How Can a Personal Injury Settlement Affect Child Support Obligations?
Generally speaking, a personal injury award is considered income for the purposes of child support. There can be differences in how this is treated depending on whether the settlement occurs before or after a child support order is entered by the court.
Injury Award Before Support Order:
If you are injured in an a car accident or other catastrophic event prior to entry of a child support order, the award may be considered income for the purposes of establishing child support. Personal injury settlements are meant to place the injured party in the same position they would be in had the injury not occurred. This essentially means that the award, which may include attorney’s fees, medical bills, lost income, and pain and suffering, is viewed as a monetary award in lieu of, not in addition to, the wages earned by the injured party. There have even been cases where the pain and suffering portion of the settlement award was included as income and applied to the child support obligation. It may be prudent to discuss the specific child support ramifications of any personal injury settlement with an experienced personal injury or car accident attorney who can advise you based on the laws of your state.
Injury Award After Support Order:
If you are injured after a court has issued a child support order, the settlement may still be considered part of your income. The reasoning is based on the settlement accurately reflecting the amount of lost wages and other expenses you may have incurred due to the injury. In the ideal situation, the compensation should match the personal expense you incurred as a result of your accident. However, there are some situations wherein a large award may be considered a material change in circumstances, which can establish the burden to modify an existing order. It may be wise to discuss these potential outcomes with a seasoned lawyer who may be able to discuss the ramifications of your unique circumstance.
Models of Child Support:
The vast majority of states use an income shares model to calculate support (though there are a handful of jurisdictions that utilize different models). An income shares model attempts to set a child support amount that reflects what percentage of the parent’s income the child would receive if the parents were still living together. This is based both on the principle that a parent is financially responsible for their children, and the principle that courts will do whatever is in the best interests of the children
It can be challenging to adequately consider the many determining factors involved in negotiating a personal injury settlement or calculating income for the purposes of child support. An experienced and professional attorney may be able to help guide you through either of these difficult obstacles and work in concert with other experts to help ensure your financial future.
Thanks to our friends and contributors at Cohen & Cohen, P.C. for their additional insight into the effects of a personal injury claim on child support obligations.