The Purpose of Child Support
Child support is a parent’s legal obligation to support their biological or adopted children. It is intended to account for the usual costs associated with raising children. Unless family court orders specify otherwise, parents obligated to pay child support generally are not legally required to make any contribution toward specific expenses for the children like supplies, clothing, or shoes.
When Does child Support End?
Child support orders presumptively terminate or end when the child turns eighteen unless the child is still in high school. In that case, the orders continue until graduation or the child’s nineteenth birthday, whichever comes first. Child support can be extended beyond these termination dates in special circumstances like, for instance, if the child has a permanent disability that requires specialized care.
Gross Income of Each Parent
Income of each parent is one of the biggest sources of controversy in contested child support cases. The Arizona Child Support Guidelines use “gross income” and broadly define it to include income from any source, including recurring gifts, cash or cash-like benefits, and even personal loans.
Overtime or Wages from Second Job
So remember last paragraph when we said the guidelines define gross income as income from any source? Well that is not always the case. Here is where the nuances of Arizona law start to complicate child support calculations.
Section 5(A) of the guidelines states that “[e]ach parent should have the choice of working additional hours through overtime or at a second job without increasing the child support award.” Okay, so that sounds simple enough right?
Except the same section also gives family courts discretion to consider those sources of income “if that income was historically earned from a regular schedule and is anticipated to continue into the future.” This means that overtime or income from a second job can be included to calculate child support if it is the “usual” schedule for that parent. Because this is totally discretionary and can impact child support significantly, it is an area where the skill of your family law attorney can make a big difference.
Self-employment probably complicates child support cases more than any other single factor. Self-employed parents may use what we will describe as relaxed accounting practices that can make it very difficult to accurately determine the parent’s income.
The guidelines instruct family courts to calculate gross income by subtracting ordinary and necessary businesses expenses, including one half of the self-employment tax, from gross revenues. It further allows courts to count as income any business expenses that “reduce personal living expenses.” Common examples of these expenses include automobile payments or leases, cellular phone or other utility payments, and meals.
Just like overtime and income from second jobs, this is another area where family courts must be convinced to adopt a figure somewhere between two usually very different accountings, so hiring an experienced family attorney can be a big advantage. Additionally, self-employed can require more complex discovery — the process of obtaining documentation from the other party — particularly if the self-employed parent keeps his or her own books. Sometimes it may even require retention of an accounting expert.
State Assistance or Public Benefits
Gross income does not include benefits received from means-tested public assistance programs such as Temporary Assistance to Needy Families (TANF), Supplemental Security Income (SSI), or Nutrition Assistance and General Assistance.
Unemployment or Underemployment
Whenever a parent is unemployed or underemployed (i.e. working below full earning capacity), the family court must consider the reasons. If it finds that the unemployment or underemployment is voluntary and not justified, the child support guidelines instruct the family court to attribute income to that parent up to his or her full earning capacity.
Earning capacity is usually determined based on consideration of the parent’s education, credentials, specialized training, and employment experience. Courts often use a parent’s historical income as a baseline for earning capacity.
Judges do have discretion not to attribute income to unemployed or underemployed parents. Circumstances that may make attribution inappropriate include, but are not limited to:
- A parent is physically or mentally disabled;
- A parent is engaged in reasonable career or occupational training that is expected to increase earning capacity;
- Unusual emotional or physical needs of a natural or adopted child require the parent to stay home and care for the child;
- The parent receives Temporary Assistance to Needy Families (TANF); or
- The parent is the primary caretaker of a young child and the cost of childcare is prohibitive
Income of a Parent’s Spouse
We are often asked by parents who wish to remarry if their new spouse’s income can be used to calculate child support. The short answer is no, though if the new spouse pays the parent’s living expenses, that could be considered, though this is far less common in situations where the expenses are shared with a spouse as opposed to say an unrelated roommate.
Parent’s Living Expenses
Another common misconception about child support is that it fails to consider a parent’s living expenses. While it is true that there are no inputs on the calculator for housing costs, utility bills, food, automobiles, etc, the “average” costs of living are built into the formula. Obviously this will not perfectly credit every parent for every variable expense, but the idea is that child support is a priority obligation.
Adjustments to Gross Income
The guidelines do allow several adjustments that may reduce (or sometimes increase) a parent’s gross income. For example, spousal maintenance or child support for other children that a parent pays may be deducted from his or her income. Spousal maintenance a parent receives may be added to his or her income.
Another adjustment may be made whenever either parent is the primary residential parent (the parent with whom children live the majority of the time) for children subject to another court order for child support. For children not subject to a child support order, the adjustment is discretionary.
Costs to Insure Children
Family courts must add the costs, if any, either parent incurs to provide medical, dental, and/or vision insurance coverage for the children subject to the child support order. Parents who provide insurance will be credited only with the portion of the premium attributable to the children. If the insurer does not itemize the cost to insure just the children, it may be determined by calculating the prorated share of the total premium. For example, imagine a parent pays $1,000 for a family plan that insures two adults and two children. If the insurer does not itemize the costs to insure the children alone, the cost to insure each child would be calculated by dividing the total premium by four (the number of individuals covered), so $250 per child or $500 total.
Uncovered or Unreimbursed Medical Expenses
When the court orders child support, it also must allocate the costs of any uncovered or unreimbursed medical expenses. Importantly, uncovered or unreimbursed medical expenses must be medically necessary as defined by Internal Revenue Service Publication 502.
Generally speaking, most courts assign each parent a share of the costs equal to their proportionate income. If parents earn approximately the same income, they each may be responsible for half of all uncovered or unreimbursed medical expenses. If one parent earns twice as much income as the other, he or she may be ordered to pay two thirds.
Courts can specify procedure for parents to request reimbursement from the other parent. If the decree does not include this instruction, the guidelines provide a default period that requires a parent to request reimbursement within 180 days from the date the expenses were incurred. The parent who receives a valid request for reimbursement then has 45 days to provide his or her share of the payment.
Childcare costs typically range from expensive to insane. Unfortunately for many parents, Arizona law does not necessarily require the other parent to contribute to the costs. It is up to your judge whether or not to include your childcare costs on the child support worksheet. While there really is not any black and white rule, many judges are more reluctant to include childcare costs as parenting time approaches equal. This is because at that point the parents are presumed to have approximately equal childcare needs. It also prevents the childcare “arms race” where parents deliberately incur greater costs to increase the other parent’s child support obligation. Yes, this is in fact a real thing.
Like childcare, family courts may include expenses necessary to attend private or special schools whenever these expenses are mutually agreed upon by both parents or ordered by the court. There is no precise definition of education expenses, but think more along the lines of tuition than school supplies.
Parenting Time and Child Support
It often surprises parents to learn that parenting time can impact child support more than income. By this we mean that as a parent exercises more parenting time, the parent provides more support directly to the child and may shift the burden for that support to the other parent. Conversely, a parent who exercises very little parenting time will be expected to pay a greater share of the total support costs through a monthly child support obligation.
Section 11(C) of the guidelines provides that blocks of parenting time less than 24 hours are counted as follows:
- 12 hours or more is counted as one day
- 6-11 hours is counted as half of a day
- 3-5 hours is counted as a quarter of a day
- Periods less than three hours may count as a quarter of a day if the parent provides a meal
This section of the guidelines is hyper-technical and courts usually do not conduct such a detailed accounting of parenting time. It may be necessary to do so, however, whenever a parent exercises frequent small blocks of parenting time to ensure that the parent is properly credited for that time.
Travel Expenses for Long-Distance Parenting Time
Though family courts can consider and allocate to each parent a portion of the travel costs associated with parenting time where the parents live more than 100 miles apart, this determination does not affect child support.
Upward or Downward Deviation
If the court finds that application of the child support guidelines would be inappropriate or unjust in a particular case, it may adjust the obligation consistent with the circumstances of the case and the children’s best interests. As you might imagine, this is incredibly subjective and varies from judge to judge. One reason it might be appropriate to deviate is if one of the parents earns significantly greater income than the other. Child support actions involving high net worth or celebrity clients often involve requests for upward deviation by the poorer spouse.
Third Party Caregivers
When children are placed with a third-party caregiver by court order or state agency placement, the third party may be entitled to receive child support from each parent. For those cases, the formula considers the caregiver’s expenses for the children but not his or her income.
Exchange of Information
Child support orders are supposed to require parents to exchange financial information, including tax returns, financial affidavits, and earning statements, every two years. The purpose of this is to enable the parents to determine whether the current child support order should be modified. Spoiler alert: almost nobody cooperates.
Modification of Child Support
Pursuant to Ariz. Rev. Stat. §§ 25-327 and 25-503, child support can be modified whenever there has been a substantial and continuing change in circumstances since the previous order was entered.
There are two procedures available to modify child support — the standard procedure and the simplified procedure.
As its name implies, the standard procedure follows the same procedure as any other family court petition. After one parent files and serves the petition, the other parent may file a response, and the court will set a hearing.
The simplified procedure is available whenever application of the current child support guidelines would result in at least a fifteen percent (15%) change to the current child support order or a parent needs to change the responsibility for providing health insurance for the children.
Another key difference is that after the simplified petition is filed and served, the court will not set a hearing unless the other parent disputes the modification. If there is no dispute, the court can enter orders to modify child support without a hearing.
Partial Termination of Child Support
If multiple children are subject to a child support order and one or more children emancipates, one of the parents — presumably the one obligated to provide support — must file a petition to modify. The order will not automatically be reduced by the emancipated child’s prorated share and it is not possible to modify child support retroactively so it is important to act fast whenever circumstances warrant modification.
Benefits Received for the Child
Certain benefits received by a parent on behalf of a child such as Social Security Disability or Insurance, are credited toward child support. If the benefit exceeds the child support obligation, it satisfies the obligation but any overage is not credited toward arrears or as additional support paid.
If the benefit is less than the child support obligation, the parent who owes support still must pay the difference. If these benefits are received by a parent and not on behalf of the child, the sums must be included in that parent’s gross income.
Dependent Tax Exemption
Another regular source of conflict between parents is the allocation of the federal tax exemption for dependent children or, more accurately while that benefit is suspended, the child tax credit.
Unless the parents agree otherwise, these exemptions are divided proportionate to their respective incomes, even if one parent exercises more parenting time than the other. For illustrative purposes, imagine that Parent A earns $60,000 and Parent B earns $40,000. Because Parent A’s income represents 60% or 3/5 of the parents’ combined income, Parent A would be able to claim 60% of the tax exemptions or child tax credits, even if the children primarily live with Parent B. This may be accomplished by creating a schedule where Parent A claims the exemptions in three out of every five years.
There is one important condition to the allocation of the tax credits. When a parent is obligated to provide monthly child support, he or she must have paid all support for that calendar year, including any payments toward arrears, in order to claim the tax credit.
To illustrate this, imagine Parent A is ordered to pay $400 per month in ongoing child support and additional $100 per month toward child support arrears. This would mean that Parent A must have paid to Parent B a total of $6,000 ($500 per month for twelve months) by December 31 to claim the tax credit for that calendar year. If less than $6,000 is paid, Parent B will be able to claim that exemption without resetting or otherwise affecting the tax credit schedule.
Child Support Arrears
The term “arrears” refers to delinquent and unpaid child support. If a parent owes child support arrears, courts are encouraged to order an additional monthly payment toward arrears in an amount that at least exceeds the interest accrual.
Similarly, whenever an ongoing child support obligation ends, the court should review the payment history to determine if any arrears exist before terminating support. If there are arrears, the court typically will order the obligated parent to continue making the same child support payment until all arrears are satisfied.
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