Sometimes a noncustodial parent pleads poverty because in setting child support, a court has imputed his income. In general, for purposes of child support, courts consider the earning capacities of the parties, not their actual income. When one party contends he or she cannot work or no longer has the income he or she had, the opposing spouse then argues that the income should be imputed, or attributed, for child support purposes. This can be argued by demonstrating that the person has the ability to work and that the unemployment is elective.
Courts impute income in two ways -- the first, called as a matter of fact, and the second, as a matter of law. In the first, the court limits itself to the actual earnings a party reports; in the second, it considers the actual earning power of the party.
Imputed income turns on the rationale that children have a right to income that would have been provided had they paid "diligent attention" to his or her career, occupation or profession. For example, the courts may impute a certain income level to a brain surgeon who for whatever reason abandons his career to become a street musician. The rationale behind the imputation of income is that no one should be allowed to escape obligations by taking actions that make the fulfillment of such obligations impossible. Courts see elective unemployment or underemployment as evidence of bad faith.
Anecdotal evidence suggests that some deadbeat dads and moms go to heroic lengths to avoid paying. According to child support experts, deadbeats use a variety of ways to hide assets and thus avoid payment. A few of the support evasion tactics include placing assets in someone else's name; using shell corporations to hide assets; working under the table in the grey market economy; taking a low-paying job; and of course, moving to a different state.