by Joy S. Rosenthal, Esq.~Have you ever wondered how child support is determined? Here are some basics to guide you.
Child support refers to the money one parent must pay the other on the children’s behalf. While state laws vary, all follow the same basic principles: Both parents are responsible for supporting their children until they are grown. The parent who has the children most of the time is the one who receives child support. Child support should cover the basics (food, shelter, clothing) as well as additional expenses.
Child support laws are very strict: It is one debt that must be paid in full, even by people who declare bankruptcy. You can lose your driver’s license for failure to pay child support!
How is it calculated? Well, let us look at a number of factors:
1. Where Do the Children Live?
First, determine who pays whom. The “custodial parent” is the parent the children live with most of the time, and the “non-custodial” parent is the one the children live with less. The non-custodial parent must pay child support to the custodial parent. In some states (like California), the more time you spend with your children, the less you must support them financially. However, other states (like New York), do not pro-rate the amount in that way.
If the parents split time evenly with their children, New York courts will determine the parent with the higher income pays child support to the parent earning less.
2. What Counts as Income?
Salary and wages, of course, but also many other forms of income, such as bonuses, disability, veterans, workers compensation, social security and pensions.
Perhaps most surprisingly, the court may impute income. If a parent voluntarily quits a high paying job to become a barrista at the local coffee shop, the court may tell him he must pay the same amount of support as he was paying before.
State and federal taxes are NOT deducted. “Income,” then, is generally about 90% of the parent’s gross.
3. What’s Included in Child Support?
Child support includes both basic needs and add-on expenses. Basic needs are housing, food, clothing, transportation, and medical insurance. “Add-on” expenses can include things like lessons, tuition, computers, childcare, and camp.
Child support statutes generally determine basic needs as a percentage of the paying parent’s income. In New York, it is 17% of the payor’s income for one child, 25% for two children, and 29% for three children.
Parents are responsible for “add-on” expenses pro rata. For example, a family with two children has two incomes – the father’s income is $70,000 per year, and the mother’s is $30,000 per year. For add-on expenses, the father is responsible for 70%, and the mother contributes 30%.
Child support statutes often have an upper limit to the payor’s income. In other words, those with high incomes may not be responsible for paying a percentage of their total income if the child’s needs are met.
4. What Else do Judges Consider When Determining the Amount of Child Support?
Courts want children to feel as little financial impact of divorce as possible. But they know that there might be special circumstances. So they might vary from the formula. Some examples of factors to consider are:
The financial resources of the parents
The standard of living the child would have had if living with both parents
The discrepancy between parents’ incomes
Whether the child has special needs
If the non-custodial parent does not earn income, or if paying child support would put him in poverty, he may be ordered to pay a nominal amount — in New York, $25 per month. Here is an example of a NY State Child Support Calculator.
5. Alternative Ways of Deciding, Other Things to Consider
If you are using mediation or collaborative process for your divorce, you can be more creative in your child support agreement, and tailor it specifically to your situation. You can vary from the formula, too. For instance:
You could use a joint bank account for your children’s needs. Each parent deposits a set amount per month, and both parents have debit cards to use for the children’s expenses.
Or one parent could pay third parties directly (i.e. rent, utilities, groceries) on behalf of the custodial parent and the children. These are just a few examples.
Even a mediated agreement will have to be approved by a judge. But as long as it is clear, fair and the children’s lifestyles are not compromised, judges will generally sign off on your agreement.