Basic Child Support
In New York, child support is a monetary payment tendered by one parent to the other for the care and maintenance of the parties’ child(ren). Care and maintenance of the child(ren) includes expenses such as food, clothing, shelter and other basic needs. Child care or day care, when required by the work schedule of the custodial parent, is another item of child support and is an additional support obligation on top of basic child support. Other items of need for financial support of the children include sports, music lessons, tutoring and/or summer camp, all of which are costs attributable to raising the child(ren) and may generally be considered separate from basic child support and are additional support (from basic child support) items.
In New York, child support is statutory in nature, meaning that there is a specific law entitled the “Child Support Standards Act (CSSA),” which establishes parameters by which a parent’s child support obligation is calculated.
In New York, a parent’s basic child support obligation is computed by totaling the adjusted gross income of both parents, less certain permissible deductions (i.e., social security tax; medicare tax; NYC income tax; maintenance/spousal support actually paid) and then taking a percentage of that sum. That percentage of the adjusted gross income utilized to determine the parties’ child support obligation is predicated upon the number of children requiring support. Those percentages are:
- One Child: 17% of the total parental income.
- Two Children: 25% of the total parental income.
- Three Children: 29% of the total parental income.
- Four Children: 31% of the total parental income.
- Five or More Children: no less than 35% of the total parental income.
The statute is mandatory when applied to combined adjusted gross income of $141,000. For Income over $141,000, it is discretionary but the parties or the court must set forth the basis for deviating from the statute percentage.
Although most often adhering to the statutory formula set forth above, New York’s divorce and family law courts do have discretion, as set forth above, to consider certain factors beyond strict application of income levels and, in rare instances, to deviate from the statute, if it finds the obligation yielded after application of the statute to be unjust or inappropriate. Such deviation may yield a greater or lesser amount of child support as provided by law.
An attempt by parents to provide for less child support than contemplated in the law may be subject to attack by the custodial parent seeking more support predicated on public policy considerations. Agreements that seek to prevent modification of child support awards, and which attempt to fix child support at one level for the duration of the child(ren)’s minority, may also be subject to attack predicated on public policy considerations.
“Public policy considerations” regarding child support simply means the following: that children are wards of the court and the courts will not be bound by agreements made by their parents if the agreement is to the detriment of the children; that children should be supported by their parents, not by third parties and not by the taxpayers.
The concept of child support consists of not only the direct payment of monies for the basic needs of the children, such as food, clothing, shelter and education, but also includes the obligation of both parents to provide medical insurance, pay for uncovered medical expenses, and other reasonable expenses.
The CSSA includes the obligation of the non-custodial parent to contribute to child care expense if the custodial parent incurs that expense as a result of working.
In addition to the foregoing, the CSSA provides for shared payment, by both parties, of certain “add on” expenses associated with the child(ren), including reasonable child care associated with a parent working or attending school, reasonable health care expenses uncovered by insurance and, in certain cases, educational expenses. Pursuant to the CSSA, such expenses are customarily allocated on a basis proportionate to the parties’ incomes.
Most parents want their children to go to college and such a goal is laudable. However, in the throws of a matrimonial dissolution, with the division of one family into two families, and the maintenance of two homes with its attendant costs, a college education may become difficult to afford.
Where the parents do wish to provide for the child(ren)’s college education, it is usually recommended that the agreement provide that the parties agree to share equally, or pro-rata to income, or in some other ratio, the cost of college, but in an amount that does not generally exceed state college costs for room, board and tuition.
Care should be given to define what is meant by “college education”, as disputes easily arise if the intent of the parties is not clear. For example, does college education mean tuition, room and board, only, or does it mean activities, travel expenses, and SAT costs as well? What about graduate school? These issues should be clarified so that there will be no misunderstanding or dispute between the parties.
People who divorce, and who have children who want to go to college, may benefit financially from the divorce with reference to college aid and grants. If the custodial parent is the mother and she earns less money than the father, the mother can apply for college aid predicated upon her income, and the child(ren) may be entitled to receive more aid and grants than if the family was intact.
College aid advisors and planners are professionals who specialize in counseling students to secure maximum aid and grants. You should seek the advice of a college aid planner to see if benefits may be available.
If the custodial parent should remarry, the remarriage does not alleviate the obligation of the non-custodial parent to pay child support or to pay for any of the add-ons. The non-custodial parent will be required to maintain his/her obligation notwithstanding the remarriage of the custodial parent.
Most of us have dealt with auto insurance, homeowners insurance, liability insurance, income protection insurance, vacation insurance, etc. Most insurance policies relate to protecting the individual from loss due to unexpected circumstances or legal claims, and each individual must be guided by his or her own needs.
However, several types of insurance may impact on the divorce or separation agreement. The types most frequently dealt with in a separation agreement are health insurance, life insurance and disability insurance.
Insurance is a way of protecting against possible future problems. While it is always a gamble when purchasing insurance, there are certain losses which can be so great that it is almost a necessity to protect against them.
With the rapidly growing cost of health care and the furor which has emerged regarding health insurance, almost no one is unaware of the need and expense of health insurance. Many people are protected under group health insurance policies supplied by an employer.
Children remain covered by the family health policy regardless of the divorce or marital status of their parents. This is not true for a spouse. When the marriage ends, (a judgment of divorce is signed), the spouse who is not the named insured on the health policy ceases to be a member of the family and is therefore no longer covered under the family policy provision. Some insurance policies may also specify that a legally separated spouse is not covered by the family policy.
Federal law dictates that all group health policies must have a COBRA provision. This means that for an additional premium, a divorced spouse must have the option to continue his or her coverage under the terms of the policy for a period of three years. Understand that while the continuance of coverage can be very important especially in a situation involving a pre-existing condition or where treatment is in progress, it may be quite expensive. It would be important for you to carefully ascertain the cost of continuing health insurance under the COBRA provision, and assuming the matrimonial is resolved by way of agreement and not trial, this cost must be factored into any agreement.
Further, you should understand the availability of Medicare or Medicaid in your jurisdiction.
Many groups and organizations offer group rates on health care insurance and these possibilities should also be explored.
Disability insurance protects against long-term or, in some cases, short-term, disability which prevents an individual from earning a living. As it relates to the divorce or separation agreement, disability insurance may be useful in protecting the income of the spouse responsible for paying child support or spousal maintenance. Since, in most instances, child support is dependent on the income of the spouse who is paying it, when income ceases as a result of illness or accident, the inability to pay support may leave the children in dire straits. One possible solution to this problem is for the payor spouse to purchase long-term disability insurance which would guarantee child support payments. The cost of this insurance may be paid by an employer or it may be paid by either spouse. The cost may also be shared by spouses depending on circumstances.
In the divorce or separation agreement, life insurance plays a similar role to that played by disability insurance. However, life insurance is much more frequently used and relied upon than is disability insurance. The primary purpose of life insurance is to guarantee the availability of funds for child support, educational costs and/or spousal maintenance in case of the death of the payor spouse. Life insurance usually pays a lump-sum death benefit. In calculating the amount needed, you must calculate the principal needed to generate the investment income that would be necessary over a period of time (such as for child support or maintenance payments).
In many cases, life insurance already exists when the divorce or separation agreement is being formulated. If so, it might be adequate to simply agree that insurance already in place should be kept in force for as long as needed. However, the beneficiary may have to be changed, or the ownership of the policy may have to be transferred. In addition, when the child(ren)’s welfare is being considered, you might consider setting up a trust with the proceeds of life insurance going into that trust naming the child(ren) as beneficiary. Life insurance can be used in many different ways and should be considered when there is a need.
The payment of child support is a non-taxable event. That is to say that the payor parent cannot deduct from his/her income for tax purposes the amount paid for support and the parent receiving the money cannot include that money as income.
The Internal Revenue laws provide that the custodial parent automatically has the right to claim the children as dependents.
In order for the non-custodial parent to claim one or more of the children as dependents, the parties’ agreement must give the non-custodial parent that right, and the custodial parent must sign an Internal Revenue form that is filed together with the non-custodial parent’s tax return wherein the custodial parent consents to the non-custodial parent claiming the children as dependents.
Modification of Support
As circumstances change, child support may also need to change. Circumstances change as a child grows older. A 12 year old or a 16 year old has different greater needs than does a two or three year old. In addition, parental incomes can change significantly, either up or down. This, too, may necessitate a modification of child support. Child support is subject to modification based on changed circumstances and legal requirements; it is not, however, an automatic entitlement.
For cases subject to the October 2010 law [any order issued or agreement entered into after the date the law went into effect], in addition to seeking modification based on a substantial change in circumstances, if the parties do not specifically opt-out of the modification provisions in a validly executed stipulation or agreement, then either party may seek modification of the child support award if either three (3) years have passed since entry of the last child support order or agreement or there has been a change in either party’s gross income by fifteen percent (15%) or more.
Subject to certain limited exceptions, such as an earlier emancipation of a child, a parent is obligated to pay child support until the child’s 21st birthday, at which time this obligation ceases (except in the event the parties agree to extend that obligation beyond the child’s 21st birthday).
The issue of emancipation is one that could be very clear (for example, that at the age of 21 a parent is no longer obligated to support a child), or, on the other hand, the age of emancipation could be a difficult issue. For example, where termination of support is at the age of 21, and a child is 18, not in school full time and working full time but is not able to support him/herself, an issue may arise as to whether or not a child between 18 and 21 is emancipated and should continue to receive support from the non-custodial parent, or whether that child should be working full-time and be self-supporting.
This issue is not easily resolvable, and the facts and circumstances of each case must be considered, such as:
- If the termination of support occurs at 21, but the child not in college full-time, is he/she capable of being self-supporting?
- Can a child in this category secure a job and earn enough to support him or herself?
- Will supplemental support from the non-custodial parent be needed?
- Is the child not seeking a job and not because the child does not want to or because the child cannot reasonably secure a position?
These and other questions may arise concerning the issue of whether or not a child is emancipated prior to the age beyond which a parent is no longer obligated to support the child. If a parent believes that a child is emancipated and that the parent should not be contributing money towards the support of that child, a proceeding may be commenced wherein a hearing will be held in order to ascertain whether the child is emancipated.
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