can be rearranged to hide income, determine whether
unnecessary reductions in salaries, fees, or distributed profits have
occurred by comparing amounts and rates to historical patterns.</p>
<p>i.          Unless the business can demonstrate legitimate reasons for
a substantial reduction in the percentage of distributed profits, use
a three-year average to determine the amount to include as a parent’s
income.</p>
<p>ii.         Unless a business can demonstrate legitimate reasons for
reductions (as a percentage of gross business income) in salaries,
bonuses, management fees, or other amounts paid to a parent, use a
three-year average to determine the amount to include as a parent’s
income.</p>
<p>h.         Business income subject to elective treatment.  Income that
is subject to elective status (for example, retained income) may be
considered as income after the court considers the circumstances and
history of the elective treatment, which includes but is not limited
to the status prior to the implementation of the support order.  If a
change in the status was made after the original election, then a
court can either choose to include the income in child-support
calculations or not include it in the calculations.</p>
<p>i.          Deductions for Tax Purposes.  For a variety of historical
and policy reasons, the government allows considerable deductions for
business-related expenses before taxes are calculated. Those same
considerations are not always relevant to monies a parent should have
available for child support.  Therefore, some deductions should be
added back into a parent’s income for purposes of determining child
support.  The deductions include, but are not limited to, the
following:</p>
<p>i.          Rent paid by the business to the parent, if it is not
counted as income on that parent’s personal tax return.</p>
<pre><code>                   ii.          Real estate depreciation shall always be added back into a parent’s income when calculating support.

                   iii.         Depreciation figured at a straight-line (not accelerated) rate on a parent’s (not a
</code></pre>
<p>corporation’s or partnership’s) tangible personal property, other than
for personal vehicles or home offices, shall be deducted from income.
Any parent who uses accelerated depreciation for tangible personal
property may deduct the value of the straight-line depreciation amount
for property other than personal vehicles or home offices, if the
parent proves what the straight-line amounts would have been.</p>
<pre><code>                   iv.         Home office expenses, including rent, hazard insurance, utilities, repairs, and maintenance.

                   v.          Entertainment expenses spent by the parent.  Legitimate expenses for customers’ entertainment may be
</code></pre>
<p>treated as deductions.</p>
<pre><code>                   vi.         Travel expense reimbursements, except where such expenses are inherent in the nature of the business
</code></pre>
<p>or occupation (for example, a traveling salesperson), and do not
exceed the standard rates allowed by the State of Arkansas for
employee travel.</p>
<pre><code>                   vii.        Personal automobile repair and maintenance expenses.
</code></pre>
<ol start="3">
<li>
<pre><code> Gross Income Exclusions:
</code></pre>
</li>
</ol>
<p><strong>Gross income does not include benefits received from means-tested</strong>
<strong>public assistance programs, such as Temporary Assistance to Needy</strong>
<strong>Families (TANF), Supplemental Security Income (SSI) received for self</strong>
<strong>or any child; Food Stamps and General Assistance; income derived by</strong>
<strong>other household members; child support, adoption subsidy payments, and</strong>
<strong>foster care board payments received for other children not involved in</strong>
<strong>the case.</strong> . . .</p>
<ol start="7">
<li>Income Verification:</li>
</ol>
<p>The Affidavit of Financial Means and Worksheet shall be used in all
family-support matters. Each party shall exchange the Affidavit of
Financial Means and Worksheet at least three days before a hearing to
establish or modify a support order.  The Worksheet shall be filed in
the court file and attached to the order that includes the
child-support award.  The Affidavit of Financial Means shall not be
filed in the court file.</p>
<p>A court may rely on suitable documentation of current earnings,
preferably for at least one month.  Suitable documentation includes,
but is not limited to, pay stubs, employer statements or
verifications, and receipts and expenses if the parent is
self-employed.</p>
<p>Verification of current earnings, whether they are reflected on the
Affidavit of Financial Means or not, can be supported with copies of
the most recent federal and state tax returns that a parent has filed.</p>
<p>Income can also be verified through the Department of Workforce
Services or through the Department of Finance and Administration.</p>
<ol start="8">
<li>Income Imputation Considerations:</li>
</ol>
<p>If imputation of income is ordered, the court must take into
consideration the specific circumstances of both parents, to the
extent known, including such factors as the parents’ assets,
residence, employment and earnings history, job skills, educational
attainment, literacy, age, health, criminal record and other
employment barriers, and record of seeking work, as well as the local
job market, the availability of employers willing to hire the parent,
prevailing earnings level in the local community, and other relevant
background factors in the case.</p>
<p>There is a rebuttable presumption that the payor and the payee can
work full-time or earn full-time income, and the court may calculate
child support based on a determination of potential income that would
otherwise ordinarily be available to the parties.</p>
<p>The court may consider a disability or the presence of young children
or disabled children who must be cared for by the parent as being a
reason why a parent is unable to work.</p>
<p><strong>Although Temporary Assistance to Needy Families (TANF) and other</strong>
<strong>means-tested public assistance benefits are not included in gross</strong>
<strong>income, income may be imputed to these recipients.</strong></p>
<p>In addition to determining potential earnings, the court may impute
income to any non-income producing assets of either parent, if
significant, other than a primary residence or personal property.
Examples of such assets are vacation homes (if not maintained as
rental property) and idle land.  The current rate determined by the
court is the rate at which income may be imputed to such nonperforming
assets.</p>
</blockquote>
<p>With regard to the second question:</p>
<blockquote>
<p>Also his attorney was fully aware of all those in-kind benefits. Did
his attorney commit a misconduct?</p>
</blockquote>
<p>It doesn't appear that any the things described in the question had to be reported.</p>

divorce child-support arkansas