Child support is a relatively straightforward matter, because it is based upon a specific formula. However, issues such as a parent’s “potential” income, or determining income for a self-employed parent, can present challenges. In some situations, a deviation from the support guidelines is appropriate.
Types Of Child Support
Under Minnesota law, “child support” is comprised of three specific types of support: (1) basic support; (2) medical support; and (3) daycare support.
Basic Child Support
Basic support involves the traditional notion of child support – a cash payment made from one parent to the other, each month, for the benefit of the child.
Medical support involves a division of the medical and dental insurance premiums for a child, along with an allocation of any uninsured medical and dental expenses. Medical support is determined by comparing the relative incomes of the parties.
Daycare support involves a division of work-related childcare expenses. Costs for childcare outside of a parent’s pursuit of work or education are not divisible among the parties.
Minnesota Child Support Guidelines
The amount of child support paid from one parent to the other is based on a formula known as the “Minnesota Child Support Guidelines.” These guidelines are presumed to determine appropriate support levels, but are subject to an upward, or downward, deviation, if the circumstances justify. It’s best to have experienced child support attorneys in Minnesota evaluate your situation.
In the vast majority of cases, the judge will order support amounts based upon the guidelines. For that reason, child support is a rare “black and white” legal issue.
The support guidelines take into account the following variables: (1) the gross monthly income (or potential gross monthly income) of each parent; (2) the number of minor children; (3) the amount of parenting time exercised by each parent; (4) the cost for a child’s medical and dental insurance premiums; and (5) the cost for a child’s daycare.
Once these variables are placed into the child support calculator, specific support figures are determined with the expert assistance of our child support lawyers in Minnesota.
Income for W-2 wage earners is easily determined by reviewing paystubs. The income variable can be difficult to ascertain if a parent is self-employed, underemployed or unemployed. In those situations the court can “impute” income, based upon a parent’s earning history, or determine “potential income” based upon a parent’s educational background and current job opportunities.
Basic Support Examples
If both parents earn equal income, and share equal parenting time, no basic child support will change hands. However, the parties will still need to divide medical and childcare costs.
On the other hand, even if the parents share equal parenting time, if one parent earns significantly more than the other, the higher income earner will pay some amount of basic child support to the other. That amount is much smaller, however, than would be paid if the higher income earner exercised a limited parenting time schedule.
A parent who cares for a child a good majority of the time (greater than 54.9%) will receive a basic support award from the other parent – even if the primary parent’s income is higher than the non-primary parent.
Medical And Daycare Support Examples
If the parents earn equal income, medical insurance premiums and uninsured medical expenses are divided equally. However, if one parent, for example, earns $100,000 per year, and the other parent earns $50,000 per year, the higher income-earner will pay 67% of the medical costs, while the lower-income earner will pay 33%.
Daycare expenses are apportioned in the same manner as medical expenses.
Children Eligible For Support
In Minnesota, a child is eligible for child support until they “emancipate.” Emancipation is defined as attaining the age of 18, or high school graduation, whichever is later (but in no event past the age of 20).
In some situations, a child is deemed to emancipate before the age of 18, if, for example, they join the military, or are self-supporting. Our experienced child support attorneys in Minnesota can help determine if that’s the case.
Podcast: Overview of Minnesota Child Support Issues
Welcome once again everybody to another podcast. This is Jason Brown with the Brown Law Offices up in the Northwest suburbs of the Minneapolis-Saint Paul area. This week, we want to talk with you about child support under Minnesota law. This is an issue that unlike some issues, in particular spousal maintenance or custody and parenting time, has a lot less emotion attached to it. That’s because child support under Minnesota law is basically decided pursuant to a formula. If the law is a sea of grayness, child support issues are usually, and I say usually because there’s a few caveats that can make things difficult, but they’re usually pretty black and white.
Basic Child Support
Under Minnesota law, child support is actually three distinct types of support. The first type of support involves the traditional notion of child support. That’s a cash payment made from one party to the other. It includes regular consistent payments from typically the noncustodial parent to the custodial parent, or in a joint physical custody arrangement, the parent who earns more than the other will often have to pay some nominal amount of support to offset some of that income differential.
The second component that child support involves, medical support, and that actually involves two key pieces. One of course is the insurance that’s in place for a child, both medical and dental, and in addition, the uninsured medical and dental expenses, things like copays, prescriptions, and so forth.
And then the third element of support under the statute involves daycare or childcare support. Basically, any work-related childcare costs will be divided among the parties.
So a couple of years back, I think it’s about three years ago now, the statutes changed. And it used to be that the label, whether someone was a sole physical custodian or had joint physical custody, and the net income of the noncustodial parent were what were really critical in determining an amount of child support. But that all changed, and now, these guidelines that have been recreated involve looking at the income of both parents. Under the old guidelines, it didn’t matter what the custodial parent’s income was, but that has changed.
Minnesota Child Support Guidelines
And under the new guidelines, what the court will do is take a look at the gross income. That’s the pretax, pre-union dues, pre-health insurance deductions, pre-everything. Just what’s your annual salary, what’s your hourly rate of pay multiplied by 40 hours a week, multiplied by 2,080 hours a year, divided by 12.
That’s the number that the courts are looking at. And really, that does provide a simpler way to allocate the relevant income figures. People used to play games with net income. They would claim that their deductions were necessary. They would increase the deductions for their retirement plans and so forth. It just led to a lot of complexities. And so what the legislature did was say, “Okay, we’re just taking gross income.”
Now if a party is self-employed, that can be a difficult situation to figure out what their income is. We’ve certainly reviewed our share of income tax returns of both our own clients and opposing litigants who, they claim $60,000 a year in business revenue but $30,000 a year in deductions, most of them for their car and for meals and entertainment.
And of course, that’s going to receive some scrutiny by the court. But in some cases, it’s all legit. But it’s common knowledge. The court knows that folks who are self-employed have a number of tools at their disposal to suppress their gross income, and in some circumstances, the court will reallocate some of those deductions to arrive at what a more realistic gross income level is for that parent.
Now for those parents that are working less than full time or are unemployed, the court will do one of a couple of things. The court will either look at the actual dollar value of the unemployment benefit that a parent is receiving, or they will determine what the potential income is of an unemployed or underemployed individual. One thing the court could do is say, “Well, you have a history, or you are capable of earning X number of dollars per hour working on a full-time basis.”
Or, and this is kind of an ironic twist in the law, family court judges are to presume that a party is capable of earning not minimum wage but one and a half times the minimum wage on a 40-hour work week for purposes of calculating child support.
Determining Child Support
So once the court has determined what the gross income is of each parent, they’re going to take that and plug that into this formula, this black and white mathematical equation. Some of the other variables will include what the cost is for health insurance and for daycare. And the most important piece and variable involves the parenting time schedule.
If a parent shares basically equal parenting time, they will receive a significant credit against what they would pay to the other for the basic support obligation. The higher income earner would pay some amount to the other parent in a situation where they’re basically sharing parenting time with the child.
On the other hand, if a parent is a more traditional noncustodial parent exercising a reasonable amount of parenting time, then the court is going to afford them a 10% credit against the basic support obligation, theory being that they’re going to be spending money on the child when the child is in their care. And then finally, a parent who is basically uninvolved, if they have less than 10% of the available parenting time, then they’re not going to receive any kind of credit against the basic support.
In terms of medical support, the court is going to look at the relative incomes of the parties, known as the PICS, the percentage of income for child support purposes. Leave it to the government to give us an acronym. But the PICS is going to determine exactly how the health insurance premiums and the uninsured expenses will be divided. Let’s say that Dad earns 50,000 a year and Mom earns 50,000 a year. They’ll divide it 50/50.
Let’s say the Dad earns 40,000 a year and Mom earns 60,000 a year. Regardless of who the custodial parent is, the uninsured expenses will be divided 60/40, 60 with Mom, 40 with Dad. So keep that in mind as you move forward that just because you’re paying rather basic support to the other parent, you may wind up paying less of the overall medical expense for a child.
And then finally with daycare, that too is usually divided pursuant to the PICS with a little caveat in the sense that the parent who actually pays the daycare provider, they will receive back some sort of a tax benefit from making that payment on their federal and state income tax returns.
And as a result, the formula tweaks that a little bit. For example, a parent who pays the actual daycare provider but has less than 50% of the combined income may wind up paying greater than 50% of the daycare just because of the tax credit that they’ll be receiving towards the end of the year.
Impact of Alimony
Of course, one other variable, and there are many that we haven’t discussed here including if a parent has another child support obligation, if there’s alimony being paid. We’ve hit the high points here, but one of the other, I guess, critical variables involves the number of children who are eligible for support. Probably a good time to just touch on the fact that a child under Minnesota law is eligible for child support until they emancipate.
Emancipation of a Child
Emancipation is a fancy way of saying they’re 18 years of age and have graduated from high school. A child under Minnesota law is eligible for support until their 18th birthday or high school graduation, whichever is later, but in no event past age 20. And so as time goes on, as children emancipate, parties can go back and have their support orders reviewed and reduced in light of the fact that there are fewer children eligible for support in the household.
Modify Child Support
And then finally, a lot of questions come up about the modification of child support. Folks are free to take advantage of an opportunity to modify support. However, there has to be a substantial change in circumstance. And what that means is that the child support award, the amount that has to be paid, is both $75 different than the original court order, and that is at least 20% of the overall basic support obligation.