What the Rise in the Gig Economy Means for Divorce
Between the supply chain disruptions, the massive staffing shortages, and the surge in remote work, there’s no denying that the COVID-19 pandemic completely changed how people work and earn money. The gig economy, which was already starting to pick up, grew exponentially as the pandemic dragged on. As people realized that they could have more flexibility in their work and maintain multiple income streams, the number of independent contractors grew.
However, self-employment and gig work can significantly complicate divorce proceedings. If you’re preparing for a divorce and you or your partner have side gigs, find out how your divorce may be affected. To discuss your unique case in greater detail, call Kirk Drennan Law at 205-803-3500.
Multiple Income Streams Complicate Support Payments
It should come as no surprise that having multiple income streams can complicate support payments. This is often true for high earners, as most high earners don’t get there simply with one job. They may have rental properties, side gigs, or passive income sources. However, these side gigs aren’t always reliable. This can make it extremely difficult for the court to calculate alimony and child support.
Income May Fluctuate
Any type of side gig will have some fluctuation in income. If you babysit, your income may spike during the holidays when parents need a night out. If you deliver takeout through a platform like DoorDash, you may see a huge increase in earnings when the weather makes it impossible for people to leave their homes. If you own property that you use for AirBnB, you may see the vast majority of your earnings come in during summer.
This begs the question: how do you calculate monthly alimony and child support payments when income isn’t the same from month to month?
How to Calculate Support Payments
This is a complex question and there’s no one-size-fits-all answer. One thing is true—fluctuating earnings don’t mean that the earner gets out of child support. Some people purposely take gig work because they think that the inconsistent nature of their income will force the court to award no or minimal child support. That simply isn’t how it works.
If an earner’s income is higher at one point of the year, they should be setting aside money during high-earning periods to make payments during the rest of the year. The court may look at tax statements, earning records from different earning platforms, and data regarding work availability on those platforms to decide how much support is appropriate.
Issues You May Face
Those who do gig work on platforms like Upwork, DoorDash, Uber, or other large companies do have their income reported for tax purposes. This means that the earner cannot get out of paying child support by working under the table. But if your ex-partner does side work on their own, they may do so in order to avoid paying child support on those earnings.
If you suspect that this is the case, bring it up to your attorney immediately. The court has no patience for parents who try to get out of paying what they owe to their child, and they will hold the other parent accountable.
The court can always apply the imputed income to a child support case. If a parent intentionally avoids working or works under the table to avoid paying child support, the court may look at what the parent could be earning if they were working full-time. The parent will then be ordered to pay child support based on that income estimate.
Try to avoid panicking. Your ex-partner may believe that they are successfully tricking the court and getting out of child support, but family court judges have seen every trick out there that parents use to avoid paying child support. They will likely see right through your ex-partner, especially with the help of your attorney.
Contact the Team at Kirk Drennan Law—We’re Here to Help
If the ever-growing gig economy is making your divorce a headache, get the team at Kirk Drennan Law on your side. Call us at 205-803-3500 or get in touch online to schedule a consultation right away.
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