Self Employment Can Cause Child Support Collection Difficulties

Non-custodial parents are often willing to pay child support. However, laps es in payment can occur. Although the custodial parent is not left without remedies, the process becomes more difficult if the owing parent is self-employed.

Difficulty in Determining Income and Support Amount

Child support in Arizona is determined through application of the Income Shares Model. This model takes into consideration the "amount that would have been spent on the children if the parents and children were living together."

Before approximating the amount spent on children, the court calculates the parents' gross income. Arizona law provides some guidance on this issue. Gross income is generally determined by "gross receipts minus ordinary and necessary expenses required to produce income." Ordinary and necessary expenses are further defined as including "one half of the self-employment tax actually paid."

Difficulty in Receiving Payment

When a child support obligation exists, the Court customarily issues an Income Withholding Order (wage garnishment/assignment). This order directs the employer to garnish the employee's funds, removing the payment directly from the owing parent's paycheck. However, this option is difficult to apply when the parent is self-employed.

Although income withholding may not work to ensure payment from a self-employed parent, there are other options, including:

  • Requirement of a bond to guarantee payment
  • Revocation of drivers, professional, recreational and occupational licenses of parent not current in payments
  • Seizure of assets, including financial accounts
  • Liens on property
  • Denial of passports
  • Offset of federal and state tax refunds

There are remedies available if a self-employed parent is delinquent in making child support payments. As a result, it is important to discuss your options with an experienced family law attorney.