How child support is calculated varies depending on where the support action is filed. Each state sets forth guidelines that dictate how support is to be assessed. Some states have clearly defined guidelines that make it easy to determine support obligations, while other states leave the determination of support obligations largely up to the discretion of the court. Even in states with stricter guidelines, courts generally have the authority to deviate from support guidelines when they have just cause for doing so.
The foremost consideration of all guidelines is ensuring the parents adequately provide for the child. In addition to providing financial support for the child, support guidelines have provisions dictating that a child’s healthcare costs must be provided for as well, whether it be through insurance or other means. The guidelines also set forth the self-support reserve to consider in determining support obligations. A self-support reserve is the amount of money each parent needs to provide for his or her own support before a support obligation can be imposed on him or her.
To allow courts to thoroughly assess the financial situation of parents involved in a child support action, each parent is required to make financial disclosures to the court setting forth his or her monthly income and expenses. Income must include income from all sources, including employment, pensions, stocks and trusts. Some states allow a court to impose a support obligation on what a parent previously earned as income or what the parent is capable of earning, if the court finds the parent deliberately reduced his or her income to avoid a support obligation. Expenses include any housing expenses and any outstanding loan obligations.
The court may also consider factors that affect both what a parent can pay and the anticipated cost of raising a child in determining child support obligations. Factors often considered include the assets and liabilities of each parent, the standard of living the child is accustomed to, and the amount of time the child resides with each parent. Any special needs of the child are considered as well. In some states, if a parent is obligated to provide for other children, that will also be considered.
There are several methods used to calculate child support. Most states utilize an income shares method in determining child support obligations. The income shares method calculates the combined income of both parents and the anticipated monthly cost of raising a child, and requires each parent to be responsible for the percentage of the cost that reflects the percentage their income constitutes of the combined income. In other words, if a parent’s income is sixty percent of the combined income, his or her support obligation would be sixty percent of the monthly cost of raising the child. A handful of states utilize the Melson formula, which is a more complicated version of the income shares method, and which employs additional factors to determine each parent’s support obligation.
A minority of states employ a percentage of income model. In states that apply the percentage of income model, the court only considers the income of the non-custodial parent, and bases the child support obligation upon a set percentage of that income. The percentage of income a parent is required to pay varies by state. Depending on the guidelines of the state, the percentage of income the non-custodial parent is obligated to pay may fluctuate based on increases or decreases in his or her income.
In some cases a court will include a cost of living adjustment clause in a support order, which allows for an automatic increase in support obligations based on the annual increase in cost of living. The cost of living clause helps ensure the child is provided with adequate financial support without frequent modifications to the support order.
