Indiana Child Support Guidelines - High Earners Pay More, Low Earners Pay Less

Under the amended Indiana Child Support Guidelines, effective January 1, 2010, high earners may pay more, and low earners may pay less.

High Earners: Those that earn over $4000 a week will be affected. Under the previous guidelines those earning $4000 did not have a scheduled guideline amount, but instead a formula was applied. Now where income is at $4000-$10,000 weekly there is a scheduled guideline payment. The initial commentary of the amended Guidelines states as follows:

[the scheduled payments] at high incomes leveled off the child support schedule for combined weekly adjusted incomes above $4,000. In 2009 this exception was removed. The increase is now incorporated into the schedule up to combined weekly adjusted incomes of $10,000 and a formula is provided for incomes above that amount. Previously, a formula was provided for combined weekly adjusted incomes above $4,000.

One aspect of the guidelines that did not change is the ability to tax adjust the support payment from the guideline assumed income tax rate of 21.88%. The guidelines state as follows:

In devising the Indiana Guidelines, an average tax factor of 21.88 percent was used to adjust the support column. Of course, taxes vary for different individuals. This is the case whether a gross or net income approach is used. Under the Indiana Guideline, where taxes vary significantly from the assumed rate of 21.88 percent, a trial court may choose to deviate from the guideline amount where the variance is substantiated by evidence at the support hearing.

For high earners a tax adjustment should still be considered.

Low Earners: The changes to the guidelines are helpful to low earners. Instead of having a minimum support amount of $25.00 per week the lowest amount is set at $12.00 per week. Also, the Supreme Court states that there are some situations where a $0.00 support order is appropriate. While this may seem unfair the Supreme Court found, based on research, that the accumulation of excessive arrearages was not in the best interest of the children involved. Also, where a parent is incarcerated and can't earn income, an adjustment to the support amount may be needed, see case here.

Additionally, considering that 'negative support orders' are now presumed to be appropriate, it is not much of a stretch to have a $0.00 support order.

For more information on child support and the new guidelines see previous blog entries on 'child support'.

New Child Support Guidelines - Controlled Expenses

The Indiana Supreme Court has amended the Indiana Child Support Guidelines and ordered the changes effective January 1, 2010. The are many important changes. Too many for one blog posting.

One very positive change is that the guidelines are now clear as to who must pay for the 'controlled expenses' associated with raising a child, such as the winter coat and the basic school costs. Furthermore, the definition of 'controlled expenses' should help clear up disputes about who pays for school books and basic clothes. Parents will decide who pays for these costs by designating a 'primary physical custodian,' or if they share equal time with the child(ren), they will need to designate someone as the person who will pay the 'controlled expenses'.

The amended order defines 'controlled expenses' as follows:

Controlled Expenses. This type of expense for children is typically paid by the custodial parent and is not transferred or duplicated. Controlled expenses are items like clothing, education, school books and supplies, ordinary uninsured health care and personal care. For example, the custodial parent buys a winter coat for the child. The noncustodial parent will not buy another one. The custodial parent controls this type of expense. The controlled expenses account for 15% of the cost of raising the child. The parenting time credit is based on the more time the parents share, the more expenses are duplicated and transferred. The controlled expenses are not shared and remain with the parent that does not get the parenting time credit. Controlled expenses are generally not a consideration unless there is equal parenting time.

This definition was much needed. Undoubtedly there will still be disputes over the basic costs associated with raising the child(ren), but the Supreme Court helped the trial courts, attorneys and parents involved with this definition.

IMPORTANT NOTE: The new guidelines do not change the fact that the cost of having your attorney argue over who should pay for the winter coat, is likely more than the winter coat itself. Buy two.

Indiana Child Support - New Child Support Calculator

Previous postings (here, here, here and here) have detailed the amendments to the Indiana Child Support Guidelines, which will be effective January 1, 2010. On January 1, 2010 the Supreme Court of Indiana will update its online child support calculator to incorporate the amendments. The online calculator will be found here, and, as always, is free.