Workers’ Compensation Settlement is Income for Child Support

Most couples will have to alter their child support arrangement at least once at some point afterWorker Compensation Form their divorce due to any number of reasons. The most common reasons are as follows:

  • The emancipation of a child, which in Illinois is typically when a child turns 18 or graduates from high school;
  • A change in employment which results in a change of income of the parent paying support; or
  • A change in the custodial arrangements of the children.

According to a recent Illinois Supreme Court case, a child support recipient may also file a Petition to Modify Support if a child support payor receives a lump sum workers’ compensation settlement in order to receive a portion of that payment as child support. In the case of Mayfield v. Mayfield, 2013 IL 113655 (2013), the Supreme Court held that a $300,000 worker’s compensation settlement was income for purposes of setting child support and that the recipient of the settlement had to pay guideline child support on the award. At the hearing, the settlement recipient testified that he spent the funds paying off his mortgage, purchasing additional real estate, taking expensive vacations, purchasing a motorcycle, and renovating his home.

In Illinois, the definition of income for child support purposes is broad and generally includes any financial benefits that enhance a noncustodial parent’s wealth and helps that parent’s ability to support a child. In Illinois, even recurring monetary gifts from family members can be considered income for child support. Therefore, because a worker’s compensation settlement is compensation for lost wages, it is also income for child support purposes.

An argument was made in the Mayfield case that the entire lump sum settlement should not have been subject to the Illinois guideline support formula since the settlement represented lost wages over the period of the injured worker’s employment life – which would extend beyond the time when he was ordered to pay child support. The Supreme Court held that the one-time payment was income, but its nonrecurring nature could factor into the trial court’s decision on how to allocate it.

However, since the settlement recipient never requested that the court deviate downward from the guideline amount and did not present evidence that warranted a deviation downward, the trial court properly awarded guideline child support. Had the settlement recipient presented evidence that would have supported a deviation downward, the outcome may have been different.

This entry was posted in Child Support, Divorce and tagged , .
Michelle A. Lawless

About Michelle A. Lawless

Recognizing that a divorce may be one of the most significant financial transactions a person enters into during his or her life, Ms. Lawless helps clients reach settlements that protect and preserve their assets for the future. She works with each client to find individualized solutions to fit his or her needs, whether that is through collaborative settlement or traditional litigation. Ms. Lawless has spent her entire career navigating high net worth individuals through complicated family law matters, including valuations of closely held businesses, tax and estate planning matters, custodial and support arrangements for minor children, as well as multi-state jurisdictional disputes.

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