Monday, September 28, 2009

Indiana Child Support Amendments - Pt III

2015 Indiana Child Support Guidelines
review scheduled for public comment

This is my third posting in a series that I am doing on the Amendments to the Indiana Child Support Guidelines that will take effect 01 January 2010. Part II covered the issue of the dissent of opinion in this cause which demonstrated the bias that remains in some of our Supreme Court justices.

III - Changes in computing support
Definition of weekly gross income
Imputed income
Adjustment to weekly gross income
Minimum support

Haase v. Roehrscheid, 6 Ind. 66, 68 (1854) “[i]t is the duty of a father to support and educate his minor children”. It has long been held by Indiana's highest court that a man has a duty to support an educate his children. This was reaffirmed by the Court in 2007. In this section on the amended Indiana Child Support Guidelines I am examining what is income, what's the minimum a noncustodial parent is obligated to pay and what adjustments can and should be made to the parent's income.

I am pleased to say that, although the Guidelines do not provide for a realistic level of child support payments, the Guidelines are moving back towards the duty of a father to educate his children and provide support.

Definition of weekly gross income

The definition of income has long included just about everything except using pennies from the tray at the convenience store. The current guidelines include gifts, prizes, inheritance and gambling winnings. This is one of the reasons I recommend that anyone paying court ordered child support not support any lottery, raffle, gaming or other types of gambling. Many states no have laws allowing for the interception of state lottery funds to be applied towards a child support arrears. This is a lose-lose situation. Not only are you out the money you spent on lottery tickets but you support payment amount could be increased because of your higher income.

Another thing that is a whole subject on its own is inheritance. It would be wise to have your parents or whomever has named you as a beneficiary establish a trust for your benefit. One thing you don't want to have happen is that a parent dies and leaves a large inheritance, i.e. income, to you which result in your support payment order being adjusted upward. You'll have to wait at least a year and for a substantial change, such as that person dying again and leaving less to you, for you to get a downward modification.

An addition to the Guidelines is that Social Security disability benefits paid for the benefit of the child must be included in the parent's gross income. The disabled parent is entitled to a credit for the amount of the Social Security disability benefits paid for the benefit of the child. This means that instead of the common practice of support being a pass-through the disability will now be considered the parent's income and a credit for support paid.

Imputed income

There is a valid and justifiable reason to sometimes impute the income a person could be making. A parent works for 15 years at the same job and one week after getting a support order based upon that income quits and goes to work at a convenience store for 1/4 the wages. There the court should impute the income at the prior level.

Take the same person in the same situation working at the family business as he has since dropping out of high school. Suddenly the business files bankruptcy and is liquidated. The court then imputes income at the same rate family was paying this person with no high school diploma and no other job experience. It is wrong for the court to do that.

Take my situation when my support was first figured. I spend two weeks acquiring, photographing and listing items on ebay. I spend two weeks selling the items. Finally I spend two weeks processing payments, packaging and shipping or delivering the items. The court determines that I could do the three separate things simultaneously in the same volume or frequency. The court also concluded that I could avoid paying ebay their fees and that those fees should not offset the income. The court then imputed my income at over three times what it actually was and ordered that I pay 99.7% of my disposable income in support for one child. That was clearly wrong for the court to do.

I brought my situation to the attention of the guidelines committee as did many others with similar stories. Somehow they listened to us. They have added some commentary to the Guidelines that address these issues.

Following the portion which states that another purpose for imputing income is to fairly allocate support when one parent remarries and chooses not to be employed. "However, attributing potential income that results in an unrealistic child support obligation may cause the accumulation of an excessive arrearage, and be contrary to the best interest of the child(ren). Research shows than on average more noncustodial parent involvement is associated with greater child education attainment and lower juvenile delinquency. Ordering support for low-income parents at levels they can reasonably pay may improve parent-child contact; and in turn, the outcomes for their children.

The commentary further cautions that "Discretion must be exercised on an individual case basis to determine whether under the circumstances there is just cause to attribute potential income to a particular unemployed or underemployed parent.

There are two additional factors added to be used in determining imputed income. The first is if the parent is unable to obtain employment because of exceptional circumstances such as a mental illness, other health issue, caring for a disabled child or child care costs make it prohibitive. The second is when the parent is incarcerated.

The Indiana Supreme Court altered long-standing case law in regards to incarcerated parents and imputed income in Lambert v Lambert. The court opined that it is inappropriate to impute an incarcerated parent's pre-incarceration income during the time of incarceration based upon incarceration being voluntarily unemployed. Although some states allow for incarceration to allow for an automatic abatement of support under the Absolute Justification Rule others such as Indiana have viewed breaking the law as being a voluntary action and any resulting unemployment from incarceration as being voluntarily unemployed. In Lambert the Court said, "The choice to commit a crime is so far removed from the decision to avoid child support obligations that it is inappropriate to consider them as identical."

The Court concluded that while incarcerated the parent's income resulting therefrom should be considered in setting support.

One section was also tweaked a bit which is worth noting. "[P]otential income may be determined based upon such factors as the parent's unemployment compensation, job capabilities, education and whether other employment is available." Previously the Guidelines stated the potential income was based upon some factors. Now it may be "determined" based upon those factors. This means that it no longer has to be based on those factors but essentially that those factors can be considered to determined the amount of support.

Also, unemployment compensation was added. This would allow for support to be based upon unemployment compensation rather than imputing income based upon the prior income.

Finally, the consideration of whether employment is available replaced "if" employment was available. This is very subtle but can significantly affect the support amount. "If" is as absolute as day and night. It's almost like saying if the sun is shining versus whether you are in the sunlight. If there are ads in the newspaper then employment is available. Whether employment is available ask if you can get the job.

Adjustment to weekly gross income

This portion has not changed in substance but in wording. The section was wiped out and replaced with clearer language. The percentage adjustments for subsequent children are the same. Now it is a deduction of .065 rather than a multiplying factor of .935. Support obligation of both parents is to be calculated with adjustments to each for children born or adopted subsequent to the prior support order.

Adjustment for health care costs has been removed. Health care is an exclusive section that will be analyzed later.

Minimum support level

The Indiana Guidelines had recommended that minimum child support payment orders be set at $25 per week. One problem in setting this minimum is that it does not take into consideration that the NCP may not be able to afford that amount. As an example let's say the parents have the children exactly half the time each. The mother is designated as the custodial parent. She earns $198 per week while father earns $202. If these were married parents and they spent 25% of their household income on the child then that would be $49.50 for mother and $50.50 for father. Assuming they were each responsible for buying equal amounts of goods for the child, just as in 50/50 custody then that difference of one dollar divided by the two would mean father owes mother $.50. They would each be spending $50 on goods for the child.

Get divorced though and the guidelines change that. Father would pay to mother $25 giving her $74.50 to spend while leaving father with only $25.50 to spend. Yet, each is to buy the same things. That means the father would have to sacrifice spending on himself to instead buy for the child. Mother would then have extra money to spend on herself. This is a manifest injustice.

The Guideline revisions now provide that the court may consider $12 as a minimum. This would still be an injustice in our described situation. The Guidelines do provide that there are situations where the support order may be zero. One is when the NCP has significant parenting time. The Guidelines are also modified to require that a numeric amount of child support shall be ordered.

There is only one reason that can justify entering a child support payment order of $0.00. That is so the clerk's office can collect a $55 per year support fee. Why the Supreme Court feels that a parent who can't afford to pay $1 per week can afford to pay more for a court fee is astonishing.

The Guideline revisions also took away the discretion of judges to order a "specific amount of child support" such as one bag of diapers, two cans of formula and etc per week. Instead judges are now required to enter a numeric amount. It is unfortunate that the Supreme Court has sought to remove the NCP from having more active involvement with the child to being nothing but an ATM even if it does not pay out.

The court provided some reasons that would justify a $0 support order. These include a parent with a mental or physical disability, who is incarcerated, is caring for a disabled child or parent, has a high parenting time credit or has been affected by a natural disaster.

Most states have set their minimum monthly child support at $50 or $12 per week. Economic data suggests that $100 weekly income, which is half of the Federal poverty guideline, is not enough for a parent to live at subsistence level. The Indiana Guidelines had set minimum support at $25 for one child and $50 for two. This would represent 25% and 50% of that parent's income.

The previous recommendation that the court set some numeric amount of support even when a parent has no income has been removed.

The 2009 amendment are a substantial change to the current Indiana Child Support Guidelines. These Guidelines will take effect 01 January 2010. Before seeking a modification of support get appropriate counsel so you know if you should wait until after the changes take effect.

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