Organizing Child Support in Divorce-Part 1
UPDATED April 2023 (see below)
One of the scariest parts of ending a marriage is the worry about financial security.
Each person wants to create a comfortable home for themselves and their children.
When couples discuss how they are going to share money between them, there are generally two concepts: child support and spousal maintenance (also referred to as alimony).
Divorce mediation provides an excellent setting to discuss the many options and individualized ways to exchange child support. This first of two posts gives an overview of child support as governed by New York State divorce law.
What Is Child Support?
Findlaw.com’s section on family law describes this well:
“Parents whose children are in the physical custody of the other parent usually are required to pay child support. These payments are meant to help cover the costs of raising a child.
“Whether it’s through a mutual agreement or a court order, paying child support is not only important to the child’s well-being but also strictly enforced by state authorities. In fact, a parent who ignores a court order to pay child support could face criminal punishment. The issue of child support should revolve around what is best for the child.”
Who Pays Child Support?
Both parents pay child support.
Who actually pays how much to whom is a function of the parenting plan that the couple agrees to. The New York State Child Support Guidelines provide that the parent who is with the child more (generally based on overnights but not always) is the primary residential parent (PRP) for the purposes of child support.
In terms of actual money changing hands, let’s say Bob is the non-PRP and Sally is the PRP. Bob pays his agreed-upon share of the total child support amount to the PRP (by check or whatever financial mechanism the couple agrees to). At the same time, Sally is expected, from her own income, to devote her share of the total child support amount to the appropriate household and child expenses.
What Is Child Support To Be Used For?
Child support law is designed to create comparable environments for the children to feel comfortable in each parent’s home after the divorce.
Child support is intended to help fund household expenses such as the mortgage, utilities, food, gas, home insurance, and the like. It is also intended to cover the ordinary expenses of the child such as clothes, school lunches, school supplies, and haircuts.
Regarding the effect of child support on the parents’ income taxes:
- It is not taxable income for the receiver. It does not increase the income taxes of the person who receives it.
- It is not tax deductible by the payor. It does not reduce the income taxes of the person who pays it.
How Is Child Support Calculated?
Child support has two official parts, each intended for specific needs of the children:
Part 1: The percentage based on the parents’ total income. The portion of the combined adjusted parental income to be devoted to child support is one of the following percentages determined by the total number of children you have:
- One child: 17%.
- Two children: 25%.
- Three children: 29%.
- Four children: 31%.
- Five or more children: No less than 35%.
The child support percentages listed above were designated in 1988 and have not been adjusted since that time. However, because incomes have risen, theoretically, child support has also increased.
This post focuses on this part of child support.
Part 2: The proration portion is based on the ratio of one parent’s income to that of the other. This is intended to be used only for other specific expenses for the children and is paid in addition to the child support determined by the percentage calculation above. The other expenses are:
- The incremental costs for health insurance coverage.
- The actual uninsured medical expenses for the children.
- Child care, if applicable.
- Pre-college education, if applicable.
The proration concept is covered in more detail in Organizing Child Support in Divorce-Part 2.
Calculation of Parental Income
Let’s use a hypothetical example of Bob and Sally, who both work and have two children together. Let’s say Sally will be the primary residential parent (PRP).
|Child Support Percentage||Bob||Sally||Total|
|Gross annual income (1)||$75,000||$35,000||$110,000|
|FICA @ 7.65% (2)||($5,738)||($2,678)||($8,416)|
|Other deductions (3)||$0||$0||$0|
|Net amount (4)||$69262||$32322||$101584|
|% for 2 children 25% (5)||$17,315||$5,495||$22,810|
(1) This includes overtime, sales commissions, bonuses, and all sources of income with a few exceptions.
(2) FICA tax is collected by the US government for Social Security and Medicare. It is the only tax that is deducted because it is the only tax that is the same for everyone.
(3) There are other eligible deductions from gross income that are applied, if relevant, such as child support paid for a child with a different former spouse or spousal maintenance.
(4) These are the income amounts that the guideline percentage is applied to.
(5) For 2 children, the guideline amount of annual child support is 25%. Bob pays his 25% to Sally, the PRP. Sally is also expected to devote her 25% to the applicable household and child-related expenses.
Effect of the Combined Parental Income Amount On Child Support Calculations
NYS uses a figure called the Combined Parental Income Amount, also referred to as an “income cap.”
- UPDATE MAR 1, 2022: That number is $163,000. (Its next update is scheduled for March 2024.)
- How NYS uses that number: “Where the total income of both parents exceeds the combined parental income amount of $163,000, the law permits, but does not require, the use of the child support percentages in calculating the child support obligation on the income above $163,000.” That document is updated every year on or before April 1.
- Page 22 of that document provides an online calculator to determine an “approximate, basic child support” figure.
Example: If Bob and Sally have a combined adjusted parental income of $141,000, which is below the cap, the percentage-based child support for their two children (25%) is $35,250 ($141,000 x 25%).
If Total Parental Income Is Greater Than $163,000
If the combined parental income amount income exceeds $163,000, the law permits, but does not require, the use of the child support percentages in calculating the child support obligation on the income above $163,000.
Example: Let’s say Bob and Sally have a combined adjusted parental income of $171,000. If there were no income cap, their total, percentage-based child support obligation would be $42,750 ($171,000 x 25%).
Because of this combined income cap, the percentage-based child support would be calculated at $40,750 ($163,000 X 25%). The NYS law permits, but does not require, the difference of $2,000 ($42,750-$40,750) to also be considered for this couple’s child support obligation.
If a Parent’s NYS Income Below US Poverty Level (2023 Update)
UPDATED Jan 19, 2023 The 2023 HHS Poverty Guideline for a one-person household in the contiguous 48 states and DC is $14,580. (This number is updated annually.) It was accepted in NYS forms that use that number for “Matrimonial Actions” on Mar 1, 2023.
The NYS Child Support Standards Chart lists a parent’s annual child support obligation for one child as a minimum of $300 with an annual income of $10,000. That child support obligation increases with the parent’s annual income amount and the number of children.
However, another important number affecting the child support amount a parent is to pay is the NYS “self-support reserve,” calculated as 135% times the HHS poverty guideline amount for the number of persons in the household. For example, in 2023, the self-support reserve for a one-person household is $14,580 X 135% = $19,683. For more information how the self-support reserve is used, see NYS LDSS-5143A, “Important Information about Child Support Services,” “Child Support Obligations” section on page 3.
Other Considerations Regarding Child Support
- It is useful to consider having a life insurance policy on the non-PRP who is paying child support to the PRP. The PRP could be designated as the beneficiary. The insurance amount might approximate the total financial obligation over the child support-paying period. This is because, if the non-PRP parent passes away, their contribution to child support could end. That could cause significant problems concerning the financial support of the children.
- If a parent dies, Social Security benefits would be provided (if eligible) for children up to age 18.
- Child support may be extended by mutual agreement to continue until a child completes college (usually within 4 years high school graduation).
- Child support ends at 21 or prior to 21 upon the child’s emancipation. That typically happens if a child enters the military, marries, or does not go on to higher education after high school and is independent.
- UPDATE July 2022: NYS passed a law in Oct 2021 affecting child support. Chapter 14 Domestic Relations, Article 13, Section 240-D now permits a custodial parent to pursue child support for adult children with disabilities above the age of 21; such support will continue until age 26. The child must be diagnosed by a medical professional. The law also allows courts to modify prior child support orders. This means parents can return to court and petition to modify their current child support orders if the child is not older than age 26. The person who may file the petition is the custodial parent or caregiver of a “developmentally disabled” child and that child is “principally dependent” on the petitioner and resides with the petitioner. Please consult your divorce mediator or divorce attorney to learn more about this legislation and determine whether this applies to your situation.
Child Support Is a Complicated Issue
As you can now tell, child support is determined by a variety of factors that the law tries to take into consideration. If both parents keep the children’s best interests at heart, then that will drive the best possible outcome.
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