Background
Ashley Kish and Caleb Grayson are the parents of three children. In the original support proceeding, a hearing officer examined six months of profit-and-loss information from Grayson’s audiovisual business. The officer rejected some claimed expenses, calculated approximately $37,858 in adjusted business income for that half-year, and doubled it to estimate yearly gross income of about $75,716.
The officer expressly declined the mother’s request to impute a $100,000 earning capacity because the record did not show that Grayson could or had earned that amount. Using the annualized six-month figure as actual income, the court ultimately ordered monthly child support of $1,410.
Grayson later sought a downward modification. His completed 2023 tax return showed adjusted gross income of $44,757 from the business and side work. He testified that the earlier six-month window included an unusually strong, one-time sale to a client he later lost. A second hearing officer and the trial court denied relief on the premise that the original officer had assigned a $75,716 earning capacity and that Grayson failed to show a change in his capacity to earn.
The Court’s Holding
The Superior Court vacated and remanded. Judge Olson explained that the modification decision rested on a basic misreading of the original calculation. The first hearing officer had not found willful unemployment or underemployment and had not imputed income under Pennsylvania Rule of Civil Procedure 1910.16-2(d). Instead, the officer used a six-month average, adjusted expenses, and annualized that period as a measure of actual income.
That distinction changed what Grayson needed to prove. When support is based on actual income, evidence that annual income materially declined may establish the substantial change in circumstances required for modification. A party need not disprove an earning capacity that was never assigned. Imputation requires a finding that the party willfully failed to obtain or maintain appropriate employment; no such finding existed here.
The panel did not decide the correct support amount or require acceptance of every figure in Grayson’s tax return. Questions about legitimate business expenses, representative averaging periods, credibility, and current earnings remain for the factfinder. The legal error was using an earning-capacity framework to reject the petition without evaluating the alleged change in actual income.
Key Takeaways
- Actual income and imputed earning capacity are distinct concepts in Pennsylvania support law.
- Annualizing a six-month income sample does not itself create an earning-capacity finding.
- Imputation requires findings concerning willful failure to obtain or maintain appropriate employment.
- A modification court must compare the new evidence to the basis of the existing order, not to a characterization the earlier record does not support.
Why It Matters
Kish matters for self-employed parents, whose receipts can vary sharply and whose business expenses require scrutiny. A short prosperous period may support an initial estimate, but it should not silently become a permanent earning capacity. The label determines both the governing rule and the evidence needed to modify an order.
Family-law counsel should preserve hearing summaries, worksheets, tax returns, and explicit findings showing whether the court used actual earnings or imputation. A modification petition should identify the original methodology and supply comparable, current financial proof. Hearing officers should state clearly whether they are averaging actual income, adding back expenses, or assigning capacity because of willful underemployment. The unreported decision does not resolve how Grayson’s income should ultimately be calculated, but it requires the remand court to ask the right legal question.