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The Basics of Child Support
"There can be no keener revelation of a society's soul than the way in which it treats its children."
- Nelson Mandela
In our neighborhood in Connecticut we were surrounded by mostly old Yankee families with names like Cox, Voight, and Baldwin. But there we were, the family with the long Sicilian name no one could pronounce. We shared our Mediterranean heritage with one other family, the Defeo’s, down at the bottom of the hill. They had seven kids and were always the go-to house for fun.
As long as you stayed out of Mrs. Defeo’s way a good time could always be had. Despite the fear she could instill, each one of those kids got the support and attention they needed to become confident and successful adults. I write this article with Mrs. Defeo, and all caring parents, in mind.
Nothing creates more confusion and anxiety than the possibility of paying or receiving income in the form of spousal support (alimony) and child support. These money transfers can make or break the financial life of either spouse if they are not implemented fairly in a divorce settlement.
In this article we explore child support; how it works, the various formulas in use around the country, and what you need to know going into your negotiations.
Child Support Basics
The family court system of your state has, above all else, a responsibility to make sure the children of divorcing couples do not suffer needless financial and emotional harm. Therefore child support payments from one parent to the other, or some other way of ensuring the children’s financial needs are met, are required for a settlement to be approved.
This is not to say that all settlements must have child support payments. If children spend equal time with each parent, and if the parents’ incomes are nearly identical, the court could approve a settlement without child support payments. But this is more the exception than the rule.
Child support formulas are all flawed in some way. For example, virtually every state requires one parent to pay the other rather than paying for children’s expenses out of a jointly funded account. And in all states one parent must be designated as the custodial parent even where time is split evenly between households.
Despite these flaws, state courts are obligated under federal law to have statutes and processes that protect the needs of children. So they stick with their chosen formula as a way to create consistency, protect children, and give parents the opportunity to use the court to advocate for changes to their child support obligations. It is an imperfect system but a necessary one.
Child Support Models
You need to consult your state’s child support guidelines. But you will find that each state subscribes to one of three approaches to calculating child support.
The Income Shares Model is the most popular approach in use today, with 37 states employing it. It is based on the concept that the child should receive the same proportion of parental income that he or she would have received if the parents lived together. It allocates an amount of support for the child using a percentage formula based on the parents’ pooled or combined income.
The philosophy behind it is that the parents’ income after divorce should still be looked at as one income pool and spent for the benefit of all household members, including any children.
The Melson Formula builds on the concept of the Income Shares Model but takes it a step closer towards economic reality by first deducting the parents’ basic living expenses from each of their respective incomes.
It is considered by advocates to be a fairer way to determine child support. It is only in use in Delaware, Hawaii, and Montana.
The Percentage of Income Model sets support as a percentage of only the noncustodial parent's income; the custodial parent's income is not considered.
This model has two variations: the Flat Percentage Model, where a fixed percentage of income is paid regardless of the amount of income earned, and the Varying Percentage Model, which reduces the percentage set aside for child support payments as income increases. It is in use by ten states today.
6 Things You Need to Know About Child Support
Child support guidelines are highly variable state-to-state, but here are some general rules:
Child support guidelines vary greatly by state. You should consult with an attorney to discuss how the courts are likely to view and calculate the payment of child support based on your unique circumstances.
This article is excerpted from “The Financially Smart Divorce”
Rhode Island provides for temporary or permanent alimony. The court, in making a decision, considers the earning capacity of the spouse receiving alimony, the income of the spouse paying, education and skills, which spouse spent a majority of time as a homemaker, and the time and expense required for the receiving spouse to undergo education or training to improve employment possibilities.
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