THE FUNDAMENTAL STATUTORY LAW

The child support guidelines of the state of Oklahoma require that child support "be computed as a percentage of the combined gross income of both parents." Gross Income as defined by section 118 includes earned and passive income from any source, except as directly excluded by this section of the statute.

"Earned Income" is defined as income received from labor, or the sale of goods or services, and includes, but is not limited to, income from: (a) salaries, (b) wages, (c) commissions, (d) bonuses, and (e) severance pay.

"Passive Income"  is defined as all other income and includes but it is not limited to , income from: (a) dividends, (b) pensions, (c) rent, (d) interest income, (e) trust income, (f) annuities, (g) social security benefits, (h) worker's compensation benefits, (i) unemployment insurance benefits, (j) disability insurance benefits, (k) gifts, (l) prizes, and (m) royalties.

Section 118 specifically excludes from "gross income" the following: (1) actual child support received for children not before the court, and (2) benefits received from means-tested public assistance programs including, but not limited to: (a) Temporary Assistance for Needy Families (TAN F); (b) Supplemental Social Security Income (SSI); (c) Food Stamps, and (d) General Assistance and State Supplemental Payments for Aged, Blind and the Disabled.

The definition of gross income, when derived from self-employment is, perforce, substantially different. "For income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation, 'gross income' is defined as gross receipts minus ordinary and necessary expenses required for self-employment or business operations."

This provision of 118 requires the court to "carefully review income and expenses from self-employment or operation of a business to determine an appropriate level of gross income available to the parent to satisfy a child support obligation."

This section provides that the Court has absolute discretion to determine what ordinary and necessary expenses may be excluded from the determination of gross income for self-employment income.

More guidance on the calculation of gross income comes from Section 118 in subsection 4.a. where it provides that "for purposes of computing gross income of the parents, the district or administrative court shall include for each parent, whichever is most equitable, either:

(1) all earned and passive monthly income, (2) all passive income, and earned income equivalent to a forty-hour work week plus such overtime and supplemental income as the court deems equitable, (3) the average of the gross monthly income for the time actually employed during the previous three (3) years, or (4) the minimum wage paid for a forty hour work week."

Section 118 provides for the imputation of gross monthly income for either parent in "the amount a person with comparable education, training and experience could reasonably expect to earn."

Section 118 requires that when" a parent is permanently physically or mentally incapacitated, the child support obligation shall be computed on the basis of actual monthly gross income."

While the term "adjusted gross income" is statutorily the results of the court's review of income, 9 section 118 specifically mandates deductions to arrive at "adjusted gross income" for: (a) "the amount of any preexisting district or administrative court order for current child support for children not before the court" or "for support alimony arising in a prior case"; and (b) "the amount of the parties attributable to debt service for preexisting jointly acquired debt of the parents", "to the extent payment of the debt is actually made."

However, and correspondingly, "in any case where deduction for debt service is made, the district or administrative court may provide for prospective upward adjustments of support made possible by the reasonably anticipated reduction or elimination of any debt service."

Whether income is "gross income" for purposes of child support is a question of law. The standard of review for a trial court's determination of "gross income" is abuse of discretion. Read v. Read provides that the court's discretion in determining child support cannot be abridged by external restraints such as an agreement between the parties, and that if a court errs as to the amount of child support, it is an error of law.