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Child Support - The Income shares model

The Income Shares Model

      [1] Calculation of Support Under the Income Shares Model

The foundation of the income shares model46  is the tenet that a child should receive the same proportion of parental income that would have been received by the child if the parents had not divorced.

The Income Shares model is based on the concept that the child should receive the same proportion of parental income that he or she would have received if the parents lived together. In an intact household, the income of both parents is generally pooled and spent for the benefit of all household members, including any children.47 

Thus, the income shares model calculates support as the share of each parent's income estimated to have been allocated to the child if the parents and child were living in an intact household.48  This principle is consistent with the Uniform Marriage and Divorce Act, enacted in many states.49 

Using the Income Shares model, computation of child support is basically a four-step process:

1. The income of the parents (gross or net) is determined and added together.
2. A "basic child support obligation" is computed based on the combined income of the parents, using a table or grid in the guidelines.50  The amounts in the table are derived from economic data on household expenditures on children.51 
3. A "presumptive child support obligation" is then computed by adding expenditures for work-related child care expenses and extraordinary medical expenses to the basic child support obligation. Other add-ons and deductions may also be calculated.52 
4. The presumptive child support obligation is prorated between each parent based on his or her proportionate share of total income. The obligor's obligation is payable as child support, while the obligee's obligation is retained and presumed to be spent directly on the child.

For example, suppose child support must be determined for one child whose custodial parent has a gross income of $1,000 per month and whose noncustodial parent has a gross income of $2,000 per month. Child care expenses are $50 per month, and extraordinary medical expenses are $15 per month. (For ease in calculation, assume that health insurance is paid by the father's employer, and there are no pre-existing support orders for child support or alimony.)

Using the Alabama child support guideline,53  the calculation of child support would be as follows:

(1) First, add the two parents' incomes to reach a combined income of $3,000.
(2) Second, using the specified formula provided in the statute, determine the basic child support obligation for combined income of $3,000. In this case, it is $437.
(3) Third, add to the $437 per month the $50 per month for child care; the total child support obligation is $487.
(4) Finally, prorate the obligation between the mother and father based on their respective shares of total income. The father's presumptive child support obligation is thus 66.6% x $487, or $324.66. An additional award for extraordinary medical expenses may be made in the discretion of the court as a deviation factor.

Using the Colorado child support guideline,54  the calculation of child support would be as follows:

(1) First, add the two parents' incomes to reach a combined income of $3,000.
(2) Second, using the chart provided in the statute, determine the basic child support obligation. In this case, it is $434.
(3) Third, add to the $434 per month the $50 per month for child care, and the $15 per month for extraordinary medical expenses; the total child support obligation is $499.
(4) Finally, prorate the obligation between the mother and father based on their respective shares of total income. The father's presumptive child support obligation is thus 66.6% x $499, or $332.66.

Using the Virginia child support guideline,55  the calculation of child support would be as follows:

(1) First, add the two parents' incomes to reach a combined income of $3,000.
(2) Second, using the chart provided in the statute, determine the basic child support obligation. In this case, it is $445.
(3) Third, add to the $445 per month the $50 per month for child care, and the $15 per month for extraordinary medical expenses; the total child support obligation is $510.
(4) finally, prorate the obligation between the mother and father based on their respective shares of total income. The father's presumptive child support obligation is thus 66.6% x $510, or $339.99.

      [2] Strengths and Weaknesses of the Income Shares Model

The main distinguishing feature of the income shares model is that it embodies the underlying economic assumption that as income increases, the proportion of income spent on child support decreases.

For example, one study found that in an intact family, the percentage of net income spent on children by income level and by number of children decreased as demonstrated in the following Table.

Critics have charged that the income shares model is based on faulty underlying economic research. One study has suggested that the underlying economic data failed to reflect true child-related expenditures in upper income families including such non-consumer expenditures as principal on home, savings, and trusts for the benefit of children. Thus, the income shares model does not accomplish the goal of ensuring that parents, after they break up, continue to spend on their children the same percentage of income that they would have spent if they were together.56 

Another distinguishing feature of the income shares model is that it illustrates graphically that both parents are sharing in the support of the child.57  Where the perception of fairness is as important as fairness itself, this feature is its greatest asset.

A final distinguishing feature of the income shares model is that it can more easily than the flat percentage model take into consideration adjustments for shared and split custody, health care needs, child care expenses, serial family development, and children's ages by the manipulation of income, add-ons and deductions and by then allocating these costs between the parents. Because these factors can be built into the income shares formula, there is less reason for deviation from the guideline's presumptive award. Limiting deviation meets the ideal of perceived fairness, as well as the federal requirement that the number of cases in which deviation is granted be limited. Limited deviation also meets the goals of consistency and predictability. Given that the ultimate goal of child support guidelines is increased compliance through perceived fairness, the income shares model meets this goal.

      [i] Tables 1-4 and 1-5: Percentage of Income Devoted to Child Support

TABLE 1-4
PERCENTAGE OF INCOME DEVOTED TO SUPPORT OF CHILDREN IN INTACT FAMILIES58 
Income Level 0-
$10,650
$10,651-
$12,150
$12,151-
$21,700
$21,701-
$28,200
$28,201-
$39,975
$39,796-
$51,875
Over
$51,875
No.  
1 26.0% 25.6% 24.7% 23.7% 22.9% 21.8% 19.2%
2 40.4% 39.8% 38.3% 36.8% 35.5% 33.9% 29.7%
3 50.6% 49.8% 47.9% 46.1% 44.4% 42.4% 37.2%

Under the income shares model, child support as a percentage of net income is as follows:59 

TABLE 1-5
PERCENTAGE OF INCOME DEVOTED TO SUPPORT UNDER INCOME SHARES MODEL
Income Level 0-
$5,000
$5,601-
$10,650
$10,651-
$16,725
$16,726-
$28,200
$28,201-
$39,975
$39,796-
$51,875
Over
$51,875
No.  
1 23.8% 23.7% 23.3% 21.6% 21.0% 20.1% 17.8%
2 37.0% 36.7% 36.1% 33.5% 32.7% 31.2% 27.7%
3 46.3% 46.0% 45.2% 42.0% 40.9% 39.0% 34.7%
4 52.2% 51.8% 51.0% 47.3% 46.1% 44.0% 39.1%
5 57.0% 56.5% 55.6% 51.6% 50.3% 48.0% 42.6%
6 60.9% 60.4% 59.5% 55.2% 53.8% 51.3% 45.6%

 


Footnotes

46  The income shares model was developed by the Institute for Court Management of the National Center for State Courts under the Child Support Guidelines Project of the Office of Child Support Enforcement of the United States Department of Health and Human Services.

The Final Report is embodied in R. Williams, Development of Guidelines for Child Support Orders: Advisory Panel Recommendations and Final Report (U.S. Dep't of Health and Human Services, Office of Child Support Enforcement, 1987), and summarized in R. Williams, Guidelines for Setting Level of Child Support Orders, 21 Fam. L. Q. 281 (1987). (back)

47  R. Williams, Development of Guidelines for Child Support Orders: Advisory Panel Recommendations and Final Report, at II-67 (U.S. Dep't of Health and Human Services, Office of Child Support Enforcement, 1987). (back)

48  Estimates of the share the child would have received as embodied in the support guidelines are based on economic evidence. This economic evidence is discussed in § 4.02. (back)

49  Uniform Marriage and Divorce Act § 309, 9A U.L.A. 400 (1987), requires that child support be based in part on the financial resources of both parents and in part on the standard of living the child would have enjoyed had the marriage not been dissolved. (back)

50 Appendix B provides a summary of each state's guidelines, and Appendix C provides each state's worksheets. A complete copy of a state's child support guidelines, including tables and grids, can be found at the citation noted in Table 1.03[a]-1. If the child support guideline is not in a statute, it may be obtained from the state's child support enforcement agency. See Appendix D.

It was simply not possible to provide each state's grids in this work, as most states' grids ran 20 pages, and some ran more. Indeed, the National Center for State Courts put out a two-volume set of just the states' guidelines and worksheets, and this set ran thousands of pages. (back)

51  See § 4.02 concerning economic data. (back)

52  See Chapter 3 for mandatory add-ons and deductions. (back)

53  Ala. R. Jud. Admin. 32. (back)

54  Colo. Stat. Ann. § 14-10-115. (back)

55  Va. Code Ann. § 20-108.2. (back)

56  See N. Polikoff, "Looking for Policy Choices Within an Economic Methodology: A Critique of the Income Shares Model," Essentials of Child Support Guidelines Development: Economic Issues and Policy Considerations (Women's Legal Defense Fund, 1987); see also M. Takas, Improving the Income Shares Guideline, 7 Amer. J. Fam. Law 117 (1993). (back)

57  Although the name "income shares" connotes a sharing of the support obligation between the father and mother, the term "shares" is intended to connote a child's rightful claim on parental income, as in shares of stock, or shares of ownership in an income-producing real estate unit. R. Williams, Development of Guidelines for Child Support Orders: Advisory Panel Recommendations and Final Report, at II-67, n.77 (U.S. Department of Health and Human Services, Office of Child Support Enforcement, 1987). (back)

58  R. Williams, Guidelines for Setting Levels of Child Support Orders, 21 Fam. L. Q. 281, 289 (1987). Williams has since updated his economic tables based on the work of David Betson. See D. Betson, Alternative Estimates of the Cost of Children from 1980-1986 Consumer Expenditure Survey (U.S. Dep't of Health and Human Services, Office of Assistant Secretary for Strategic Planning, 1990). See also B. Barnow, "Economic Studies of Expenditures on Children and Their Relationship to Child Support Guidelines," Child Support Guidelines: The Next Generation (U.S. Dep't of Health and Human Services, Office of Child Support Enforcement, 1994). For a more complete discussion of economic data, see § 4.02. (back)

59 R. Williams, Guidelines for Setting Levels of Child Support Orders, 21 Fam. L.Q. 281, 293 (1987). (back)

 

Keywords: - child income model shares support

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