Because there had previously been too much variance between payments awarded under similar circumstances – and the payments had been deemed too low overall – federal laws were passed in the 1980’s obliging states to establish guidelines for determining child support. These guidelines are formulas that take into account both parents’ income, the number of children, and sometimes other factors. They are based upon studies of how much families typically spend on raising their children. Guidelines are applied to children born to married parents as well as children born out of wedlock.
Most states consider parents’ net income: this is gross income minus federal and state income taxes, Social Security, Medicare tax, and health insurance deductions. Sometimes other financial obligations, including mandatory retirement contributions, union dues, and debts incurred for the benefit of the whole family during the marriage, are considered. Determining income in cases where parents are self-employed is more complicated. Reasonable business expenses are usually eligible for deduction, but high expenses and issues like depreciation (for example, of office equipment) are at the discretion of the courts.
Some states may use parents’ gross income when applying guidelines. This can include not only sources of income like wages and investments but also non-wage benefits like housing allowances and use of company cars.
Support payments are typically not deferred even when children spend a considerable period of time with non-custodial parents (for example, during summer vacations or long holiday breaks). The reasoning here is that many of the expenses involved with child support – rent, mortgage, utilities, clothes, and insurance – have to paid year round regardless of whether children are with custodial parents at any given time. There are instances, however, when parents themselves or the courts can set child support payments lower during vacation periods, considering the money that custodial parents might be saving on child care and food expenses.
There are certain circumstances that may warrant courts departing from child support guidelines. They may award higher payments if children have special educational needs, like private schooling or tutoring. Child care expenses and medical and dental expenses not covered by insurance may also be considered. If parents have new spouses, this can influence the child support order either way. For example, a non-custodial parent receiving income from a new spouse could be obligated to pay more, whereas a custodial parent receiving income from a new spouse might be entitled to less child support from the other parent.
Other circumstances that can warrant going below child support guidelines include joint custody arrangements (when both parents share fairly equally in the care of the child), expenses involved when the non-custodial parent visits the child (for example, when the parents live in different states), and money that comes to a child independently, like an inherited trust fund of a substantial amount.