Child Support

California has adopted a statewide uniform approach to the calculation of child support (Family Code 4055). The statutory framework provides for a "a system of standards and procedures. . .[which] are used by courts in determining . . .child support in each case." (County of San Diego v. Sierra, (1990), 217 Cal.App.3d 126, 130-130).

Generally the formula is applied in a rigid manner with only statutorily carved out areas for judicial discretion (Estevez v. Superior Court (1994) 22 Cal.App.4th 423). Recently, however, an appellate court has held that an extraordinarily high income earning parent need not reveal certain financial information if the high income parent pays a "reasonable" amount of support (Johnson v. Superior Court (Tate) 66 Cal.App.4th 68, 77 Cal.Rptr.2d 624 (2nd Dist., 1998)). Family Code 4057(b)(3) provides that the presumptive correctness of a child support award based upon the statutory guidelines may be rebutted if "the parent being ordered to pay child support has an extraordinarily high income and the amount determined under the formula would exceed the needs of the children" (Family Code 4057(b)(3)).

Unlike spousal support orders which generally terminate upon the death of either spouse, child support orders survive the death of the payor parent, and remain a charge against the payor's estate (Taylor v. George (1949) 34 Cal 2d 552, 212 P2d 505). Note that Social Security or Railroad Retirement Act benefits if paid to a child on account of the death of a payor parent generally are not a credit against child support owed, but may be a credit if paid on account of retirement or disability (Family Code 4504, In re Marriage of Bertrand (1995, 3rd Dist.) 33 Cal.App.4th 437, 39 Cal.Rptr.2d 151). On a motion to modify child support, however, a court may consider such payments made to the child on account of the death of the payor parent (Bertrand, supra).

The statutory formula for calculating child support is complex, and almost always calculated with the assistance of special computer software. If you want to try calculating the amount by hand, here is the formula:

CS=K[HN - (H)(TN)]

CS = The amount of child support. If there is more than one child, CS is multiplied by the following amounts (Family Code 4055(b)(8):

Number of Children
Multiple
2
1.6
3
2
4
2.3
5
2.5
6
2.625
7
2.75
8
2.813
9
2.844
10
2.86

 

  K = The amount of income to be allocated to each parent. K is 1 + H (If H is less than or equal to 50, or 2 - H if H is greater than 50) times the one of the following weighted amounts depending upon the parents' total net disposable income per month (see Family Code 4055(b)(3)):

Total Net Disposable Income Per Month
K
$0 - $800
.20 + TN / 16,000
$801 - $6,666
.25
$6,667 to $10,000
.10 + 1000/TN
Over $10,000
.12 + 800/TN

 

HN = The higher earner's net monthly disposable income.

H = The approximate percentage of time that the higher earner has or will have primary physical responsibility for the children compared to the other parent. If the time sharing-arrangements are different for different children, then H is the average of the approximate percentages of time that the higher income-earning parent spends with each child (see Family Code 4055(b)(1)(D). If the hearing is held on default, and the non-custodial parent is the higher income earner, then H is set at zero. In default cases if the defaulting party is the custodial parent, and is the higher income earner, H is set at 100 (unless other evidence is presented to the court) (Family Code 4055(b)(6)).

TN = The total net monthly disposable income of both parents.

To determine "Net Disposable Income," first, determine "Gross Income."

 

Gross Income

Gross Income Defined: "Gross Income" means income from "whatever source derived." It includes but is not limited to:

1. Income such as commissions, salaries, royalties, wages, bonuses, rents, dividends, pensions, interest, trust income, annuities, workers' compensation benefits, unemployment insurance benefits, disability insurance benefits, social security benefits, and spousal support actually received from a person not a party to the proceeding to establish a child support order.

2. Income from the proprietorship of a business, such as gross receipts from the business reduced by expenditures required for the operation of the business.

3. In the discretion of the court, employee benefits or self-employment benefits, taking into consideration the benefit to the employee, any corresponding reduction in living expenses, and other relevant facts.

In determining the amount of support, the court may consider earning capacity of a party rather than the actual amount of his or her income (Family Code 4058(b), see generally, Marriage of Regenry (1989) 214 Cal.App.3d 1367. This prevents a parent from deliberately avoiding gainful employment in order to reduce the amount of child support payable to the other parent (Philbin v. Philbin (1971) 19 Cal.App.3d, 115, 121). Avoiding gainful employment is sometimes an attempted tactic used by a payor parent to retaliate against the recipient parent, or for other personal reasons. A party's earning capacity is defined as a party's having both: 1) the ability to work, and 2) the opportunity to work (In re: Marriage of Hinman (1997) 55 Cal.App.4th 988 fn. 6) (modifying the three part test of Regenry, supra to two prongs). The earning capacity of an incarcerated parent therefore will be determined based upon the availability of jobs within the correctional facility in which he or she is incarcerated (Oregon v. Vargas (99 D.A.R. 2713 (5th Dist.).

In determining support, the above list of sources of "gross income" is not exhaustive. For example, lottery winnings would be considered an available source (County of Contra Costa v. Lemon (1988 1st Dist.) 205 Cal.App.3d, 683, 252 Cal.Rptr. 455), and funds diverted from income to debt cancellation are considered an available source (In Re Marriage of Kirk (1990, 4th Dist.) 217 Cal.App.3d, 597, 266 Cal.Rptr. 76)

There are some sources of income which are not considered part of gross income. They are: income derived from child support payments actually received, and income derived from any public assistance program, eligibility for which is based on a determination of need. Child support received by a party for children from another relationship is not included as part of that party's gross or net income. (Family Code 4058(c)). Student loans now have been expressly held to be excluded from gross income (Rocha v. Rocha 68 Cal.App.4th 514, 80 Cal.Rptr.2d, 376)

In cases where the payor party has a net disposable income of less than $1000.00 per month, the court may make a low-income adjustment (Family Code 4055(b)(7), 4055(c)) In allocating the award of child support among the parents' several children, the court allocates the amount for the youngest child as the amount for one child, and the difference between the amount for two children and the amount for one child to the next youngest child. Similar allocations are made for additional children (Family Code 4055(b)(7)) (Formerly Family Code 4055(b)(8)).

 

Net Disposable Income

In determining Net Disposable Income, there are specified allowed deductions from Gross Income, they are (Family Code 4059):

1. Income Taxes: The state and federal income tax liability resulting from the parties' taxable income is deductible. However, federal and state income tax deductions must bear an accurate relationship to the tax status of the parties (i.e., single, married, married filing separately, or head of household) and the number of dependents. State and federal income taxes must be those actually payable (not necessarily the current withholding) after considering the appropriate filing status, all available exclusions, deductions, and credits. Note that unless the parties stipulate otherwise, the tax effects of spousal support is not considered in determining the net disposable income of the parties for determining child support, but is considered in determining spousal support (See Family Code, Article 3, commencing with 4330), Part 3. The child support computer software calculates the taxes for each party provided the income, deductions, and exemption information is accurately entered.

2. FICA (commonly called "Social Security"): Federal Insurance Contribution Act (FICA) deductions or an amount not to exceed that allowed under FICA for persons not subject to FICA are deductible, provided that the deducted amount is used to secure retirement or disability benefits for the parent.

3. Union Dues and Retirement Benefits: Deductions for mandatory union dues and retirement benefits are allowed, provided they are required as a condition of employment. This is an important consideration. A parent voluntarily contributing to an IRA or 401-k, the contributions to which are not a requirement of employment may not be deducted from gross income.

4. Health Insurance: Deductions for health insurance or health plan premiums for the parent and for any children the parent has an obligation to support and deductions for state disability insurance premiums are allowed.

5. Child Support and Spousal Support (other relationships): Any child or spousal support actually being paid by the parent pursuant to a court order, to or for the benefit of any person who is not a subject of the pending order to be established by the court may be deducted from gross income. If there is no existing court order for those payments, the court may allow a deduction for any child support actually being paid, (which may not exceed the amount established by the guideline (formula)), for natural or adopted children of the parent not residing in that parent's home, who are not the subject of the order to be established by the court, and of whom the parent has a duty of support. Note that unless the parent proves payment of the support, no deduction is allowed for those payments.

6. Job-Related Expenses: Job-related expenses. The court has discretion in this area. The court must consider whether the expenses are necessary, the benefit of the expenses to the employee, and any other relevant facts.

7. Special Hardship Deduction: A deduction for hardship, as defined by Sections 4070 to 4073 of the Family Code, inclusive, and applicable published appellate court decisions may be deducted. The amount of the hardship may not be deducted from the amount of child support, but must be deducted from the income of the party to whom it applies. In applying any hardship under paragraph (2) of subdivision (a) of Section 4071 of the Family Code, the court must seek to provide equity between competing child support orders.

In deciding whether to award a deduction for hardship, the court will consider (Family Code 4071):

1. Extraordinary health expenses for which the parent is financially responsible, and uninsured catastrophic losses.

2. The minimum basic living expenses of either parent's natural or adopted children for whom the parent has the obligation to support from other marriages or relationships who reside with the parent. The court may allow these income deductions as necessary to accommodate these expenses after making the deductions allowable under "1" above.

Note that the maximum hardship deduction under paragraph "2" above, for each child who resides with the parent may be equal to, but must not exceed, the support allocated each child subject to the order. For purposes of calculating this deduction, the amount of support per child established by the statewide uniform guideline is the total amount ordered divided by the number of children and not the amount established under Family Code 4055(b)(7) regarding allocation of child support. (Formerly Family Code 4055(b)(8) (See above)).

Note that it is pursuant to Family Code 4059(g) (hardship) and Family Code 4071, that a court may allow a deduction for a parent's expenses for a child who resides with that parent. Section 4071.5 of the Family Code which denies a court discretion to consider those expenses if the children for whom a support order is to be made are AFDC recipients, has been held unconstitutional on equal protection grounds in County of Orange v. Ivansco (1998), 67 Cal.App.4th 328, 78 Cal.Rptr.2d 886.

The amount of support ordered when based upon the statutory guideline amount is presumptively correct (Family Code 4057(a)). The presumption may be rebutted upon a showing of one or more of the factors enumerated in Family Code 4057(b) as follows:

1. A stipulation between the parents regarding the amount of support (Family Code 4065);

2. The deferred sale of the family residence to pay child support (Family Code 3800);

3. The payor parent has an extraordinarily high income, and the child(ren)'s needs are adequately met;

4. The failure of a parent to contribute to the needs of the child(ren) commensurate with the custodial time of that parent;

5. An unjust result in applying the formula for one or more of the following reasons:

(a) Different time-sharing arrangements for different children;

(b) Equal time-sharing among the children, but one parent has a much lower or higher percentage of income used for housing than the other parent, or;

(c) Special needs children who require child support greater than the guideline amount.

 

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Copyright © 1999 Roy A. Barry, all rights reserved.