Child Support Calculations: How much is there to fight about?

Child Support Calculations: How much is there to fight about?

How much is there to fight about when calculating child support? Plenty, but in reality, the calculation boils down to six (6) factors or areas that must be established to do a calculation. Those 6 areas are:

1.  Mother’s income;

2.  Father’s income;

3.  The number of children who fall under the child support order, and the age of each child; (Fortunately, this factor can’t often be disputed.)

4.  The cost of health insurance for the child(ren);

5.  Child care costs; and

6.  Parenting time days.   (The subject of the next post)

Sounds simple, doesn’t it? It’s not. I’ve seen disputes over the child support amount cost tens of thousands of dollars and last months in the court system.

Factor  #4, health insurance cost, generally can’t get too expensive. The usual problem here is that the parent who is paying the child’s health insurance hasn’t properly documented the cost of insuring JUST the child(ren).

Factor #5, child care costs, is a bit more tricky but again can usually be established with proper documentation. First, the cost needs to be documented over a substantial period of time,  through receipts, cancelled checks and statements showing exactly what was paid to a care provider.    Paying a care provider in cash may mean that you can’t prove what you pay in child care.

The child care cost usually differs, sometimes greatly, between the school year and the summer costs. One way to remedy the difference is to average child care over an entire year, and divide by 12.  If the summer care costs $500 per month for 3 months, and the school year care costs $200 per school month for those 9 months, the total annual child care is [$500 X 3] + [$200 X 9] which is $3300 per year. Divided by 12 months, the annualized cost of child care is $275 per month, all year.

The really troublesome disputes in calculating child support are disputes about either parent’s income. The parties can dispute whether a parent is underemployed (not making as much as he or she can, or not working “full-time” hours each week); whether bonuses should be included in a parent’s income; whether overtime should be included; whether second job income should be included; and whether a parent is reporting all the income he or she actually gets. I’d love to answer all these questions for you, definitely, but there is no one answer. The answer to everything is “It depends”, and this often results in litigation.

When a parent is self-employed, numerous other areas of dispute arise. This is an area where a dispute about the child support amount can really get expensive for the parents.   What “business” expenses are actually the cost of doing business which should not be included in a parent’s income for child support purposes? Rent and salaries paid to an employee are actual costs that probably should be deducted from the self-employment income.  But what about cell phones, automobile expenses, and those numerous charges at Costco? What about travel? Are those truly costs of doing business, or is the self-employed parent deducting some of his/ her personal expenses as business expenses?  What about self-employment taxes that the self-employed parent has to pay? 

And what about one-time or non-recurring income of a parent?  If an asset is sold and a parent has one year of greatly increased income as a result, does the child support amount change?  What if a parent is sitting on a large asset and refusing to sell it (like stock options, or investment property), just to avoid paying more child support?

Clearly, when someone asks “How much child support should I get/ pay?”, a fairly straightforward answer is expected. That’s rarely possible. It might be possible in a case where both parents are full-time, salaried employees who always work a 40-hour week, with steady income that doesn’t change, with no hope of a bonus. Of course, those folks might still argue about parenting time days, which is the subject of the next post.

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