How does 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 accident or other catastrophic event prior to entry of a child support order, the award will likely 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 basically 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. This is because both parents have an equal obligation to provide financially for their offspring regardless of where the income to do so comes from. It is prudent to discuss the specific child support ramifications of any personal injury settlement with an experienced 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 is still 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 many situations this should end up with a scenario where your injury award matches your personal expense resulting in, at most, a minor change in circumstances. There are some situations, however, where a large award may be considered a material change in circumstances, which is generally the burden to modify an existing order. It is wise to discuss these potential outcomes with a seasoned personal injury lawyer Washington DC trusts who may offer skilled advice based on your own unique set of circumstances.
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 one of two other 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. Again, this is based 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 consider all of the potential variables when negotiating a personal injury settlement or calculating income for the purposes of child support. An experienced attorney can guide you through either of these processes while protecting your legal rights.
Thanks to our friends and contributors from Cohen & Cohen, P.C. for their insight into personal injury practice.