Opinion
No. 86-223.
Decided January 13, 1987.
The Montana Child Support Advisory Council has moved herein that this Court, pursuant to Section 3-1-112(2), MCA, adopt and promulgate child support guidelines for use by judges and other officials who have the power to determine child support awards within this state.
On receipt of the motion, and of the proposed guidelines from the Council, we referred the proposals to the Uniform District Court Rules Commission for recommendations. The Commission on September 13, 1984 advised this Court in cause No. 86-443 herein that the Commission was neutral in the adoption of the guidelines.
The proposed guidelines are the result of a study by the Montana Child Support Advisory Council prompted by the enactment in 1984 of Title 42, Section 667, U.S.C. (Pub.L. 98-378, Section 18(a), 98 Stat. 1321). Under the federal statute each state must establish guidelines for child support award amounts within the state as a condition for having the state plan approved for participation in Public Health and Welfare programs of the federal government. Under federal regulations, the guidelines developed under the new law ". . . must be on specific descriptive and numeric criteria and result in a computation of the support obligation."
The Court having reviewed the proposed guidelines, and good cause appearing,
IT IS ORDERED:
1. The Guide for Determination of Child Support Obligations, dated October 1, 1985, prepared by the Montana Child Support Advisory Council and filed with the motion herein is hereby approved and adopted for use by judges and other officials who determine child support award amounts in this state.
2. The guidelines are not binding upon such judges and officials. We so order to prevent appeals based upon claimed failure to observe or follow the guidelines. Nonetheless, we recommend to such judges and officials, and to attorneys representing children for whom support awards must be made and their parents the use of such guidelines, especially to promote uniformity in these matters within the state and with other states, and to provide judicially determined awards compatible with the Public Health and Welfare objectives of the federal government.
3. The Clerk of this Court shall send to the Clerk of each District Court in this state, and to each judge and justice having judicial power to award or review child support payments, a copy of such guidelines. A further copy shall be sent to the Executive Secretary of the State Bar of Montana. Five copies shall be sent to the Hon. Robert Holter, District Judge, as movant and representative of the Council, to be furnished to the required federal authorities. Such service of copies shall be by ordinary mail.
4. The guidelines shall be effective immediately, but this Court will receive comments or suggestions for a period of six months, or until July 13, 1987; after which date, unless modified or otherwise affected by an order of this Court, this Order shall become final.
DATED this 13th day of January, 1987.
s/ J.A. Turnage, Chief Justice s/ John Conway Harrison, Justice s/ Frank B. Morrison, Justice s/ Fred J. Weber, Justice s/ John C. Sheehy, Justice s/ L.C. Gulbrandson, Justice s/ William E. Hunt, Justice
GUIDE FOR DETERMINATION OF CHILD SUPPORT OBLIGATIONS
Prepared by Montana Child Support Advisory Council October 1, 1985
Table of Contents
PageI. Introduction .................................................... 4 II. Use of Guideline ................................................ 4 III. Determination of Child Support Amount ........................... 5
1. Determination of gross income for each obligor parent ...... 5 2. Imputed or attributed income ............................... 5 3. Income of current spouses .................................. 6 4. Assets of income ........................................... 6 5. Determining net income available for support ............... 7 6. Application of the formula ................................. 7 7. Custody arrangements ....................................... 8 8. Age adjustments ............................................ 9 9. Low income parents ......................................... 9 10. Health insurance ........................................... 10 11. Extraordinary medical expenses ............................. 10 12. Child care expenses ........................................ 10 13. Other dependents ........................................... 11 14. Need for updating .......................................... 11
Support Guideline Table ........................................ 12
Worksheet #1 ................................................... 13
Worksheet #2 ................................................... 14
I Introduction
The statutory standards for determining child support obligations in Montana are contained in M.C.A. Sections 40-4-204 and 40-6-116 for dissolution of marriage proceedings and paternity actions. Although these standards offer broad guidance to persons involved in the establishment of child support obligations, the standards do not explain how to apply the standards to specific child support actions. The major purpose of this guide is to produce a uniform and equitable approach to applying the standard that is predictable, reasonable, simple to calculate, and which reflects the duty of both parents to support their children commensurate with their ability.
The economic principles underlying this guide are founded upon a formula developed by the Institute for Court Management of the National Center for State Courts. In concept, the formula is based on economic evidence that the costs of a child can be accurately depicted as a proportion of family income consumption. This proportion remains relatively consistent but does change predictably with changes in the level of household income and with the number and ages of the children. The formula, in turn, converts this data into percentages of net family income which are computed into a child support obligation.
For a detailed explanation of the economic evidence see Robert G. Williams, Development of Guidelines for Establishing and Up-dating Child Support Orders (National Center for State Courts; Denver, June 1985.).
This guideline calculates child support as a share of each parent's income estimated to have been spent on the child if the parents and child were living in an intact household. If one parent has custody, the amount calculated for that parent is presumed to be spent directly on the child. For the noncustodial parent, the calculated amount establishes the level of child support. For cases with split custody, or extensive sharing of physical custody, each parent's share of child support becomes the basis for determining his or her legal child support obligators.
II Use Of The Guideline
The guideline is designed for proper application to a broad range of cases and therefore is intended only to create a rebuttable presumption of the reasonableness of the child support obligations. As is true with any system, the application of this guide may not produce a child support payment that is fair or adequate in every instance. In applying the guide as a baseline from which to proceed, the parties or the court may make adjustments either upward or downward to reflect a particular inconsistent circumstance. The burden of showing why such deviation from the guide should be made, will be on its proponent. Any departure from the guide should be accompanied by a written statement which gives the reasons for deviation from the guide's direct application.
III Determination of Child Support Amount
Part 1. Determination of gross income for each obligor parent.
In the determination of child support obligations the explicit policy of this guideline is to make available for the benefit of the child(ren) sufficient funds to provide the standard of living the child would have enjoyed had the marriage not been dissolved. Accordingly, all income, from whatever sources, including business expense account payments for meals and automobiles to the extent that they provide the parent with something he or she would otherwise have to provide, will constitute gross income. Also to be included are such income as pensions, dividends, interest, trust income, proceeds from contracts, and so forth.
AFDC and other welfare benefits being received by an obligor parent are not to be included as income. In those cases where obligor parents are receiving Veterans Administration Disability, Supplemental Security Income, or other private disability benefits, they should be required as part of any court ordered support obligation to apply for those program benefits their children are entitled to receive. Depending on case-by-case circumstances, these benefits may replace in whole or in part any child support obligation.
All income should be annualized and copies of the last two years' tax returns should accompany financial statements as well as current wage stubs. Such annualization and examination of a two year period will provide a normalized pattern of income-producing abilities. Without such examination a temporary period of present unemployment or underemployment may indicate an unwarranted low amount of income available for support.
Part 2. Imputed or attributed income.
A particular problem exists for obligor parents who are voluntarily unemployed or underemployed. It is the policy of this guide that a parent will be excused from making a financial contribution only if he or she is physically or mentally incapacitated.
In cases where the obligor parent is not working or is not working at full earning capacity, the reasons for such a limitation on earnings should be examined. If the reason is a matter of choice, the local job market should be reviewed to determine what a person with the obligor parent's trade skills and capabilities could earn. Those typical earnings can then be imputed to the obligor parent for use in this guide. This approach is most useful when the obligor parent has a relatively stable and recent work history. The approach can also be used when the obligor parent has minimal skills and no work history by ascribing earnings based on a minimum wage for a full work week.
Alternatively, when the obligor parent is remarried to a person who is fully employed, and the obligor parent elects to stay at home as homemaker for the new spouse, a dollar value may be set which shall be considered as that obligor parent's income. The value for homemaker services should be assessed at no less than the federal minimum wage level for a forty hour week.
Part 3. Income of current spouses.
Stepparents and other adult household members are not generally responsible for the support of children of prior marriages or relationships. Consequently, these guidelines do not take into account income from other adults who may reside with either of the separated obligor parents. However, for subsequent modifications of initial support awards, due consideration may be given the effect of shared expenses. That is, a current spouse's income might be counted as reducing the obligor parent's living expenses and might, therefore, increase on a case-by-case basis the amount of income available for child support.
Part 4. Assets as income.
Actual or imputed income may not be by itself an adequate measure of the obligor parent's ability to pay child support. The obligor parent, for example may have savings, life insurance, vehicles, real estate, (other than permanent home), collections, and other assets in amounts unrelated to income. Unless account is taken of these holdings, preferential treatment will be given the obligor parent and the child(ren) will correspondingly be denied a share. This is not to imply that there must be a forced sale of these assets but that their dollar value be counted in determining funds available for support. Consequently, an amount equal to two (2) percent of the total value of the obligor parent's assets is to be added each month to that parent's total monthly income. The obligor parent can later decide whether, in fact, to liquidate assets or to make other expenditure adjustments to compensate.
The assessment of assets should exclude from consideration such non-income and non-depreciable producing assets of "reasonable" value such as a permanent home, farm land, furnishings, and one automobile. Also excluded should be income producing assets such as real property in the form of a farm or business, vehicles, tools, or instruments used to produce a primary source of income.
Part 5. Determining net income available for support.
The implementation of the policy of keeping primary focus on the needs of the child(ren) requires that from each obligor parent's income only a minimum of exclusions be allowed. Therefore, from gross income only the following are subtracted as deductions: federal and state income taxes; FICA; union dues, retirement contributions, uniforms, etc., which are required as a condition of employment and are not reimbursed by the employer; legitimate business expenses; and health insurance if the benefits are maintained for the obligor parent's dependents, including the child(ren) of the action at hand.
Child support payments owed for children of the obligor parent not of the union between the parents in this case which are actually being paid are being withheld from the obligor parent's wages by involuntary wage assignment or other similar legal process, may be excluded from gross income to the extent that such withholding actually occurs.
Deductions made by an employer from the obligor parent's wages for credit unions or merely for the convenience of the obligor parent will not be recognized.
Where income has been imputed to a stay-at-home homemaker, the permissible deductions will not be permitted since none are being made.
Part 6. Application of the formula.
For ease of use, the formula is manifested by a table which has a series of percentages differing by income level, number of children, and age of children. To determine child support from this table, the net income of the two parents is added together. This sum is then compared to the income level column, and the line showing the number and age of the children to arrive at a percentage figure. This percentage is then applied separately to each parent's income to establish in dollar amounts the support obligation for each parent.
For example, father and mother are divorced. Neither has remarried. Father nets $7,849 annually; mother nets $6,600. The combined income is $14,448. Their only child, age 2, lives with mother. Referring to the table, child support is calculated as 19.7%, a support obligation of $128.85 results for father and $108.35 for mother. Since mother is the custodial parent, the $108.35 is retained by her. It represents the amount that is presumably spent directly on the child in the custodial household. The obligation of $128.85 per month incurred by the father is payable as child support to the mother.
Part 7. Custody arrangements.
Under these guidelines a total child support obligation is calculated separately for each parent without initial regard to custody. Subsequent to such determination, in sole custody arrangements the custodial parent for all the children will retain his or her share of the support obligation and the noncustodial parent pays his or her share to the custodial parent. If there is split custody of the children, each parent shall retain the share of the total child support owed to the child in his or her custody and pay the difference, if any, to the other parent for children in the other parent's custody.
When the obligor parents share joint physical custody (both parents have custody of the children more than 30% of a 365 day period), to avoid unnecessary transfers of funds, the "pay over" of each parent for the year should be determined by multiplying the monthly support obligation times the number of months the parent has custody. If one parent's yearly obligation is greater than that owed by the other, the excess amount shall be divided by 12 and paid monthly over the year.
For example, Parent A's support obligation is $300 per month and Parent B's obligation is $100. Parent A has custody for 4 months of the year and Parent B has the child the remainder. Thus, over a year, Parent A would pay to Parent B $300 times 8 months or $2,400; and Parent B would pay Parent A $100 times 4 months or $400. Accordingly, Parent A owes $2,000 per year more than Parent B owes to Parent A. To meet this obligation, Parent A should pay to Parent B $166.66 per month ($2,000 divided by 12 months).
For cases involving joint physical custody, the table presumes that direct expenses are incurred in approximate proportion to the duration of physical custody. This presumption should be reviewed carefully in the application of the table since some expenses may not be borne proportionately. For example, the parent having custody of the child during the major part of a school term may incur additional expenses for clothing, books, recreation, and so forth. Adjustments may be made in the amounts calculated from the table to reflect any such disparity.
Part 8. Age adjustments.
Studies of household expenditure patterns have found that spending levels for children are related to their age. The table makes provision for only two age brackets: 0-11 and 12-17. This is based on a general consensus that expenditures increase markedly for children in the twelve to seventeen range. The table thus has an advantage of concentrating higher child support awards during the teen years when the need for augmentation or "teenage premium" is greatest.
When the ages of the children require use of more than one line from the table, locate the per-child percentage from the correct age grouping and then divide the percentage by the number of children to get the percentage of the obligor parent's income allocated to that child.
For example, the combined net income of the parents of a 7 year old child and a 14 year old is $20,000 annually. The percentage for two children age 7 is 27.1% which is divided by two to arrive at a figure of 13.55% of net income for the 7 year old child. Likewise, the percentage for two 14 year olds is 33.5% which yields an obligation of 16.75% of net income for the other child thus the total obligation would be 30.3% of the parent's net income.
Part 9. Low income parents.
Regardless of the presumptive level derived from the table, an obligor should not be held to his or her full application of the table percentage if to do so would reduce the parent's standard of living below the poverty line. Where this will occur, child support should be established on a case-by-case basis. Except in unusual adverse circumstances, a minimum order of no less than $50.00 should be set in all cases to establish the principle of payment and to lay the foundation for increased orders when the parent's income increases.
Part 10. Health insurance.
Under state law, every decree, judgment or order establishing a child support obligation and every modification of an existing order must include a provision requiring the parents to obtain medical insurance on the child in addition to the child support obligation. If health insurance on behalf of the child is carried by a parent, the parent's net cost of the child's share of the premium is allowed as a deduction from gross income.
Insurance deductible, medical, dental, and optical expenses which are not covered by insurance should be pro-rated between the parents based on the net income of each.
Part 11. Extraordinary medical expenses.
Any extraordinary medical expenses which are likely to be reoccurring during the minority of the child should be pro-rated between the parents and added to the basic child support obligation. Extraordinary medical expenses include physical therapy, special education, mental disorders, and any otheruninsured chronic health problems which are likely to occur on a periodic basis.
The amount to be paid each month for extraordinary medical expenses may be determined by adding a monthly average of past costs if future costs are expected to be comparable, or by adding extraordinary medical expenses to the child support obligation on a monthly as-incurred basis with the custodial parent billing the noncustodial parent accordingly.
Part 12. Child care expenses.
Work or training related child care expenses are a mutual responsibility of both parents and are to be apportioned between them based on their respective levels of net income. Because child care expenses may be of indeterminate duration, such expenses are to be considered as a supplement to the child support established by the table and are to be paid only during those times when child care expenses are actually being incurred. For this reason, orders establishing the dollar contribution of a parent toward child care costs should set this amount as a separate item in the order.
Determination of a monthly child care obligation for the purpose of this guide should be based either upon annualized, average costs of receipted expenses, or, when the history of such expenses are not available, upon estimates based on the average necessary monthly costs of such services.
Part 13. Other dependents.
As regards the treatment of other dependents, this guide uses a "first mortgage" approach in which children of prior marriages or relationships are given priority over subsequent children. This policy is based on reason and economic theory. Both suggest that the problems of inadequate support for children of multiple relationships would be alleviated if parents were discouraged from having more children unless they were capable of contributing adequately to the needs of all their offspring. Consequently, if support is sought for children of a subsequent relationship when there is a preexisting order for a child born from a previous relationship, priority would be given to the earlier children born by subtracting the amount actually paid from the parent's net income base. (See Part 5). This diminishes the amount of parental resources available to support children from the subsequent relationship.
Likewise, when this guide is being used to reevaluate a prior child support order for modification, the position is taken that the parent's prior child support obligations have absolute precedence over the needs of a new family. A parent's plea that his or her new responsibilities are a change in circumstances justifying a reduction in a prior child support award will not serve as a basis for a reduction of support. Creation of the new family is a voluntary act and that parent should decide whether he or she can meet existing support responsibilities and provide for new ones before taking that step.
Part 14. Need for updating.
Even if a support order accurately reflects the needs of the child and the resources of a parent when it is initially set, changes in circumstances that inevitably occur with the passage of time can seriously erode its value and reduce the equity for the parties. As a result, these guidelines recommend that all support orders and support agreements contain a provision for biannual review on instance of either party of the support obligation. Doing so will take into account changes in all factors considered by the guideline rather than focusing on only one or two variables.
SUPPORT GUIDELINES TABLE
$0 — $4,500- $ 8,500- $12,250- $4,499 $8,499 12,249 16,499
One Child 0-11 21.8 21.8 21.4 19.7 12-17 27.0 27.0 26.5 24.4 Two Children 0-11 33.8 33.8 33.2 30.7 12-17 41.8 41.8 41.0 38.0
Three Children 0-11 42.4 42.4 41.5 38.4 12-17 52.4 52.4 51.3 47.5
Four Children 0-11 47.7 47.7 46.8 43.4 12-17 59.0 59.0 57.9 53.6
Five Children 0-11 52.1 52.1 51.1 47.3 12-17 64.4 64.4 63.1 58.4
Six Children 0-11 55.7 55.7 54.6 50.5 12-17 68.9 68.9 67.5 62.4
$16,500- $20,000- $28,000 19,999 27,999 39,499 $39,500+
One Child 0-11 18.0 17.4 16.3 13.6 12-17 22.3 21.5 20.2 16.8
Two Children 0-11 28.0 27.1 25.3 21.1 12-17 34.6 33.5 31.3 26.1
Three Children 0-11 35.1 33.8 31.7 26.5 12-17 43.4 41.8 39.2 32.8
Four Children 0-11 39.6 38.2 35.7 29.8 12-17 48.9 47.2 44.1 36.9
Five Children 0-11 43.2 41.6 38.9 32.6 12-17 53.4 51.4 48.1 40.3
Six Children 0-11 46.2 44.5 41.6 34.9 12-17 57.1 55.0 51.4 43.1
For children in different age categories, pro-rate based or total number of children. Example: for one child age 7, one age 14, annual income of $18,000; use percentages for two children, divided by two — (28.0/2) + (34.6/2) = 31.3.
WORK SHEET #1 FOR DETERMINATION OF CHILD SUPPORTMother Combined Father
1. Gross Income (annualized) ______ ______
a. earnings ______ ______ b. imputed income ______ ______ c. percent of asset value ______ ______ d. other ______ ______ e. TOTAL ______ ______
2. Deductions (annualized)
a. taxes ______ ______ b. FICA ______ ______ c. union dues ______ ______ d. mandatory retirement ______ ______ e. mandatory health insurance ______ ______ f. child support preexisting ______ ______ g. medical insurance paid in behalf of child(ren) ______ ______ h. other ______ ______ i. Total ______ ______
3. Net Available Resources (line 1e minus line 2i) ______ ______
4. Combined Total Net Income ________
5. Percentage from Table ________%
6. Each Parent's Obligation ______ ______ (line 3 x line 5)
7. Monthly Support Obligation (line 6 divided by 12 months) ______ ______
WORK SHEET #2 FOR CHILD CARE COSTSMother Combined Father
1. Costs of Child Care (annualized) ________
2. Net Available Income ______ ______
3. Combined Net Income ________
4. Pro-rata share (line 2 divided by line 3) ______% ______%
5. Parent's Share of Costs (line 4 times line 1) ______ ______
6. Monthly Child Support Obligation (line 7, Worksheet #1) ______ ______
7. Child Support With Child Care Costs (line 5 plus line 6) ______ ______