Calculating Payments

The Basic Equation Involved in Child Support

The legal duties of financial child support are based upon the needs of the child as well as the financial status of the parents as dictated by income and assets owned. 

It is generally accepted by the laws of the states that joint custody shall not eliminate the responsibility for financial child support. Instead, the financial goal of the law is to help families achieve self-sufficiency.

"The Best Interests of the Child"

Refusal to pay child support is a key factor contributing to the impoverishment of children.  The factors for determining financial child support are an important part of a combined effort to obtain a fair distribution of financial responsibility so most children may live in a manner as closely similar to that which existed before the divorce or separation of the parents. While every situation is unique, the one common denominator all parents must remember is the Court’s direction to provide for "the best interests of the child."

What the Court Considers in its Determinations

In deliberation of financial child support, the Court will consider many different variables which may include but are not limited to:

  • Lifestyle the children would have most likely experienced had the dissolution of the family not occurred
  • Financial resources of each parent
  • Age and health of each parent
  • Present and future income and earning capabilities of each parent
  • Children's educational needs, including the potential for higher education
  • Age and health of the children
  • Tax liabilities of each parent

In the financial analysis the Court or Child Support Enforcement (CSE) office will order a non-custodial parent to pay a specific amount to the custodial parent to cover a proportionate amount of the child’s expenses including:

  • Housing;
  • Food;
  • Clothing;
  • Uncompensated or uninsured health care costs;
  • Special expenses of a disabled or chronically ill child;
  • Costs for child care;
  • Transportation;
  • Academic and certain higher educational expenses;
  • An amount in support of social, sporting and other extracurricular activities and lessons.

Every State Has its Own Child Support Guidelines (CSG)

Every state has its own version of Child Support Guidelines (CSG) to help calculate an appropriate amount of financial support. Only the individual set of guidelines adopted by the state are presumed by the Court to be correct for use by that state. 

Furthermore, financial child support, like many other elements in divorce, does not have to be decided only by the judge or CSE office.  In the event an amount may be demonstrated manifestly unjust, inequitable or inappropriate under the guidelines for the particular circumstances of a case, departures may usually be set forth in a written agreement with reasonable explanation for deviation from the established guidelines. 

Departures from the Established Guidelines

Some of the factors the Court or CSE office will usually consider to overcome the presumption of established CSG are:

  • Needs of the children are exceptional and require more than average expenditures;
  • Extraordinary gross income of one or both parent;
  • Either parent supports a dependent child from another relationship;
  • Any other extraordinary factors or expenses as the Court may determine in the best interest of the children.

Income After Taxes

In making a determination of payment, calculations generally focus on income after taxes, and support is rarely the sole responsibility of the non-custodial parent. It is understood that the premiere job of the custodial parent is to provide a sufficient household.  For the majority of payments, financial child support is a straightforward application of a formula that is a result of a statute based upon a set of CSG adopted by each state. The actual amount may vary based on cost of living and other economic factors of the state.

Gross Income (Income Before Tax Expenses Applied)

Critical to establishing the financial basis for making child support payments is the determination of gross income for each parent, from all sources. Since CSG are based on the total gross income, it is important for each parent to ensure they have appropriately accounted for all revenues and contributions towards the support of their children.

Revenue sources the Court or CSE may consider in factoring total gross income include:

  • Salary or wages, including overtime, tips, income from self-employment, and severance pay
  • Commissions, bonuses or royalties
  • Investment interest or dividends
  • Social Security or veteran's benefits
  • Insurance benefits, pension or annuity
  • Worker's or unemployment compensation
  • Income from life insurance or an endowment contract
  • Income from a trust, or regular income from an interest in an estate, directly or through a trust
  • Any contract that results in regular income
  • Business income after deduction of reasonable and necessary operating expenses, not including depreciation
  • Net rental income after deduction of reasonable and necessary operating costs, but not depreciation
  • Capital gains from a real or personal property transaction, if the capital gains represent a regular source of income
  • An in-kind compensation if the in-kind compensation is significant and represents a regular source of income or reduces living expenses, such as use of a company car or reimbursed meals
  • Spousal support (alimony) received from any person;
  • Prizes, awards, lottery or gambling winnings that are received in a lump sum or in an annuity
  • Taxes paid on a party's income by an employer or, if the income is nontaxable, the amount of taxes that would be paid if the income were taxable
  • The non-custodial parent may expect to pay child support until the children is emancipated)
  • Each parent’s gross income as a percentage of the combined gross income
  • Any pre-existing obligation to pay child support or spousal support (alimony)
  • Number of dependent children under 21
  • Ability of each parent to provide healthcare coverage for the children and amount paid for health insurance
  • Amount paid for work-related child care, subject to some limitations provided by the state
  • If determined reasonable and prudent, the Court can also set aside a portion of joint or separate assets of the parties in a separate trust or fund for the support and education of the children.