Information Provided by: J. Anthony Licciardello, Mediator and CDFA and is excerpted from “The Financially Smart Divorce”, available on Amazon.
"There can be no keener revelation of a society's soul than the way in which it treats its children."
- Nelson Mandela
One of the most important topics discussed in mediation is child support. These are required payments from one spouse to another to ensure that children’s needs continue to be met once their are two households instead of one.
In this article we explore child support; how it works, the various formulas used, and what you need to know going into your negotiations. There are specific details for Massachusetts and Rhode Island residents.
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 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. This is what is used in Rhode Island and Massachusetts among others.
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.
7 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 is considered more important than spousal support (alimony) in the eyes of the courts. The children’s welfare comes first … spouse’s second.
Child support payments vary state-by-state. You need to look at the formula your state uses. Every state has an online calculator to determine what is likely to be paid.
Under the Income Shares Model, the relative income of each parent and which parent is designated as the custodial parent are the major factors in calculating child support. But other factors may be considered, such as:
Whether there are existing child support obligations from a previous marriage
Which parent is paying for health insurance and day care costs
Extraordinary medical costs for the parent or child
Additional nights spent at the non-custodial parent’s home, i.e., parenting credit.
What one considers “income” varies greatly by state. It could be gross income, net income, imputed income, or some other form. Bonuses and investment income may or may not be considered. In Massachusetts and Rhode Island virtually all income from all sources is included. There really is no place to hide.
Child support may be raised upward or downward from the state guidelines based on any number of factors such as special needs of the children, other expenses being picked up by the paying parent (like private school), and whether the calculated payment is much more than is needed.
Child support eventually ends, typically at the age of majority which is age 18 in most states. Some states allow payments to continue if the child is attending college or has not graduated high school. Check your state’s guidelines and statutes to see if this applies to you.
Child support may be modified based on a substantial change in circumstances, usually financial. So job loss or a significantly higher salary for either spouse can be reason to petition the court for a change.
For those of you living in Rhode Island and Massachusetts there are some unique aspects to your state’s handling of child support.
If you choose to co-parent and your child spends overnights at each home Rhode Island runs a calculation of child support twice; once with each parent having sole custody and then taking the difference between the two payment amounts and the result is paid by the person who had the higher support payment. Weird? Yes, but that is the administrative practice in place.
Massachusetts’ calculates the amount of overnights each child has with each parent and if one person has them for more than 66% of the time they are considered the custodial parent. It can make a big difference in money flows.
Massachusetts child support may continue at a reduced amount after age 18 if the child is enrolled full-time in a four year college program. It ends when they turn 23. Rhode Island does not have this provision.
Bonus Tip: If you are planning on buying a new home after your divorce and want to show child support income you need to have already been paid 6 months of child support to satisfy the mortgage company.. Receiving it even before your divorce goes before the judge may be a good strategy.
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.
If you would like help with calculating child support or have other divorce questions call us at 401 533-4142 or drop us an email at wentworthplanning@gmail.com.
More information can be found on our website at wentworthdivorceconsultants.com