Answer

A question that often rises when calculating child support is...What is considered income? Since all models of calculating child support focus heavily on the income, determining what is actually income can become somewhat of a game. Over the years parents have attempted to manipulate how income is received in order to have in not fall under the classification guidelines established by the state. As time has passed each state has gotten smarted and has clearly defined exactly what is to be considered income and what should not.

In this situation, the cost-of-living increase should probably not be considered as income when calculating child support. The cost of living allowance is only temporary and since it is an adjustment made to compensate for a difference economic environment, the payor is actually not reaping any financial rewards from the allowance.

If the payor has received other types of rewards for making the transfer, like a company car or a furnished rent-free apartment, these types of incentives can be recognized as income, because they are essentially decreasing the payors monthly expenses, hence making more incom available.

New Mexico State Guidelines for Determining Income:

(1) "income" means actual gross income of a parent if employed to full capacity or potential income if unemployed or underemployed. Income need not be imputed to the primary custodial parent actively caring for a child of the parties who is under the age of six or disabled. If income is imputed, a reasonable child care expense may be imputed.

The gross income of a parent means only the income and earnings of that parent and not the income of subsequent spouses, notwithstanding the community nature of both incomes after remarriage; and

(2) "gross income" includes income from any source and includes but is not limited to income from salaries, wages, tips, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workers' compensation benefits, unemployment insurance benefits, disability insurance benefits, significant in-kind benefits that reduce personal living expenses, prizes and alimony or maintenance received, provided:

(a) "gross income" shall not include benefits received from means-tested public assistance programs or child support received by a parent for the support of other children;

(b) for income from self-employment, rent, royalties, proprietorship of a business or joint ownership of a partnership or closely held corporation, "gross income" means gross receipts minus ordinary and necessary expenses required to produce such income, but ordinary and necessary expenses do not include expenses determined by the court to be inappropriate for purposes of calculating child support;

(c) "gross income" shall not include the amount of alimony payments actually paid in compliance with a court order;

(d) "gross income" shall not include the amount of child support actually paid by a parent in compliance with a court order for the support of prior children; and

(e) "gross income" shall not include a reasonable amount for a parent's obligation to support prior children who are in that parent's custody. A duty to support subsequent children is not ordinarily a basis for reducing support owed to children of the parties but may be a defense to a child support increase for the children of the parties.

ON-LINE RESOURCES

New Mexico Child Support Guidlines
http://www.state.nm.us/hsd/csguidelines.html

FAQS About New Mexico Child Support
http://www.state.nm.us/hsd/FAQS.html

Federal Office of Child support Enforcement
http://www.acf.dhhs.gov/programs/cse/index.html

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