AKMV 
Maintenance Obligation of a Self-Employed Person
QUESTION
Is the fact that I am self-employed taken into account when determining the amount of child support?
ANSWER:
Good day,
Pursuant to § 75(1) of Act No. 36/2005 Coll., the Family Act (hereinafter “FA”):
“When determining maintenance, the court shall take into account the justified needs of the entitled person, as well as the abilities, possibilities and property circumstances of the obligated person. The court shall also take into account the abilities, possibilities and property circumstances of the obligated person even if the obligated person, without good reason, relinquishes more advantageous employment, earnings, or property benefits; likewise, it shall also take into account unreasonable property risks that the obligated person assumes.”
The abilities and property circumstances of the obligated person are examined by the court individually in each case. Each parent contributes to the maintenance of their children “according to their (individual) abilities, possibilities, and property circumstances” (§ 62(2) FA). According to the decision of the Regional Court in Prešov, file No. 8Cop/13/2008:
“The term ‘own abilities and possibilities’ does not mean only the parent’s net average monthly income (wages and other income for the previous calendar year); rather, the court comprehensively assesses the parent’s abilities and possibilities. This is to prevent the parent from avoiding (or reducing) the maintenance obligation to the child, for example, by taking financially less advantageous employment, voluntarily becoming unemployed, or disposing of assets (in the case of a self-employed person, e.g., by returning the trade licence or ‘transferring’ the business to another person, etc.).”
This is the so-called principle of income potentiality. As the court further stated in the cited judgment:
“In determining maintenance, the decisive factor is the income that the parent could realistically have earned, not the income actually earned. If the reported income appears to be false, it is the court’s duty to consider the overall property circumstances of the obligated person and the so-called potentiality of income, i.e., the parent’s clearly unused abilities.”
Pursuant to § 62(5) FA, the court takes into account only those expenses of the obligated parent that are necessary to provide for their child’s maintenance. In relation to the expenses of a self-employed person, the court stated:
“Not every expense of the obligated parent, even if recognised for tax purposes in business, is so necessary that the legal maintenance obligation to a child, including an adult child who is still not self-supporting, cannot be given priority over such expenses. Even an entrepreneur must adjust their expenses to be able to fulfil this statutory maintenance obligation.” (Judgment of the Regional Court in Prešov, file No. 5Co/71/2013)
In the same decision, the court concluded:
“It is solely the father’s choice when and for how long he will be in business, and whether or not he will terminate a licensed trade. It is not decisive what actual expenses the father incurred from business activities, i.e., what the tax loss under § 6(1), (2) of the Income Tax Act is. The decisive factor is which expenses were necessary and which were not.”
According to older case law:
“In the case of a parent who is an entrepreneur, when assessing their earning capacity for the purpose of determining maintenance, the court proceeds from the income reported by that parent in their tax return and as stated in their testimony, subsequently confirmed by a report obtained from the relevant tax authority to verify the accuracy of the parent’s statement.” (R 17/1994)
If a parent obligated to pay maintenance starts doing business as a self-employed person, this fact may lead the parent entitled to receive maintenance to apply to the court for an increase in maintenance (see, e.g., Judgment of the Regional Court in Žilina, file No. 11CoP/22/2014, or Judgment of the Regional Court in Trenčín, file No. 27CoP/62/2017). Pursuant to § 78(1) FA:
“Agreements and court decisions on maintenance may be changed if circumstances change.”
Under such circumstances, the court may decide to increase the amount of maintenance even without a petition, on its own motion.
If you are interested in legal services not only in the field of family law, do not hesitate to contact us at office@akmv.sk or by phone at +421 915 046 749.