Lebanon — Modification of Indiana child support guidelines

On Jan. 1, 2010, the Indiana Child Support Guidelines were revised.

The following issues, among others, were revised.

Imputation of Income: Previously, courts often imputed income to an unemployed party. The guidelines now encourage courts to impute income only when the unemployment or underemployment is “without just cause.” For instance, some parents stay home because they cannot make enough income to make childcare costs reasonable. Previously, many courts would impute income to these parents for child support purpose. The guidelines now state that in order to impute income, the Court should consider whether the underemployment or unemployment is a result of a disability, health issue, excessive childcare costs or similar circumstances.

Raising child support plateau for high income earners: Previously the child support schedules maxed-out when a couple earned $208,000 per year. After the income level reached $208,000 per year, the guidelines applied a formula that had the effect of causing support amounts to plateau as incomes increased. Under the new guidelines, the schedules max-out when a couple has a combine annual adjusted income of $520,000 and the plateau causing formula has become a simpler linear calculation.

“Negative” child support number: Under the old guidelines, there was a question as to how to treat “negative” child support calculations for the non-custodial parent. Under the new guidelines the custodial parent may have to pay child support to a non-custodial parent if there is a “negative” support figure.

Modification of child support: Previously, modifications of support could be ordered no earlier than the date a Petition to Modify Child Support was filed with the court. Now, there are two exceptions to modification prior to the date of filing. One exception is if the parties have agreed to carry out an alternative method of payment that substantially complies with the prior order. The other exception is that the paying parent takes the child into his/her home and assumes custody, provides necessities, and exercises parental control for a period of time such that a permanent change of custody is exercised.

Definition of Controlled Expenses: The guidelines define “controlled expenses” as clothing, education, school books and supplies, ordinary uninsured healthcare and personal care. Controlled expenses are a concern where physical custody is shared equally. With more and more parents agreeing to share physical custody, it is important that controlled expenses be defined. Courts and attorneys are given guidance in equal time cases as to which parent should be responsible for paying the controlled expenses. The factors that should be considered include: (1) which parent initially paid those expenses; (2) which parent is more likely to be able to readily pay the controlled expenses; (3) which parent more frequently takes the child to the healthcare provider and (4) which parent has traditionally been involved in the child’s school activities.

Healthcare and medical support issues: A new worksheet to determine the feasibility of insurance coverage has been designed. Healthcare insurance coverage is mandated when it can be obtained at a “reasonable cost.” A four-part test is used to determine whether the court must include a private health insurance requirement: 1) Is private health insurance available to the parent? 2) Would the premium to cover the children be less than 5% of that parent’s Weekly Gross Income? 3) Would the premium to cover the children plus that parent’s share of the Basic Child Support Obligation be equal to or less than 50% of that parent’s Weekly Gross Income? 4) Would the coverage for the insurance be accessible for the children to enjoy (e.g., does it cover the geographic area at which the child lives)? If the parents agree that one or both of them will provide health insurance for the child, the analysis of reasonableness is not needed.

Extraordinary expenses: Extraordinary expenses such as private schooling, college and extracurricular activities now have their own guideline. Extraordinary expenses include camps, sports leagues and similar extraordinary expenses for the child. As every parent knows, these expenses can be expensive. The new guidelines instruct that “in the absence of an agreement relating to such expenses, assigning responsibility for the cost should take into account factors such as each parent’s ability to pay, which parent is encouraging the activity, whether the children have historically participated in the activity, and the reasons a parent encourages or opposes participation in the activity.” For instance, many child support paying parents want the children to be involved in sports or music programs and believe that the cost of those expenses should come from the support payments. Often the support payments do not even cover the cost of the child’s basic needs. Thus, there may not be funds available to pay for these extracurricular activities. Under the guidelines, the support paying parent can be ordered to pay these expenses.

Support “accountings” and the allocation of tax exemptions: Under the new guideline, the trial court may require a parent that is receiving child support payments to provide an accounting of how those funds are spent. This accounting may not be ordered for support payments previously paid. The accounting should be required only upon a showing of reasonable cause that child support is not being used for the support of the child. For instance, in one of my cases the custodial parent’s net worth increased dramatically in the last few years. There is proof that this parent has taken the child support payments paid for the benefit of the children and deposited them in their own bank and investment accounts. Under this circumstance the court could order the custodial parent to make an accounting for the use of the child support payments.

The child support guidelines have now clarified many questions that are often asked of me.

This article is not an exhaustive description of every revision to the guidelines. A complete copy of the Guidelines can be obtained at http://www.in.gov/judiciary/rules/child_support/.