Is Money from My Savings Account Considered Income?

The Supreme Court in In Re the Marriage of McGrath says NO.

On May 24, 2012, the Illinois Supreme Court heard a case called In re Marriage of McGrath. In McGrath, Mary and Martin were divorced in 2007. The settlement agreement stipulated that Mary would have custody of the parties’ two children, and Marin would pay child support. The parties agreed to postpone the calculation of child support, also known as reserving the issue, because Martin was unemployed. Later, at a hearing regarding child support, the court learned that Martin was withdrawing approximately $8,500 per month from a personal savings account. Martin was still unemployed and was using the money from his personal savings account to pay for his expenses. Based on the regular withdraws from Martin’s savings account, the court held that such monies were income and should be considered in the calculation of a child support award. Martin appealed the ruling and the appellate court affirmed the ruling of the trial court that the $8,500 was considered income in the calculation of a child support award. Specifically, the appellate court held that the Act defines net income broadly to include “the total of all income from all sources. It therefore ruled that savings account withdrawals fell within the statute’s scope and found that no exception applied.
Martin filed a writ of certiorari and the Illinois Supreme Court accepted Martin’s case for review. The Supreme Court reviewed the appellate court’s ruling and disagreed. The Supreme Court held that the Act permits a court to adjust the amount of the child support if the amount calculated under the statute is deemed inappropriate. The court held that Martin’s withdrawals from his savings account were not income under the plain and ordinary meaning of the word. Martin owned the funds in the savings account and therefore, he did not enjoy a gain or recurrent benefit from withdrawing the money. Therefore, the withdrawals were not income.

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