Little v. Little
In Little v. Little, 193 Ariz. 518, 522, 975 P.2d 108, P 11, 975 P.2d 108, 112 (1999), the Arizona Supreme Court adopted an "intermediate balancing test" for trial courts to apply when deciding whether to use actual income or earning capacity in making a support determination when a non-custodial parent voluntarily reduces his or her income by terminating employment.
Among the factors the trial court should consider are the financial impact on the children, the reasonableness of the parent's decision, and whether the decision was made in good faith. Id. at 522-23, PP 12-14, 975 P.2d at 112-13.
The Arizona Supreme Court adopted an intermediate balancing test to determine whether to use actual income or earning capacity to calculate child support when a parent voluntary reduces his or her income.
The intermediate test mandates balancing a number of factors. Little, 193 Ariz. at 522, P 12, 975 P.2d at 112.
In adopting the intermediate test, the Little court expressly rejected both the good faith test, which Husband argues should be applied, and a strict rule test.
It identified three fundamental flaws with the good faith test:
(1) The good faith test erroneously assumes that a divorced or separated party to a support proceeding will continue to make decisions in the best interest of the family unit, when often the party will not do so;
(2) It fails to give enough weight to the support obligation involved; and;
(3) The test by its very nature has a built-in bias in favor of finding good faith to exist. Little, 193 Ariz. at 521-22, P 9, 975 P.2d at 111-12.
The court also rejected the strict rule test as too inflexible because a reduction of income resulting from a voluntary act of a party is disregarded and the court considers only one factor, the party's earning capacity. Id.