Income Shares Model
The income shares model is based on the assumption that children should receive the same financial support from their parents as if both parents had remained together. The income of both parents is included in the calculations. This formula was used by 41 states until 2020.
The calculations begin by determining the cost of raising a child in that specific state. Assuming the cost is $1,000 per month for one child, the court would divide this number by the parents’ combined income. The mother would be responsible for $600 per month if she earns 60% of their combined income, while the father would be responsible for $400 per month if he earns 40%.
If the child lives with the mother, the basic amount of child support owed to the mother from the father would be $400 per month, which is 40% of $1,000. It is assumed that the mother pays $600 directly through mortgage loans or rental payments and grocery bills, etc.
Melson Formula
The Melson formula is used in the states of Delaware, Hawaii, and Montana as of 2019. It was developed in 1989 by a family court judge in Delaware and is a more complex version of the income shares model.
This formula includes additional factors and expenses, many of which are designed to account for the financial needs of the parents as well.
Income Percentage Model
Six other states use the income percentage model. As the name suggests, this is a fixed or modified percentage of the non-custodial parent’s income.
For example, Texas uses a modified or variable version of this model. The non-custodial parent will pay 20% of “net resources” for one child, up to at least 40% when five or more children need support.
Note: This formula has been criticized for being the most unfair as it does not take into account parenting time or other affecting factors.
Parent Income
Income can be net or gross. Net salary is considered net income.
It can include lottery winnings, stock estimates, and future income. It may also include the financial value of benefits such as using a company car or military housing allowance.
Parents must provide copies of their most recent W-2 forms, pay stubs, and documentation supporting any other types of income they may have. The income of working parents is usually based on their tax returns.
Other Dependent Children
Most states take into account support paid for other children not included in the child support order being calculated. For example, the parent may already be paying child support for a child from another relationship, or supporting one or more children who currently live with him.
Parenting Time Factors
The income shares model is designed to accommodate the amount of time the child spends with each parent, which generally depends on how many nights the child spends in each home in a month.
The custodial parent receives a credit for meeting the child’s needs directly while the child is in that home. Similarly, the parent who has parenting time receives a credit for meeting the child’s expenses directly during visitation time in the parent’s home.
Special Considerations
States may impose a higher level of support for medical or educational expenses that exceed the average, or for children with special needs who may incur additional expenses such as speech therapy.
Note: Some family courts may also consider the costs of recreational activities such as sports camps or after-school activities.
Most states using the income shares model apply the same mathematical formula for work-related child care costs and health insurance expenses, dividing them between the parents based on their relative contributions to their combined income.
Impact
College Costs Regarding Child Support
Child support obligations end when the child reaches the age of majority, which is typically at 18 years old, but in some states, it can be at 21 years old. The college child support obligations depend on the state that issues the support.
To learn more about child support payments and obligations in your state, please visit your state’s family court website.
Agreed Child Support
Most states allow parents to come to their own agreements regarding how much child support will be exchanged. Judges may agree to a different arrangement if exceptional circumstances make the state’s child support guidelines unreasonable, and parents can agree on the amount that should be paid. However, parents receiving any type of public assistance are not eligible for this option.
To learn more about child support payments and obligations in your state, please visit your state’s family court website.
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Source: https://www.thebalancemoney.com/how-child-support-payments-are-calculated-2997973
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