1 Tennessees New Child Support Guidelines Income Shares

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Tennessee’s New Child Support Guidelines

Income Shares

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Purpose

• Captures actual child-rearing expenses at various levels of parental income and then pro-rates these expenses between both parents

• Requires consideration of the income of both parents – Allows child to share in the

financial resources of both parents– Each parent is responsible for

his/her pro-rata share of the child support obligation

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Basic Concepts

• Custodial Parent is now referred to as the Primary Residential Parent (PRP)

• Non-Custodial Parent is now referred to as the Alternate Residential Parent (ARP)

• Two parenting situations – Standard – one PRP/ARP for

all children– Split – two PRPs/ARPs for all

children

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Definitions

• PRP – the parent with whom the child resides more than 50% of the time

• ARP – the parent with whom the child resides less than 50% of the time

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Definitions

• Standard Parenting – all children under the order have the same PRP and the same ARP

• Split Parenting – one parent is the PRP/ARP for at least one child under the order and the other parent is PRP/ARP for at least one other child under the order

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Tools for Calculation of Support

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• Worksheets– Child Support Worksheet – to be used in all cases for

calculation of the child support obligation– Credit Worksheet – to be used when calculating

credits for a parent’s qualified other children– Worksheets are Excel - based and perform all

necessary calculations– Calculation results on the Credit Worksheet are

automatically transferred to the Child Support Worksheet

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• Child Support Schedule – provides the child support obligation for various levels of parental income and number of children – always round up to the nearest increment of $50

CombinedAdjusted One Two Three Four Five

Gross Child Children Children Children ChildrenIncome

2700 544 758 873 973 1070

2750 553 770 886 987 1086

2800 561 781 898 1002 1102

Tennessee

Schedule of Basic Child Support Obligations

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Gross Income Calculations

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• Gross Income– From all non-exempt sources – same is in

current Guidelines– Both parents of the child – Do not consider

income of a non-parent caretaker– No deductions for federal income taxes or

FICA contributions, except for self-employed parents – these taxes are taken into consideration on the Child Support Schedule in each child support obligation

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– Willful and Voluntary (Under)Unemployment –• Generally the same as in current Guidelines• Determination now applies to both parents• Applies to any intentional act of the parent

– Imputed Income –• $ 35,851 for males• $ 26,450 for females• From American Community Survey of 2002 for full

time Tennessee workers

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• Adjusted Gross Income (AGI)– Gross Income minus the following:

• Self-employment taxes paid by the parent• Amounts paid on pre-existing child support orders• Support provided to qualified other children of the

parent

– The AGI of each parent is combined to determine the percentage of income (PI) for each parent

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Credits for Qualified Other Children

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• Other children – are those children not presently before the tribunal for the establishment or modification of a child support order

• Other children are qualified if:– The parent is legally responsible for the child’s

financial support– The parent is actually providing financial support to

the child

• Credits are available to either parent

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Definitions

• A person is legally responsible for a child if a child is - – Born of the person’s body, – Born of the person’s

marriage, – The legally adopted child of

the person;– Voluntarily acknowledged

by the person, or– Otherwise determined to

be the child of the person

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• Pre-existing support orders– Pre-existing determined from

the date the order was initially entered

– Credit allowed for the average monthly amount actually paid 12 months prior to hearing, up to the amount of the order

– Does not include amounts paid on arrears

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• Children not subject of pre-existing child support orders– Credit available up to 75% of the amount of a

theoretical order, using• Income of the parent seeking the credit

– Credit for self-employment taxes paid– No credit for pre-existing orders

• Number of qualified other children

– Do not consider the income of or support provided by a child’s other parent

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Definitions

• Theoretical Order – – A hypothetical order which

allows the finder of fact to determine the amount of a child support obligation if an order existed.

– Used to determine the amount of credit allowed as a deduction from a parent’s gross income for a parent’s qualified other child who is not under a pre-existing child support order.

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– In-Home Children• Those qualified children who reside with the parent more

than 50% of the time• The amount of the credit allowed for these children is 75% of

a theoretical order

– Not-In-Home Children• Total of all qualified children residing with the parent less

than 50% of the time, without regard to the child’s primary household

• The amount of the credit allowed for these children is the lesser of:

– 75% of a theoretical order– Support actually provided – established by documentary proof

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Definitions• Documentary proof of

monetary support - – Physical evidence of monetary

payments to the child’s caretaker, such as canceled checks or money orders

– Evidence of payment of child support under a subsequent child support order, such as a payment history from a tribunal clerk or child support office or from the Department’s internet child support payment history

– “In kind” remuneration such as food, clothing, formula, or diapers is not acceptable for this credit

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Basic Child Support Obligation

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Basic Child Support Obligation• Amount of basic support to be provided by both

parents is determined on the Child Support Schedule by cross-referencing the combined adjusted gross income (AGI) of both parents with the number of children for whom support is being calculated – amount does not include– Adjustments for additional expenses– Adjustments for parenting time– Adjustments for deviations– Uninsured medical expenses

• This amount is allocated between the parents according to the percentage of income (PI) of each parent

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Definitions

• Percentage of Income (PI) – the PI for each parent is calculated by dividing each parent’s AGI by the combined AGI of both parents

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• Standard Parenting – One BCSO– The combined gross income of both parents– The number of children for whom support is

being calculated

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• Split Parenting – A BCSO for each parent– Mother’s BCSO

• The combined adjusted gross income for both parents• The number of children for whom support is being calculated

for whom the Father is the PRP • The Mother’s PI

– Father’s BCSO• The combined adjusted gross income for both parents• The number of children for whom support is being calculated

for whom the Mother is the PRP • The Father’s PI

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Policy• Income Shares vs. the Flat

Percentage– Economic studies reveal that,

as income increases, the dollar amount spent on child-rearing expenses increases but the percentage of income spent on child-rearing expenses decreases

– Accordingly, flat percentages have statistically been too low at lower incomes and too high at higher incomes

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PolicyProportion of Net Income Spent on Children

(based on Betson-Rothbarth Estimates)

USA 2003 Dollars Percentage of Net Income Spent On… One Child Two Children Three Children

Less than $15,607 26.80% 38.20% 44.70%

$15,607 - $20,807 26.72% 38.02% 44.47%

$20,808 - $26,010 26.44% 37.41% 43.67%

$26,011 - $31,212 26.16% 36.83% 42.90%

$31,213 - $36,415 25.88% 36.36% 42.25%

$36,416 - $41,617 25.57% 35.86% 41.56%

$41,618 - $46,819 24.02% 33.59% 38.87%

$46,820 - $52,022 22.91% 31.92% 36.88%

$52,023 - $62,425 21.75% 30.14% 34.81%

$62,426 - $72,830 18.96% 26.26% 30.33%

$72,831 - $83,235 18.58% 25.69% 29.59%

$83,236 - $104,044 17.28% 23.80% 27.30%

$104,045 - $130,055 15.64% 21.42% 24.45%

$130,056 + 13.68% 18.56% 21.06%

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Definitions

• Parenting time adjustment - adjustment to the ARP’s portion of the BCSO based upon the ARP’s parenting time with the child

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• Parenting Time Adjustment– Reduction to BCSO– Parenting time with the child

greater than 120 days• 121 - 136 days = 10% reduction • 137 - 151 days = 20% reduction• 152 - 166 days = 30% reduction • 167 - 181 days = 40% reduction • 182+ days = 50% reduction

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• Parenting Time Adjustment– Increase to BCSO– Parenting time with child less

than 54 days• 53 – 39 days = 10% increase • 38 – 24 days = 20% increase • 23 – 9 days = 30% increase• 8 – 0 days = 35% increase

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Definitions

• Days – a parent gets credit for a day of parenting time if the child spends the majority of a 24 hour calendar day with or under the control of a parent and that parent expends a reasonable amount of resources on the child during this time period (such as the cost of a meal or other such costs directly related to the care and supervision of the child)

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Treatment of Expenses

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Treatment of Expenses• Amounts actually paid by a

parent or other caretaker• Basic Expenses

– Such as:• Food• Clothing • Housing

– Included in the BCSO

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• Additional Expenses– Mandatory Expenses

• Child’s healthcare premium – Expense attributable only to child for

whom support is being calculated

– Allocated according to parent’s PI

– Added on to BCSO

• Work-related childcare– Projected over next 12 months and

averaged for a monthly amount

– Includes only amounts actually paid

– Allocated according to parent’s PI

– Added on to BCSO

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• Uninsured Medical Expenses

– No calculations on the Worksheet

– Order shall provide for payment of expenses according to parent’s PI or as otherwise specified by the tribunal

– Recurring amounts added to the Presumptive Child Support Order (PCSO)

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Definitions

• Uninsured Medical Expenses - medical expenses which medical expenses which include, but are not limited to, include, but are not limited to, health insurance co-payments, health insurance co-payments, deductibles, and such other deductibles, and such other costs as are reasonably costs as are reasonably necessary for orthodontia, dental necessary for orthodontia, dental treatment, asthma treatments, treatment, asthma treatments, physical therapy, vision care, physical therapy, vision care, and any acute or chronic and any acute or chronic medical/health problem, or medical/health problem, or mental illness, including mental illness, including counseling or other medical or counseling or other medical or mental health expenses, that are mental health expenses, that are not covered by insurance.not covered by insurance.

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– Extraordinary Expenses• May be added to the Presumptive Child Support

Order as a deviation in the discretion of the tribunal• Extraordinary Education Expenses• Special Expenses - can be added to the BCSO when

the expense exceeds 7% of the BCSO

Summary of Calculations

• Basic Child Support Obligation (BCSO) – – Obtained from the Child Support Schedule– Based on number of children and combined

AGI of both parents

• Adjusted Support Obligation (ASO)– BCSO adjusted for parenting time, the health

insurance premium, and child care

Summary of Calculations

• Presumptive Child Support Order (PCSO) – The ASO adjusted by the total amount of the health

insurance premium and/or the work-related child care paid through payroll deduction; and/or

– The ASO adjusted for the statutory threshold

• Final Child Support Order (FCSO)– The PCSO adjusted for deviations and uninsured

medical expenses– In the absence of such adjustments, the PCSO is the

FCSO

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Child Support Order• High-Income Threshold

– Absent rebuttal, the PCSO is limited to the following amounts -

• $2100 for one child• $3200 for two children• $4100 for three children• $4600 for four children• $5000 for five children

– With rebuttal, additional amounts may be added to the PCSO as a deviation

– Also applicable to the calculation of a theoretical order

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Child Support Order• Deviations

– Must consider the best interests of child for whom support is being calculated

– Order shall include guideline amount and findings in support of deviation

– Reasons• Same as current Guidelines• Extraordinary Expenses• Rebuttal of high-income threshold• Low income of either parent

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Child Support Order• Modifications

– Generally require a significant variance

– No significant variance needed if• Providing for healthcare needs

• Eliminating a previous deviation due to a change in circumstances

• Retroactive Support – – From birth of the child or separation

of the parties– Using Guidelines in effect at the time

of the order

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Modification

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Modification• After implementation of the Rules, a significant variance is -

– At least a 15% change in the ARP’s gross income - and/or– A change in the number of children for whom the ARP is legally

responsible – and/or– The child for whom support is being calculated becoming disabled –

and/or– The parties entering into an agreed order for modification of the

support obligation in compliance with these Rules – and – – At least a 15% (or 7.5%) change in the support obligation– After January 1, 2006, a significant variance will be a 15% (or 7.5%)

change in the support obligation– 7.5% applies to low-income parents

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Definitions• Low-income parent –

– a parent who, when working at his/her full capacity according to his/her education and experience and not willfully and voluntarily unemployed or underemployed, has adjusted gross income at or below the federal poverty level for a single adult

– The federal poverty standards will be available at www.state.tn.us/humanserv

– Current amount is $9310 annual gross income

http://www.state.tn.us/humanserv

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Modification

• Hardship Deviation -– When modifying an order under Income Shares that

was established under the current Guidelines• For the first modification, whenever it should occur • Can be applied only one time

– Can limit the amount of the modification if:• Decrease would impair the household of the PRP• Increase would impair the household of the ARP

– Deviation cannot be used in a subsequent action to create a significant variance

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Learning Tools

• Income Shares Tutorial on the Department’s website – includes– All pertinent documents– A detailed walkthrough of a

support calculation– Interactive examples– FAQs

• www.state.tn.us/humanserv/is/incomeshares.htm

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Documents

1 Tennessees New Child Support Guidelines Income Shares