Voluntarily terminating one’s employment, which includes not only a total cessation of employment, but also an intentional decrease in one’s income, will not serve to lessen one’s child support, spousal support or alimony obligation, in most cases. Pennsylvania is not an “earnings” state; rather, it is an “earning capacity” state.
Support and alimony are calculated based upon a person’s earning capacity. One’s earning capacity is calculated based upon one’s education, earnings history, earnings potential, average wage in the industry for a person’s job or profession and a number of other factors. Voluntarily reducing or eliminating one’s income, or in some cases, getting terminated from employment for cause, may not reduce one’s support obligation.
On the other hand, an involuntary termination of employment, such as a Company-wide layoff, will in most cases result in a lowering of the support obligation. The party laid off, however, must prove that he or she is actively seeking appropriate employment. Failure to seek employment may result in an earning capacity Order, even if the termination of employment was not voluntary.
Earning capacity cases can be complicated and there are a number of factors involved in determining whether a case is an earnings or earning capacity case. Seeking good legal advice can be critical to success.