Child Support Guidelines and the Shared Custody Arrangement

January 27, 2014 § 4 Comments

Shared parenting arrangements are more and more common in chancery court. The forms they take can vary considerably. In some cases there is a true joint custody provision whereby the children spend significant periods with each parent. In other cases, the time allocated between the parents is in the form of one parent having custody, and the other parent having extended visitation.

A question that arises from those cases is what impact the division of time has on a child support order. MCA 43-19-101(2) says that the statutory child support guidelines apply unless the court makes a finding ” … that application of the guidelines would be unjust or inappropriate under the criteria specified …” in MCA 43-119-103. One of those deviation criteria is set out in MCA 43-19-103(g), which reads:

The particular shared parenting arrangement, such as where the noncustodial parent spends a great deal of time with the children thereby reducing the financial expenditures incurred by the custodial parent, or the refusal of the noncustodial parent to become involved in the activities of the child, giving due consideration to the custodial parent’s homemaking services.

I interpret this to mean that, in order to invoke this exception, it would require both a showing that there is a custody arrangement involving “a great deal of time” spent with the child by the paying (“noncustodial”) parent, either: (a)  resulting in reduced financial expenditures by the other (“custodial”) parent; or (b) refusal of the paying parent to be involved in the child’s activities, inferentially resulting in increased expenses for the other parent. In either case, the court would be required to take into account the homemaking services of the non-paying parent.

A case illustrating application of Section 103(g) is Marin v. Stewart, decided by the COA on September 24, 2013. In that case, Marin argued on appeal that the chancellor had erred in not reducing his child support obligation due to a shared-custody arrangement. Judge Irving addressed the issue for the court:

¶10. Marin contends that section 43-19-103(g) is a criterion that the chancellor failed to consider. He argues that his voluntary extended-visitation arrangement with Stewart satisfies section 43-19-103(g) and would justify a downward deviation from the child-support guidelines. Marin did not raise this issue before the chancellor, and he is procedurally barred from asserting it for the first time on appeal. See Wilburn v. Wilburn, 991 So. 2d 1185, 1191 (¶14) (Miss. 2008).

¶11. Procedural bar notwithstanding, while section 43-19-101(2) requires that the chancellor make specific findings under the criteria in section 43-19-103 in order to deviate from the guidelines, it does not require that all criteria be considered in order for the findings to be sufficient. See Hensarling v. Hensarling, 824 So. 2d 583, 588 (¶¶13-15) (Miss. 2002) (affirming the chancellor’s reasoning that the guidelines were inappropriate when the chancellor’s findings only addressed two of the criteria under section 43-19-103); Smith v. Smith, 25 So. 3d 369, 374 (¶¶14-15) (Miss. Ct. App. 2009) (affirming the chancellor’s on-the-record findings when his findings only applied to two of the criteria listed under section 43-19-103).

¶12. Here, the chancellor stated on the record his reasons for deviating from the guidelines. Although his reasoning did not include an analysis of Marin’s visitation arrangement—which was not enough to warrant a deviation from the guidelines since there is no indication in the record that the visitation reduced Stewart’s financial expenditures—the chancellor’s findings on the record indicate that he deemed the guidelines inappropriate because fourteen percent of Marin’s adjusted gross income would have been less than what it costs to keep the child in daycare. The chancellor’s reasoning properly falls under section 43-19-103(i), as the child must go to daycare in order for Stewart to retain employment. Therefore, there is sufficient evidence to justify the chancellor’s determination that the application of the guidelines were inappropriate. This issue is without merit.

A few points:

  • Notice Judge Irving’s statement that “there is no indication in the record that the visitation reduced Stewart’s financial expenditures.” Again, if you want a downward reduction via subsection (g), you’d better muster up proof that your client’s actions reduced the other party’s expenditures.
  • It is important to realize that Section 103 does not mandate a reduction in child support because one of the factors is present. It only authorizes the court to deviate from the guidelines if one of them applies. The statute specifically states that the presumption of applicability of the Section 101 guidelines “may” be overcome; not “shall” be overcome.
  • Judge Irving also makes the obvious point that not all of the criteria spelled out in Section 103 need be considered by the court in order for findings to be sufficient.
  • Section 103(g) is both a sword and a shield. Note that its language would justify either a downward adjustment in one set of facts, or an upward adjustment in another set of facts.

Don’t assume that child support will be 14, or 20, or 22, or 24, or 26%. If you represent the paying party, study Section 103 to see whether there is a basis for a downward justification. If you represent the non-paying party, you just might find something in Section 103 that will justify an upward adjustment. That’s what happened in Marin v. Stewart, and it held up on appeal.

CHANGE TO THE CHILD SUPPORT GUIDELINES

May 8, 2013 § 2 Comments

MCA 43-19-101(e) has been amended, effective July 1, 2013, to provide that:

“In cases in which the adjusted gross income as defined in this section is more than One Hundred Thousand Dollars ($100,000) or less than Ten Thousand Dollars ($10,000), the court shall make a written finding in the record as to whether or not the application of the guidelines established in this section is reasonable.”

Right now the figures are $50,000 and $5,000.

This change is a recognition of changing economic realties. The original figures were established by the legislature in 1989 — 24 years ago.

BREAKING LOCK STEP WITH THE CHILD SUPPORT GUIDELINES

September 5, 2012 § 4 Comments

Holly and Christopher were divorced in 2007, and Holly had custody. Holly remarried and moved with the children to Pennsylvania.

Holly filed for modification in the Chancery Court of Lowndes County alleging that she was a stay-at-home mom who needed more money from Christopher to be able to pay for the children’s various expenses. She said that the $1,000 Christopher was paying was simply not enough to cover the children’s expenses, and she wanted the judge to apply the child support guidelines at MCA 43-19-101 to increase Christopher’s child support to what it should be at his increased income. 

The chancellor reviewed the parties’ financial statements, along with the other evidence in the record, and found that the statutory amount of child support payable by Christopher should be $1,400. Nonetheless, she denied Holly’s petition to modify based on the fact that Christopher had to pay the expense of visitation between Mississippi and Pennsylvania, and used that fact as a basis to depart from the statutory guidelines, pursuant to MCA 43-19-103, which sets out the critera the court is to use to justify any departure from the guidelines.

Holly appealed, and in Quinones v. Garcia, decided August 28, 2012, the Coa affirmed.

The appellate court rejected several of Holly’s arguments, including that the chancellor had improperly considered her current spouse’s income and that Christopher had manipulated his mandatory deductions, and held that it was proper for the chancellor to deviate from the statutory child support guidelines where the judge ” … makes ‘an on-the-record finding that it would be unjust or inappropriate to apply the guidelines in the instant case.'” Chesney v. Chesney, 910 So. 2d 1057, 1061 (¶7) (Miss. 2005) (citing McEachern v. McEachern, 605 So. 2d 809, 814 (Miss. 1992)). The court found substantial evidence to support the chancellor’s decision.

When you are trying a child support case, don’t get in lock-step with the idea that the statutory guidelines are inflexible. Look at the deviation criteria. If one of them applies — upward or downward — in your case, use it to your advantage. Offer evidence to support your argument. In this case, Christopher’s attorney saved his client $400 a month.

NEW FACTORS FOR UPWARD OR DOWNWARD DEVIATION IN CALCULATING CHILD SUPPORT

August 29, 2012 § Leave a comment

Significant amendments to the child support guidelines went into effect May 22, 2012, and I don’t think most attorneys are aware, because I don’t hear any proof addressing them in cases I try.

The amendments were to MCA 43-19-103, which sets out the bases that the court may use to deviate from the statutory child support calculation guidelines.

(i) Payment by the obligee of child care expenses in order that the obligee may seek or retain employment, or because of the disability of the obligee.

 (j) Any other adjustment which is needed to achieve an equitable result which may include, but not be limited to, a reasonable and necessary existing expense or debt.

So if you represent a payee, you need to highlight those daycare expenses necessary for employment, have your client talk about its impact on her budget,  and have her ask specifically for the court to take it into account in calculating child support. And disability of the payee is now a factor.

Also look at subsection j. It can be used by either payer or payee. Many families have significant debt incurred for the household, and the party who will have to pay it can look for some relief under this provision.

While you’re at it, check out all of the deviation factors. I hear a lot of cases where I never even hear any of them mentioned.

INCOME FOR CHILD SUPPORT

April 10, 2012 § 3 Comments

MCA § 43-19-101 should be familiar to you. It sets out the child support award guidelines. Since the guidelines are based on the payer’s income, it’s critical to understand just what and what is not included in income.

Subsection 3(a) tells us that we first have to “Determine gross income from all potential sources that may reasonably be available to the absent (i.e., noncustodial and paying) parent.” That’s an interesting phrase, “potential sources that may reasonably be available.” Notice that it does not refer to actual income. Potential sources that might come into play are to be considered.

Income under 3(a) includes, but is not limited to …

  • Wages and salary income. There is no exception for overtime; it’s included.
  • Income from self employment. Both reported and unreported income in this category is covered.
  • Income from commissions. Variable and seasonal income is included, and there are different approaches that the court can use to address it. Bonuses are included.
  • Income from investments. Dividends, interest and capital gains are income.
  • Interest income.
  • Interest earned from any trust account or property. It makes no difference whether it came from a “family trust” or similar creature; if it is income, it is included.
  • Paying parent’s portion of joint income of both parents. As reflected on the joint tax return.
  • Worker’s compensation.
  • Disability. You can read the rules for calculating child support when the payer is a social security recipient here.
  • Unemployment. No exemption from child support when the income source is unemployment benefits.
  • Annuity and retirement benefits.
  • IRA disbursements and withdrawals.
  • Any other payments made by any person, private entity, federal or state government, or any unit of local government. Any 1099 income would be included. Any refund of taxes paid in would be included.
  • Alimony.
  • Income earned from an interest in inherited property.
  • Any other form of earned income.

At the end of 3(a) is the statement: ” … gross income shall exclude any monetary benefits derived from a second household, such as income of the [paying party’s] current spouse.”

Section 3(b)(i) requires that overpayments of taxes are to be included in gross income. That means that income tax refunds must be added back in. For low-income taxpayers who claim benefits such as earned income credit and head of household status, this can mean an increase in gross income by as much as $3,000 to $5,000, based on what I’ve seen in court. The trick is to figure out how much of that refund was attributable to the paying parent, and not to his spouse, and then to calculate his tax rate, social security deduction, etc. Don’t expect the judge to do all that math for you on a hunch as to what the proper percentages might be.

As a rule of thumb, you would do well to include anything that might even remotely be considered income. The judge will. If it looks like income, sounds like income, smells like income and feels like income, it most likely is.

One would think that the statute and its intent are straightforward and unmistakeable, but not from what I see in court. Witnesses often testify that they did not include bonuses “because I don’t know whether I’ll get one this year,” or commissions because “I never know from month to month what my commissions will be,” or overtime because “I don’t know when I’ll get some more overtime.” That’s simply not the law. Irregularity and umpredictability are factors that the court can consider, but they don’t warrant completely excluding those items from income.

As a practice matter, are you asking questions in your interrogatories, depositions and requests for production that address all those types of income?

WHICH EXPENSES GET DEDUCTED FOR CHILD SUPPORT

March 20, 2012 § Leave a comment

In Coggins v. Coggins, handed down from the COA February 14, 2012, the appellate court was faced with the appellant’s claim that the chancellor erred by refusing his request to deduct rental investment expenses from gross income in order to arrive at adjusted gross income for calculation of child support.

The COA stated:

“¶19. The inclusion of income and deductions for calculating adjusted gross income for child support is primarily mandated by statute. According to section 43-19-101, in calculating gross income, the chancellor must consider ‘gross income from all potential sources,’ including wages and salary income, income from self-employment, and income from investments. As the chancellor explained, section 43-19-101(3)(b) lists several deductions that may be subtracted from the gross income figure, such as federal, state, and local taxes, social-security contributions, and mandatory retirement and disability contributions, but it does not list business expenses. Additionally, the Mississippi Supreme Court has allowed the deduction of legitimate business expenses in the case of a selfemployed payor-spouse. See Nix v. Nix, 790 So. 2d 198, 199-200 (¶¶3, 5) (Miss. 2001) (The chancellor considered the payor-parent’s legitimate business expenditures for reasons of equity, in order to determine available income for child support; he was a self-employed plumber.). However, the chancellor found no caselaw, nor do we, that allows for a deduction of expenses related to investments or supplemental business enterprises, which would be taken from the gross income of the payor-spouse. Therefore, in arriving at the adjusted gross income figure, the chancellor must include income from many sources, but not all expenses. The allowable deductions for this figure are statutory, and they differ from the allowable deductions for income tax purposes, upon which Bill appears to base his calculations. “

The court went on to point out that, although the statute allows for deduction of the expenses of self-employment, the appellant in this case was not self employed. The expenses he claimed arose out of investments that were a secondary source of income. His secondary employment resulted in a loss, and the COA said: “If [the appellant] opts to continue this rental venture at a loss, it should not be done to the detriment of his child.” The COA upheld the chancellor’s decision.

This case highlights the need for you to be quite familiar with with the child support guideline statute when you present child support issues to the court, and when you draft child support provisions in property settlement agreements. I urge you to read the guidelines and discover exactly what it is that should and should not be included in the calculation of child support.

While I’m on the subject, let me urge you (once again) NOT to list expenses on your 8.05’s as “mandatory” when they are not. The word “mandatory” so loosely used by so many of you is applied to all manner of deductions that simply do not meet the requirement of the statute. The statute limitss deductions to “legally mandated deductions.” That’s the exact phrase. So if there is a law that requires it to be deducted, it is a “legally mandated deduction.” That would include federal and state income taxes, social security, Medicare, and PERS for state employees. Health insurance (for the time being) is not legally mandated, nor are dental or cancer insurance, United Way, IRA contributions, etc., etc., etc. When you gratuitously label a deduction as “mandatory,” you are making the judge have to explain in the opinion why the deduction is not allowed. More work for the judge, which violates the cardinal rule — if you want to win, make it easier for the judge to find in your favor.

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