Source: http://seidenfamilylaw.com/articles/61-demystifying-child-support-not-all-child-support-cases-are-alike
Timestamp: 2019-04-22 14:57:20+00:00

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Appendix IX of the Rules of Court contains the Child Support Guidelines (the “Guidelines”). Rule 5:6A provides that there is rebuttable presumption that the Guidelines apply in cases where the parents have combined annual gross income of $250,000 or less. A rebuttable presumption means that the Guidelines shall be applied in all contested and uncontested Child Support cases unless a party proves good cause for the Guidelines to be modified or disregarded.
Increase cost of each child has a less than proportional increase—spending for two children is double the spending for one child.
In order to further understand the Guidelines, a review of what is and what is not included in the Guidelines is important. One parent often believes that the Child Support should cover all expenses (the “payor”) for the children whereas the other spouse (the “payee”) believes that the Child Support is not enough to cover many of the child’s expenses. This article addresses this dispute.
The Guidelines are intended to include the average amount of money that intact families spend on children for their housing, food, clothing, transportation, entertainment, unreimbursed health care up to $250 per year per child, and some miscellaneous items.
Child Support is based on three different types of expenses for a child: fixed costs, variable costs, and controlled costs. Fixed costs are those that are incurred regardless of whether the child is living with that parent, such as household expenses. Variable costs are incurred only when the child is with the parent, such as transportation and food. These expenses follow the child. Controlled costs are incurred by the primary caretaker and are in that parent’s sole control, such as clothing, personal care, entrainment, and miscellaneous expenses. Fixed expenses make up 38% of the Child Support award, Variable costs make up 37% of the Child Support award and controlled expenses make up 25% of the Child Support award.
The fact that a family might not spend money on one of these categories is not necessarily grounds to deviate from the Guidelines. However, if a family’s spending on these categories of expenses differs from the average spending of an intact family, then that would be grounds to deviate.
Housing: Housing expenses for the child are intended to be included in the Child Support award.
Food: General food for the child, food consumed both home and away, is included in the Child Support award. Even vending machine item purchases are included.
Clothing: All of the children’s clothing and footwear (except special footwear for sports) are included in the Child Support award. Diapers, alterations to clothing, dry cleaning, laundry, jewelry, and watches are also included in the Child Support award.
Transportation: Costs associated with owning or leasing an automobile are included in the Child Support award. Costs of public transportation, parking fees, license, tolls, and automobile clubs and registration fees are also included. This category does not include the costs associated with a motor vehicle purchase or lease for the child that is of driving age.
Unreimbursed Medical Expenses: Unreimbursed medical and dental expenses up to $250 per year per child are included in the Child Support award. The increased cost of adding a child to a health insurance policy is not included in the Child Support award.
Entertainment: Fees, memberships and admission to sports recreational or social events, lessons or instructions, movie rentals, televisions, mobile devices, sounds equipment, pets, hobbies, and toys are included in the Child Support award. Playground equipment, photographic equipment, video games, and recreational, exercise or sports equipment are all included in the Child Support award.
Miscellaneous Items: Personal care products and services; books and magazines; school supplies; cash contributions; personal insurance and finance charges are included in the Child Support award.
Child Care Expenses: While the average cost of child care, including day camp in lieu of child care, is included in the Child Support award, work related child care should be added to the basic obligation, if appropriate.
Health Insurance for Child: The increased premium attributed to the Child’s portion of health insurance is not included in the Child Support award and should be added to the basic obligation, if appropriate.
Predictable and Recurring Unreimbursed Health Care: Unreimbursed medical and dental expenses over $250 per year per child are not included in the Child Support award. If there are predictable or recurring unreimbursed health care expenses, for a child, these expenses can be added to the obligation. The Guidelines specifically dictate the excess unreimbursed medical expenses (beyond the first $250 per year per child) should be shared by the parties in proportion to their incomes.
While the Guidelines create a rebuttable presumption to determine a Child Support award, the Guidelines can be disregarded or adjusted upon good cause shown, a standard that is within the discretion of the Court. In circumstances where the parties or the Court choose to deviate from the Guidelines, Appendix IX-A(3) requires that the amount of Child Support based on the Guidelines should be specified in writing and the basis for the deviation must be noted.
Other Dependents: The Guidelines presume that all of the children of a parent should be entitled to share in that parent’s income. For that reason, when a parent has another child born or adopted, regardless of birth order, that parent’s income will be allocated to all of his/her children. Interestingly, stepchildren are not considered children of the parent unless the Court has found that the parent has a legal responsibility for the stepchildren. When utilizing this mechanism, the income of the other parent of the dependent child shall be considered in the analysis and if the other parent is under or unemployed, income can be imputed to that other parent. This adjustment is available to both the custodial and non-custodial parent.
Work Related Child Care: Reasonable work related child care for a child under the age 15 or who is physically or mentally handicapped is includable. It is also only the net amount of the child care costs that should be included in the Guidelines as the Guidelines provide that the parent paying for the expense shall claim the deduction for same and the federal tax credit should be shared by both parties.
Health Insurance Premiums: The cost of providing medical insurance for the child can be added to the Guidelines. It is only the portion of the insurance premiums attributable to the child’s portion of the insurance that can be included. In order to determine this figure, a party should provide proof of the cost of the insurance premiums less the cost that he/she would pay for insurance premium without the child’s portion of the coverage (individual coverage vs individual plus child). The difference between these figures is the amount to be included in the Guidelines.
Predictable and Recurring Unreimbursed Medical Expenses: This expense should exclude the first $250 per year per child for unreimbursed medical expenses, as this is included in the basic Child Support obligation. If the unreimbursed medical expense is not predictable and recurring, then it should not be included in the Guidelines but rather should be shared by the parties in proportion to their respective incomes after the custodial parent pays the first $250 per year per child of unreimbursed medical expenses.
Predictable and Recurring Extraordinary Expenses: These types of expenses include costs for special diet for a child, private education costs for gifted and handicap children, and transportation expenses. If these expenses exist but are not predictable and recurring, then they shall be shared by the parties in proportion to their respective incomes.
Derivative Government Benefits: If the child received government benefits, then they can be included in the Guideline calculation provided that they are based on the contribution of the non-custodial parent or without regard to the family income (such as SSD, Black Lung, Social Security Retirement, Veteran’s Administrative benefits). Means tested benefits received for a child (such as TANF, DEFRA, SNAP, SSI) are excluded from inclusion in the Guideline calculations. Other benefits received for child that are not means tested or contributory in nature, such as social security benefits based on step parent or grandparent are to be included in the Guideline calculation.
Maintaining a Self-Support Reserve: If the non-custodial parent’s net income after deducting Child Support award is less than the self-support award, the Child Support award should be adjusted. However, there shall be no adjustment if the custodial parent’s net income, less the custodial parent’s Child Support obligation, is less than the self-support reserve. The self-support reserve is calculated by first subtracting the Child Support from the parent’s net income, and if that figure results in 105% of the U.S. poverty Guidelines for one person, then the Child Support amount is reserved. If that figure is less than 105% of the U.S. poverty guideline for one person, then the Child Support award is the difference between the obligatory parent’s net income and the 105% of the U.S. poverty guideline for one person. In determining the parent’s net income, the Court may impute income to a underemployed or unemployed party.
Prior to a hearing to establish or modify Child Support, the parties shall submit either a Case Information Statement or a financial statement in summary actions. R. 5:5-3. Net income is used to determine Child Support. Net income is defined as gross income minus income taxes, mandatory union dues, mandatory retirement, contribution previously ordered Child Support orders, and, if appropriate, theoretical Child Support obligations for other dependents. Prior to June 30th, the prior years’ income shall be considered. After June 30th, the support should be based on the year to date income. The Guidelines note that for higher earring individuals, FICA will decrease that party’s net income in the earlier part of the year and using only the net income from the first half of the year may not accurately reflect that party’s annual net income. In such case, the Guidelines provide that the FICA taxes should be amortized over the entire yearly period and not just the months when FICA is deducted.
Government housing subsidies (such as military housing or allowance).
If a parent is voluntarily underemployed or unemployed, income shall be imputed to that parent based on his/her work history, occupational qualifications, educational background, and prevailing job opportunity. The Court can impute income to a parent based on average earnings for that parent’s occupation as report by the New Jersey Department of Labor. At a minimum, income can be imputed based on 40 hours at the prevailing New Jersey minimum wage.
Determining what income to use when a parent is self-employed is more difficult than when the parent is a W-2 employee. The Guidelines provide that gross income from one’s business shall include gross receipts less ordinary and necessary expenses for self-employment or business operation. Personal income from the operation of a business includes all of the categories listed above and potential cash flow resulting from loans taken from the business. These expenses cannot include accelerated components of depreciation expenses, first year bonus, depreciation on appreciating real estate, investment tax credit, and deductions for home offices, entertainment, travel in excess of government rates, non-automobile travel that exceeds standard rates, automobile expenses, voluntary contributions to pension plans in excess of 7% of gross income, and any other business expenses that the Court finds to be inappropriate for determining income for Child Support purposes.
The Guidelines further provide that if a party’s income is sporadic, such as seasonal, bonuses, commissions, and/or royalties, the sporadic income shall be averaged over the prior 36 month period to determine an average figure of that party’s income. If, however, a party can demonstrate that the sporadic income will not be available in the future in an equivalent amount, then it can be excluded from a party’s income. Similarly, overtime received in the prior twelve months shall also be included in a party’s income.
Federal earning income tax credits.
In addition, contributions to retirement or pension plans that are mandatory shall not be considered income for purposes of determining that contributing party’s Child Support obligations. Similarly, a party’s mandatory union dues shall not be included in that party’s net income.
The Guidelines consider the amount of time a parent spends with a child in determining the Child Support amount. If a parent who spends less than two overnights a week with a child (e.g., if less than 104 overnights a year), then the Sole Child Support Worksheet should be used. When the overnights for the non-custodial parent are 104 per year or more, then the Shared Custodial Worksheet should be used. An overnight is defined as the majority of a 24 hour day, more than 12 hours. Vacation or holiday parenting time is not considered part of the overnight calculation. Notwithstanding the foregoing, if a child is in the care of the non-custodial parent for five or more consecutive overnights and the non-custodial is paying Child Support, that parent may request an abatement of the Child Support for that extended parenting time period. Conversely, if that non-custodial parent does not exercise the parenting time designated to him/her in the Guideline calculation, then the custodial parent may seek an adjustment to Guidelines. The Court has discretion to determine the effective date of any modification, leaving the option to make such recalculation retroactive. If the Court finds that a parent willfully failed to comply with a parenting time provision or entered such provision merely to reduce his/her support obligations, the Court may award counsel fees to the custodial parent in addition to adjusting the support.
In a true shared parental custody arrangement, presumably, both parents incur expenses for the child when the child is his/her custody. In a shared custodial arrangement, both parents incur fixed and variable expenses for the child when the child resides in his/her individual households. In order to arrive at a fair support award in these cases, the Guidelines need to be adjusted in order to account for the fact that both parents incur fixed and variable expenses for the child.
In 2009, in the case of Wunsch-Deffler v. Deffler, 406 N.J. Super. 505 (Sup. Ct. of N.J., Burlington Co., 2009), the Court set forth a formula to address allocation of support in a shared custodial arrangement. In Wunsch-Deffler, the Court acknowledged that in a true shared custodial arrangement, both parties have controlled expenses for the child and the Court held that these expenses should be apportioned between the parties based on their proportional share of their combined income and not based on the time sharing for the child.
The Court developed a three step formula to determine Child Support in these cases. The first step is to multiply the Basic Child Support amount determined in Line 9 of the Child Support Guidelines – shared parenting worksheet by the payor’s income proportionate share. Second, the figure should be multiplied by 25% which represents the controlled expenses assumed by the Guidelines. Third, the product of this calculation is then subtracted from the paying parent’s Adjusted Basic Child Support Amount as reflected on line 15 of the Worksheet. This calculation will take into consideration both parties’ need to pay control expenses for the child during their equal shared parenting time.
This concept was also addressed by the Appellate Division in Benisch v. Benisch, 347 N.J. Super. 393 (App. Div. 2002) as the Court acknowledged that in a shared custodial arrangement, the parent designated as the non-custodial parent will be paying the controlled expenses for the child twice, once when he/she pays Child Support and again when he/she pays for these expenses for the child.
In a case where the parties split custody of more than one child, a separate Child Support calculation should be computed for each child and then these Child Support awards shall be adjusted against one another to determine which parent pays Child Support and the amount of same.
Another more practicable approach to Child Support in a true shared parenting case is for the parties to have a joint Child Support account that they contribute to monthly. The parties need to establish a very specific list of what items will be paid from this account. Usually this list is limited to Schedule B expenses pertaining to the driving child (such as car insurance, automobile insurance, car purchase or lease, gasoline and maintenance for driving child’s car) and certain Schedule C expenses for the child such as prescription drugs, increased premiums for the children’s health insurance premiums (total premiums for spouse plus children less total premiums for spouse), unreimbursed medical and dental expense, clothing, shoes, jackets and formal attire, tutoring, driving lessons, gasoline for children’s cars, car maintenance, EZPASS for children’s tolls, graduation expenses, school pictures, prom costs, costs to visit colleges (provided they are reasonable and approved by parties prior to incurring same), college application fees, precollege testing, college dorm set up fees, books and supplies for high school and college, sorority dues, PTO fees and other school costs, cosmetics, toiletries and other beauty supplies, any other expenses agreed to by the parties, increased cost of car insurance for children, and agreed upon parties for Children.
In cases where Child Support Guidelines are not applicable, the factors detailed in N.J.S.A. 2A:34-23 or N.J.S.A. 9:17-53 must be considered when establishing the Child Support award. While these factors are often reviewed in high income cases, they can also be utilized to establish Child Support in a case where there is a basis to disregard or deviate from the Guidelines.
In the 2003 decision of Caplan v. Caplan, 364 N.J. Super. 68 (App. Div. 2003), the Appellate Division, addressed how to determine Child Support in cases where the parties’ combined net incomes exceed that of the Child Support guidelines. The fundamental question in these cases is what are the reasonable needs of the children. This question must be addressed in light of the standard of living of the parties. This analysis must balance the interests of reflecting a child’s entitlement to share in a parent’s good fortune while not depriving the parent of the right to participate in the development of an appropriate value system for his/her child. These standards will differ between the parties. In assessing the needs of the child, the Court must examine the best interest of the child.
The Court examined each category of expenses to determine what is and what is not appropriate to attribute to the children. The Appellate Division held that transportation expenses are reasonable expenses that can be attributed to a child. Similarly, a portion of a parent’s shelter expenses (Schedule A expenses from CIS) will also need to be attributed to the children. The challenge is determining which portion of these expenses are attributable to the parent versus the child. With regard to shelter expenses, the determination can center on what a parent would pay if she/he did not have to provide shelter for the children versus his/her current shelter expenses. With regard to Schedule C expenses, there are specific expenses that can be attributed to children, such as lessons, summer camp, club dues, sports, and personal hygiene and clothing costs whereas other expenses will need to be allocated between the parent and the children, such as food, restaurants, dry cleaning, sundries, and vacations. Once the reasonable needs of the children are determined, the next step is to allocate these needs between both parents based on their proportional share of their net earned and unearned incomes, which can include imputation of income and other income as detailed in this article. The Court will then analyze the factors of N.J.S.A. 2A:34-23(a) as detailed above to determine each parents responsibility for satisfying the expenses of the children.
When the parties are unable to agree upon a Child Support award in high net income cases, one means of resolving this dispute is to have a portion of the high income earning parent’s income contributed to a 529 Plan for the child that will be used to fund both parties’ obligations to pay for college expenses of the child. This settlement tool term will enable the payor spouse to know that the additional support will indeed be used for the child is benefit whereas the payee spouse will be assured that there will be funds available for the child’s college costs in the future.
In 2002, the Appellate Division provided guidance on how to address a modification of Child Support case in high income cases in the well-known case of Isaacson v. Isaacson, 348 N.J. Super. 560 (App. Div. 2002). In Isaacson, the Court held that Child Support in high income cases should be based on the reasonable needs of the children which must be addressed based on the standard of living of the parties. In this case, the payee spouse filed a post judgment motion seeking to modify Child Support based on a change in circumstance as a result of the children’s maturation, termination of her alimony which was to occur shortly, and based on ex-husband’s gross income nearly tripled from time of divorce from $180,000 to nearly $600,000. The former wife was seeking to have the monthly Child Support triple consistent with the tripling of ex-husband’s income. The Court held that the Child Support was to be based on the needs of the children and not proportionally increased based on percentage by which payor spouse’s income increased. The Appellate Division specifically noted that the children are entitled to share in the success of their parents as they stated: “[c]hildren are entitled to not only bare necessities, but a supporting parent has the obligation to share with his children the benefit of his financial achievement.” Id. at 580.
In determining the reasonable needs of the children in light of the good fortune of a parent(s), the Court suggests that the children’s expenses be broken into expenses being incurred based on his/her income and the added projected expenses which would enable the child to share in the good fortunes of the high income parent. This may include private school tuition, private tutoring, summer camps, music or art lessons, sports, clinics, vacation(s), study abroad, transportation expenses for a child that drives, large budgets for teenage clothing spending, and incidentals. The Court cautioned that even if one parent is earning significant income, the supporting parent has a right to participate in the upbringing of the children and limit expenses to the reasonable needs of the children. Also, the Court stated that it would not be offended if there is some incidental benefit to the payee spouse from the increased Child Support. For example, where the payor spouse has significant income, the children should not live in a house in disrepair. By providing support for the house to be repaired and maintained, this will inevitably result in the payee spouse also benefiting from this additional Child Support as he/she, as the mother or father, will also be residing in a repaired and maintained home.
Although the Child Support will increase when the payor spouse is earning significantly more income, the Child Support is not intended to increase at the same rate as an increase in a parent’s income. Issacson at 590. (trial court’s decision was upheld when it increased in Child Support from $2,400 per month to $3,500 per month based on payor spouse’s increased from $180,000 at the time of the parties’ divorce to nearly $600,000, plus payment by payor spouse of private school, future educational expenses, medical expenses, camp and expenses associated with vacation and visitation).
When filing a post judgment application to modify Child Support, the moving party has the burden to prove that there has been a change in circumstance warranting relief. If this burden is met, then the Court has the right to order full discovery regarding the financial circumstances of the other spouse. A plenary hearing is only necessary if there is a genuine dispute as to a material fact. Issacson at 578. In Issacson, the payee spouse claimed three change of circumstances, maturity of the children, termination alimony in near future, and a substantial increase in payor spouse’s income, the latter of which was agreed to be change in circumstances by payor. The payor was required to provide certain discovery. Once this burden was met, the details of discovery were within the discretion of the Court. The Court then held that the needs of the children must be the centerpiece of the analysis for the increased Child Support, and not the proportional increase of the payor’s gross income. However, even if a payor represented that he/she has the ability to pay, he/she should file a Case Information Statement to provide a basis for determining the Child Support. Id. at 586 (Appellate Division held that court erred in not requiring payor spouse to file a Case Information Statement despite his acknowledgement of an ability to pay but Appellate Division did affirm court’s ruling on limited discovery to payor spouse’s corporate and personal income tax returns for prior two years). Discovery in these matters is a balance between having enough information to understand the financial position of the parties without using discovery as a weapon to uncover the net worth of the high earner.
When addressing Child Support issues, it is important to remember that Child Support is the right of the child. If parents agree to forego Child Support in consideration for an equitable distribution or alimony issue, the payor spouse may be exposed to litigation initiated by the child to obtain the Child Support that he/she is entitled to receive. Martinetti v. Hickman, 261 N.J. Super. 508 (App. Div. 1993). Not only does this mean that the non-custodial parent has an obligation to pay support for the child but it also means that the custodial parent is obligated to expend the Child Support for the child. J.B. v. W.B., 215 N.J. 305 (2013). A child has the right to intervene in his/her parents’ divorce proceeding or dissolution action if his/her interests are not being adequately protected, even when the parents are in agreement that the support obligation should end. Johnson v. Bradbury, 233 N.J. Super. 129 (App. Div. 1989).
The purpose of Child Support is to benefit children, not to protect or support either parent. Our courts have repeatedly recognized that the right to Child Support belongs to the child, not the custodial parent," J.S. v. L.S., 389 N.J. Super. 200 (App. Div. 2006), certif. denied, 192 N.J. 295, (2007), and "may not be waived by a custodial parent," Gotlib v. Gotlib, 399 N.J. Super. 295 (App. Div. 2008) (quoting L.V. v. R.S., 347 N.J. Super. 33 (App. Div. 2002)). As such, "the parental duty to support a child may not be waived or terminated by a property settlement agreement." Patetta v. Patetta, 358 N.J. Super. 90 (App. Div. 2003) (a child who is living at home and dependent on his parents for his basic needs and proper support while attending college on a full-time basis was not emancipated and was entitled to receipt of continued support from his father.); Martinetti v. Hickman, 261 N.J. Super. 508 (App. Div. 1993) (finding right to Child Support was not barred by a property settlement agreement providing for the termination of support when the child turned eighteen).
We are all familiar with the cases where a child who is no longer a minor sues his/her parents requesting support for his/her college education. In such a case, even where the parents agree that the child should no longer receive support from them, the parents can be liable to the child for support.
In order avoid jurisdictional conflicts, all states in the United States have adopted the Uniform Interstate Family Support Act (“UIFSA”) 42 U.S.C. S666(f). In New Jersey, this statute is codified at N.J.S.A. 2A:4-30.124 through N.J.S.A. 2A:4-30.201. UIFSA addresses modification and enforcement of Child Support orders when at least one parent lives outside the State. UIFSA restricts a New Jersey court from entering or modifying a Child Support order where a valid Child Support order has been issued by another state. Moreover, if no Child Support order exists, UIFSA provides a means for establishing long-arm jurisdiction over non-resident parties in order to ensure that Child Support can be established by the court. The purpose of UIFSA is to ensure that only one order of Child Support exists at a time and to provide a means for modifying, establishing, and enforcing Child Support orders.
Only one state can govern a Child Support order at a time. A Child Support order entered by one state can be enforced or modified by that state provided that the obligor, oblige, or the child continue to reside in that state. If neither party nor the child reside in New Jersey, then absent consent, the Child Support order cannot be entered by the state of New Jersey.
Pursuant to UIFSA, if there is more than one Child Support order entered, the order issued by the child’s current home state (where child has lived for previous six months) shall have priority. If neither order was issued by the child’s home state, then the state that most recently entered the order will be given priority. The attempt to obtain jurisdiction in more than one state can become an issue when a parent is seeking a contribution toward college from the other parent as many states are not as liberal as New Jersey in granting college contribution. UIFSA provides protection against such venue shopping.
It has long been recognized that both financial and emotional support are essential to the well-being of a child. Both parents have the obligation to contribute to the expenses for the child. Determining the amount of Child Support to be paid will be guided by the Child Support Guidelines provided that the parties’ combined gross income is less than $250,000, and thereafter based on the needs of the child. Unlike alimony, Child Support is not capped at the marital lifestyle during the parties’ marriage as a child is entitled to benefit from the increased earnings of the parents. This entitlement, however, does not rise to the level of ensuring that the Child Support is proportionally increased based on the proportional increase of a parent’s income. But, as a parent earns more money, the child should enjoy the fruits of these earnings in some capacity. Just as raising children can be challenging, navigating the law on Child Support can also be challenging.
 Practitioners dealing with high income families sometimes refer to the “Three Pony Rule.” “That is, no child, no matter how wealthy the parents, needs to be provided more than three ponies." In re Patterson, 22 Kan. App. 2d 522, 920 P.2d. 450, 455 (Kan. App. 1996).

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