when more creates havoc-child support in multiple families andrew southmayd, commissioner, delaware...

WHEN MORE CREATES HAVOC-CHILD SUPPORT IN MULTIPLE FAMILIES

• Andrew Southmayd, Commissioner, Delaware Family Court, Sussex County

• Nicholas Palos, Support Magistrate, Kings County (Brooklyn, NY) Family Court

• Scott Cade, Regional Vice President for Operations, ACS, Inc.

1

Objectives of Presentation

• Illustrate the unique difficulties in calculating child support orders where a parent has multiple children with multiple co-parents

• Recognize the difficulty in enforcing support orders for multiple families given the finite income pool available to the non-custodial parent

• Spark discussion of ways to address these problems which are fair to all parties concerned

2

Methodology of Presentation

• Presentation will be interactive

– While there is time for questions and answers at the end of the session, the audience should feel free to express comments of their own during the presentation

– If no voluntary interaction, the presenters reserve the right to solicit audience members involuntarily for their input

3

Methodology of Presentation

• Two jurists will demonstrate the mechanical and legal problems involved in multiple family situations– Description of each state’s support calculation

where multiple support obligations exist– Application of each state’s support calculation to

multiple obligation situations• Establishment of order• Modification of order• Enforcement of order

4

Multiple Family Factors Nationwide

Which children qualify?– Own household?– Order of support?

– Must it be paid?– No order and not in H/H?– Step-children?– All or just pre-born?– # Limitation?

Policies:– Dilution of resources;– Disincentive to procreate;– Equitable distribution;– Sustain obligor.

Modification: – Is a new child or new

order a substantial change of circumstance?

Delaware Child Support Formula

In the context of Multiple Obligations

Methods available:• Amount of other orders

– Deduction from income– Must it be paid?– All or just pre-born?– Race to the courthouse?

• Percentage reduction to:– Gross or net Income?– Only portion of income?– Order itself?– Portion of the order?

• Gross Income for each parent minus– Taxes (S-1 for everybody);– Health insurance, pension (up to 3%), union dues,

disability insurance and “other”;– Self support allowance (currently $1120/mth)

• With no other children, this is the net income each parent has available for child support, BUT if there are other children . . .

Adjustment for the Support of Other Dependent Children

• Net income for each parent is adjusted one more time based upon the number of “other” children the parent must support:

Number of children Adjustment for Other children

0 100%

1 82%

2 73%

3 or more 67%

Qualifications

1. Child support order (paid or not); or

2. Child(ren) live in your household; or

3. Evidence of a “pattern of support”; but

4. Step-children are NOT included.

Order of birth is irrelevant; under Delaware law all children are

equal.

Back to the Formula

Having adjusted for “other children”, each is assigned a (%) share for the “Primary” needs of the children:1.Primary Support allowance;2.Daycare necessary for employment;3.Health Ins. allocable to children (new); and4.Private school (if found affordable)

Primary Support allowances

Number of Children Primary Support Allowance

I $ 510

2 $810

3 $1090

Each additional + 250

Standard of Living AdjustmentAfter each parent is assessed their proportion share of primary support, a percentage (SOLA) is applied to any remaining income:

Number of Children SOLA

1 17%

2 24%

3 29%

Each additional +4%

Credits

• Primary & SOLA obligations combine for the Gross Obligation; then each parent retains:1. Primary allowance for children in own home;2. Daycare, allocable health insurance & private school

tuition paid to providers; 3. Per capita SOLA for children in own home; and4. Parenting Time Credit (% based on #overnights).

• Gross Obligation minus credits = Net Obligation (i.e. the support order) unless . . .

Self Support Protection (aka Maximum Allowable Obligation)

• If the self support allowance = minimum amount necessary for a person to remain productive in the workplace;

Self-Support Protection 2

• And even with the Adjustment for the Support of other Children, multiple orders can push low income obligors far below Self Support allowance;


• Then low income obligors with multiple orders are doomed to fail because they lack adequate resources to remain productive.


• Percentage of net income (after self support) based upon # of “other children”.

• Preserves 80% to 100% self support allowance.

• Minimum order rules still apply.

Summary• DE discounts net income to accommodate the

needs of other children;• Actual amounts of other orders are irrelevant.• DE gives credit to both obligors and obligees;• DE is not concerned with order of birth;• No credit for step-children;• Birth or adoption of add’l children is a substantial

change of circumstances for modification;• For low income obligors, an individual order

cannot exceed a certain % of net income.

New York’s Child Support Standards

Act

In the context of Multiple Obligations

http://www.50states.com/newyork.htm

Determination of Parental Income • Include

– Salary– Self-Employment Income – Social Security Benefits– SSI– Rental Income– Investment Income– Money Goods Services from others– Employee Perks– Unemployment Benefits– Pension– Spousal Support

21

Determination of Parental Income 2

• Credit– FICA Taxes (Social Security,

Medicare, Self-Employment)– New York City or Yonkers

City Income Taxes– Child Support actually paid

for other children• Court order• Written agreement

– Spousal Support

22

Determining base support• Determine each parent’s adjusted income• Determine combined parental income and each parent’s

share• Apply the applicable child support percentage to the

combined parental income

• The result is prorated between the parents based on shares of combined income 23

Number of children in household Applicable child support percentage

1 17%

2 25%

3 29%

4 31%

5 or more At least 35%

“Add-ons”

• Mandatory Add-ons– Reasonable child care expenses– Cost of Medical Insurance coverage

• Discretionary Add-ons– Educational expenses

• Private primary/secondary school• College

– Enrichment Activities

24

“BCSO”

• Each parent’s Basic Child Support Obligation consists of:– Pro-rata share of amount calculated with child

support percentages PLUS– Pro-rata share of mandatory add-ons PLUS– Assigned share of discretionary add-ons PLUS– Pro-rata share of unreimbursed health care

expenses25

Self-Support Reserve

• Self-Support Reserve is 135% of the poverty income guidelines amount for a single person

• Currently $14,701.50 annually

• Includes Federal and New York State income taxes

26

Self-Support Reserve 2• When NCP’s share of the

BCSO reduces income to an amount less than the self-support reserve– Difference between income and

self-support reserve OR– $600.00 per year

• Court must choose the option which provides the greater amount of support

27

Self-Support Reserve 3

• When NCP’s share of the BCSO reduces income to an amount less than the federal poverty income guidelines for a single person– Difference between income

and self-support reserve– No mandatory minimum

support award

28

Deviation from guidelines

• Deviation based on finding that guidelines amount is unjust or inappropriate

• Nine specific statutory factors and one general factor– Needs of children for who’s support

the non-custodial parent is legally responsible and which has not been deducted from income

• Financial resources of any other person obligated to support children must be considered

• Resources available for those children less than resources to support subject children

29

Summary• NY is a race to the courthouse state – Whichever

household is first gets to take their slice from the largest income pie

• Formalized current child support actually paid is deducted from income before application of guidelines

• Needs of other children to whom NCP owes a duty of support but who are not formally supported may be a basis to deviate from guidelines calculations

• Children conceived, born or adopted after entry of an order are not bases to modify an existing order of support

• Entry of a subsequent order of support is not a basis to modify an existing order of support

30

CALCULATION OF ORDER• EXAMPLE 1: Joe has been brought into court by

Linda, the mother of his 3 year old daughter and his 3 month old son. He is employed by a local business and earns $550.00 per week. Linda is employed and earns $300.00 per week. He has another child with Diane, a 2 year old daughter, and Joe was ordered by a court to pay $74.00 per week for the support of the 2 year old, including $10.00 per week for child care. Linda incurs childcare expenses in the amount of $75.00 per week to provide care for the children while she is at work.

31

Delaware Example 1

Joe & Linda

N

ET

IN

CO

ME

AV

AIL

AB

LE

1 Gross Income Wages 2d Job self taxable nontax Father Mother

Father

2383

2383 Mother 1487 1487

2 Taxes

Federal FICA self State local Father

249 135 76 460

Mother 115 84 31 230 3 Deductions Health Pension Union Disability other Father

Mother

4 Self Support Allowance* 4 $ 1120 $ 1120

5 Net Income after Self-Support (Line 1 – Lines 2, 3 & 4) 5 803 137

6 Number of Children not of this union supported by each party 6 1 0

7 Adjustment for Support of Dependent children (Table A) 7 81% 100% Total

8 Net Available for Primary Support (Line 5 x Line 7) 8 650 137 787

PR

IMA

RY

9 Share of Total Net Available (Line 8 ÷ Line 8 Total) 9 83% 17% 100%

10 Number of Children of this union in each household 10 2 2 11 Primary Support Allowance (Table B) 11 1090 810

12 A – Child Care expenses necessary for parent to work 12A 325

B – Health Insurance Allocable to children 12B

C - Private School Tuition | other primary expenses 12C

13 Primary Need (Line 11 Total + Lines 12A & B Totals) 13 1135

14 Primary Support Obligation (Line 9 x Line 13) 14 942 193

SO

LA

15 Net Available for SOLA (Line 8 minus Line 14) 15

16 Standard of Living Adjustment Percentage (Table B) 16 24% 24%

17 A – SOLA Obligation (Line 15 x Line 16) 17A

B – SOLA per child (Line 17A Total ÷ Line 10 Total) 17B

18 Gross Monthly Obligation (Line 14 + Line 17A) 18 650 137

CR

ED

ITS

19 Primary/SOLA retained(Line 10 x per child SOLA + Line 11) 19 562 20 Other primary paid by each parent (Lines 12A, B & C) 20 225

21 A - Parenting Time Percentage (Table C) 21A % %

B – Parenting Time Adjustment (L21A x other party’s L19) 21B

22 Maximum Allowable Obligation (Line 7 x Line 8) 22 527 137

23 Net Monthly Obligation (Line 18 minus Lines 19, 20 & 21B but not more than Line 22) 23 527

33

A. Calculate Parental Income

Gross Income

Social Security Medicare

NYC Income Tax

Child Support Paid AGI Pro Rata

Linda $15,000.00 $655.20 $226.20 $104.52 $14,014.08 38%Joe $28,600.00 $1,201.20 $414.70 $611.90 $3,848.00 $22,524.20 62%B. Determine BCSO

1. Income Component CPI PercentageAmount Generated Pro rata shares

$36,538.28 17% $9,134.57 Linda $3,471.14Joe $5,663.43

2. Add-ons Child Care $3,848.00

Linda $1,462.24Joe $2,385.76

TOTAL BCSOTotal Linda Joe D. Self-Support Check

Income Based $9,134.57 $3,471.14 $5,663.43 SSR ADJUSTMENTAdd-Ons $3,848.00 $1,462.24 $2,385.76 Joe's AGI 22,524.20 $22,524.20

TOTAL $12,982.57 $4,933.38 $8,049.19 Joe's BCSO 8,049.19Self-Support $14,701.50

Monthly $670.76 Remaining Income 14,475.12

Annual BCSO $7,822.70Monthly BCSO $651.89

New York Calculations

CALCULATION OF ORDER• Example 2: Jane is Joe’s wife. She is the mother of

his 15 year old son, his 14 year old daughter and 11 year old son. Although Joe has been voluntarily providing for the three children, she is now worried that her three children will suffer a hit to their standard of living because of the new support order issued to Linda. She filed a new application to establish an order for the three children. Complicating matters, Jane is currently unemployed, and receives $250.00 per week in benefits.

34

Delaware Example 2

Joe & Jane

N

ET

IN

CO

ME

AV

AIL

AB

LE


Father

2383

2383 Mother 1487 1487

2 Taxes


249 135 76 460


Mother






PR

IMA

RY



12 A – Child Care expenses necessary for parent to work 12A





SO

LA






CR

ED

ITS

19 Primary/SOLA retained(Line 10 x per child SOLA + Line 11) 19 675 20 Other primary paid by each parent (Lines 12A, B & C) 20





36


Gross Income

Social Security Medicare

NYC Income

TaxChild Support

Paid AGI Pro Rata

Jane $13,000.00 $0.00 $0.00 $0.00 $13,000.00 47%

Joe $28,600.00 $1,201.20 $414.70 $611.90 $11,670.88 $14,701.32 53%B. Determine BCSO

1. Income Component CPI Percentage Amount GeneratedPro rata shares

$27,701.32 29% $8,033.38

Jane $3,775.69

Joe $4,257.69

Total Jane Joe D. Self-Support Check

Income Based $8,033.38 $3,775.69 $4,257.69 SSR ADJUSTMENT

Add-Ons $0.00 $0.00 $0.00 David's AGI $14,701.32 $14,701.32

TOTAL $8,033.38 $3,775.69 $4,257.69 David's BCSO $4,257.49

Self-Support $14,701.50

Monthly $354.81 Remaining Income $10,443.83

Annual BCSO $600.00

Monthly BCSO $50.00


CALCULATION OF ORDER

• Example 3: David is married to but separated from Emilie. They have five children together. David’s new girlfriend, Elizabeth, gave birth to twins last year. David earns $600.00 per week. Emilie is self-employed, and her business generates $200.00 per week in profits, but she does not file any tax returns. Elizabeth earns $750.00 per week, but incurs $250.00 per week in child care expenses. Elizabeth seeks an order of support .

37

Delaware Example 3A

David & Elizabeth

NE

T IN

CO

ME

AV

AIL

AB

LE


Father

2600 2600 Mother 3250 3250

2 Taxes


249 135 76 460


Mother






PR

IMA

RY


10 Number of Children of this union in each household 10 2 2 11 Primary Support Allowance (Table B) 11 810

12 A – Child Care expenses necessary for parent to work 12A 1083





SO

LA

15 Net Available for SOLA (Line 8 minus Line 14) 15 59 138


17 A – SOLA Obligation (Line 15 x Line 16) 17A 14 33 47

B – SOLA per child (Line 17A Total ÷ Line 10 Total) 17B 24


CR

ED

ITS

19 Primary/SOLA retained(Line 10 x per child SOLA + Line 11) 19 858 20 Other primary paid by each parent (Lines 12A, B & C) 20 1083





39


Gross Income Social Security Medicare NYC Income Tax Child Support Paid AGI Pro Rata

Elizabeth $39,000.00 $1,638.00 $565.50 $783.00 $36,013.50 55%

David $31,200.00 $1,310.40 $452.40 $556.80 $0.00 $28,880.40 45%B. Determine BCSO


$64,893.90 25% $16,223.48

Elizabeth $8,922.92

David $7,300.56

2. Add-ons

Child Care $13,000.00

Elizabeth $7,150.00

David $5,850.00

Total Elizabeth David D. Self-Support Check


Add-Ons $13,000.00 $7,150.00 $5,850.00 David's AGI $28,880.40

TOTAL $29,223.48 $16,072.92 $13,150.56 David's BCSO $13,150.56 Self-Support $14,701.50

Monthly $670.76 Remaining Income $15,729.84 Annual BCSO

C. Resource Balancing Test Adjustment to balance resources Monthly BCSO $1,310.82

David's Income After BCSO $15,729.84 David's BCSO $13,150.56

Federal Income Tax Withheld $832.00 Total Resources $24,226.64

New York State Tax Withheld $1,071.20 Available Resources $37,377.20

Net Income After Support $13,826.64 Resources per child $3,737.72

Emilie's Income $10,400.00 Ordered Support $7,475.44

Total Resources $24,226.64 Monthly Support $622.95

Available Resources per child $3,460.95

David's BCSO $13,150.56

Resources per child $6,575.28


CALCULATION OF ORDERS• Example 4: David is married to but separated

from Emilie. They have five children together. David’s new girlfriend, Elizabeth gave birth to twins last year. David earns $600.00 per week. Emilie is self-employed, and her business generates $200.00 per week in profits, but she does not file any tax returns. David is also paying Elaine $125.00 per week for the support of their two children. Elizabeth earns $750.00 per week, but incurs $250.00 per week in child care expenses. Elizabeth seeks an order of support .

40

Delaware Example 3B David & Emily

N

ET

IN

CO

ME

AV

AIL

AB

LE


Father

2600 2600 Mother 1487 1487

2 Taxes


282 147 87 516


Mother






PR

IMA

RY








SO

LA






CR

ED

ITS






42


Gross IncomeSocial

Security Medicare NYC Income Tax Child Support Paid AGI Pro RataElizabeth $39,000.00 $1,638.00 $565.50 $848.00 $35,948.50 62%David $31,200.00 $1,310.40 $452.40 $502.40 $6,500.00 $22,434.80 38%B. Determine BCSO


$58,383.30 25% $8,033.38 Elizabeth $4,980.70David $3,052.68

2. Add-ons Child Care $13,000.00

Elizabeth $8,060.00David $4,940.00

Total Elizabeth David D. Self-Support Check

Income Based $8,033.38 $4,980.70 $3,052.68 Add-Ons $13,000.00 $4,980.70 $3,052.68 David's AGI $22,434.80



C. Resource Balancing TestDavid's Income After BCSO $16,379.44Federal Income Tax Withheld $832.00New York State Tax Withheld $1,071.20Net Income After Support $14,476.24Emilie's Income $10,400.00Total Resources $24,876.24Available Resources per child $3,553.75David's BCSO $6,105.36Resources per child $3,052.68


CALCULATION OF ORDER• Example 5: David and Emilie are married but have

been separated for three years. They have three children together. He earns $750.00 per week and she earns $700.00 per week. David recently ended a relationship with Elizabeth, soon after learning she was pregnant with their child. Elizabeth earns $350.00 per week. David has moved back in with Emilie. Prior to the birth of Elizabeth’s child, she files to establish paternity and to obtain support for the child. Before Elizabeth gives birth to her child, Emilie files for an order of support, and the parties stipulate to an order for $500.00 per week.

43

Delaware Example 4A David and Emily

N

ET

IN

CO

ME

AV

AIL

AB

LE


Father

3250

3250 Mother 3033 3033

2 Taxes


379 184 123 686


Mother






PR

IMA

RY








SO

LA






CR

ED

ITS






LIZ

Delaware Example 4B David and Emily

N

ET

IN

CO

ME

AV

AIL

AB

LE


Father

3250

3250 Mother 3033 3033

2 Taxes


379 184 123 686


Mother






PR

IMA

RY








SO

LA






CR

ED

ITS






46


Gross Income Social Security MedicareNYC Income

Tax Child Support Paid AGI Pro Rata

Elizabeth $18,200.00 $764.40 $263.90 $214.40 $16,957.30 63%

David $39,000.00 $1,638.00 $565.50 $752.00 $26,000.00 $10,044.50 37%B. Determine BCSO


$27,001.80 17% $4,590.31

Elizabeth $2,891.90

David $1,698.41

2. Add-ons

Child Care $0.00

Jane $0.00

Joe oTotal Elizabeth David D. Self-Support Check


Add-Ons $0.00 $0.00 $0.00 David's AGI $10,044.50 $10,044.50

TOTAL $4,590.31 $2,891.90 $1,698.41 David's BCSO $1,698.41Self-Support $14,701.50


Annual BCSO -$4,657.00


47

New York CalculationsA. Calculate Parental Income

Gross

Income Social Security MedicareNYC Income

TaxChild Support

Paid AGI Pro RataElizabeth $36,400.00 $1,528.80 $527.80 $796.80 $33,546.50 49%David $39,000.00 $1,638.00 $452.40 $848.00 $1,500.00 $34,561.60 51%B. Determine BCSO

1. Income Component CPI PercentageAmount Generated

Pro rata shares

$68,108.10 17% $11,578.38 Elizabeth $5,673.42David $5,904.97

2. Add-ons Child Care $0.00

Elizabeth $0.00David $0.00

Total Elizabeth David D. Self-Support CheckIncome Based $11,578.38 $5,673.42 $5,904.97 SSR ADJUSTMENTAdd-Ons $0.00 $0.00 $0.00 David's AGI $34,561.60


Self-Support $14,701.50


Annual BCSO

C. Resource Balancing Test Adjustment to balance resourcesMonthly BCSO $492.08

David's Income After BCSO David's BCSOFederal Income Tax Withheld Total ResourcesNew York State Tax Withheld Available ResourcesNet Income After Support Resources per childEmilie's Income Ordered SupportTotal Resources Monthly SupportAvailable Resources per child David's BCSOResources per child

48


Gross Income Social Security Medicare NYC Income Tax

Child Support Paid AGI Pro Rata

Elizabeth $36,400.00 $1,528.80 $527.80 $796.80 $33,546.50 48%David $39,000.00 $1,638.00 $452.40 $848.00 $0.00 $36,061.60 52%B. Determine BCSO


$69,608.10 17% $11,833.38 Elizabeth $4,970.02David $6,153.36

2. Add-ons Child Care $0.00

Elizabeth $0.00David $0.00

Total Elizabeth David D. Self-Support CheckIncome Based $11,833.38 $4,970.02 $6,153.36 SSR ADJUSTMENTAdd-Ons $0.00 $0.00 $0.00 David's AGI $36,061.36

TOTAL $11,833.38 $4,970.02 $6,153.36 David's BCSO $6,153.36Self-Support $14,701.50

Monthly $512.78 Remaining Income $29,908.00Annual BCSO $600.00

C. Resource Balancing Test Adjustment to balance resourcesMonthly BCSO $512.78

David's Income After BCSO David's BCSOFederal Income Tax Withheld Total ResourcesNew York State Tax Withheld Available ResourcesNet Income After Support Resources per childEmilie's Income Ordered SupportTotal Resources Monthly SupportAvailable Resources per child David's BCSOResources per child


ENFORCEMENT OF ORDERS

• Multiple Families impact enforcement of orders in three distinct areas– Withholding of Support From Income

– Crediting and Distribution of funds

– Sanctions for failure to comply

49

EFFECT ON INCOME WITHHOLDING

• Multiple Families may impact income withholding in several ways– Aggregation of orders may exceed maximum

garnishment permitted by state law• Disposable income defined differently in each state• Each state sets its own limitation on the amount of

disposable income amenable to withholding– Withholding for support may subject to a lesser

percentage where the NCP Is supporting more than one family

50

EFFECT ON INCOME WITHHOLDING

• Where multiple income deduction orders result in a total which exceeds the maximum percentage of the NCP’s disposable income, the funds have to be allocated between all orders– Majority rule: Prorate between all orders– 3 States (Kansas, Texas and Washington): Divide

the funds equally between all orders

51

when more creates havoc-child support in multiple families andrew southmayd, commissioner, delaware...

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