Is Unemployment Compensation considered income?

Adding to last weeks blog, we continue to discuss the income that is considered when calculating child support.
What about if you have a capital account where your employer distributes shares of your company’s performance to you as a benefit of your employment?. In In re Marriage of Winne, 239 Ill.App.3d 273, 606 N.E.2d 777, 784, 179 Ill.Dec. 945 (2d Dist. 1992), it was error to exclude entirely the husband’s pro forma capital account for purposes of calculating child support under IMDMA §505. The father was a partner in a public accounting firm that maintained a capital account composed of the father’s distributive share of the firm’s annual performance.
For an overview citing a list of cases in which sums of money have been held to be “income” for child-support purposes, see Illinois Department of Public Aid ex rel. Jennings v. White, 286 Ill.App.3d 213, 675 N.E.2d 985, 221 Ill.Dec. 561 (3d Dist. 1997). In this case, the father received a $200,000 settlement for an injury suffered while employed by a railroad. He failed to provide information as to a breakdown of the settlement (i.e., what portion was for lost wages and what portion was for pain and suffering and permanency). The trial court found that approximately $129,000 was income for child-support purposes and then deviated below the guidelines and ordered the father to pay 15 percent of the award to the Illinois Department of Public Aid (now known as the Illinois Department of Healthcare and Family Services) and the mother. When the father appealed, the appellate court affirmed that after deducting attorneys’ fees, costs, bills, and mandatory retirement contributions, the remainder was properly considered income subject to IMDMA §505. Additionally, the appellate court rejected the father’s argument that a loan he borrowed to provide living expenses be deducted from the gross settlement because the loan did not qualify as deduction allowable under §505.
What about payments from a disability pension? Is this income to considered when calculating child support? Payments from a firefighter’s disability pension should have been included in the payor’s income for purposes of determining his child-support obligation. People ex rel. Myers v. Kidd, 308 Ill.App.3d 593, 720 N.E.2d 1125, 242 Ill.Dec. 170 (5th Dist. 1999). The court reaffirmed that the Internal Revenue Code definition of “income” for tax purposes is not dispositive of the definition of “income” for child-support purposes. Furthermore, while the funds were exempt from garnishment while in the hands of the administrator pursuant to the applicable section of the Illinois Pension Code, 40 ILCS 5/1-101, et seq., they were not protected once in the hands of a payee subject to a valid support order.

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