Sample Calculations for Residential Credit Using The Betson Method and the Spring Method Child Support Schedule Workgroup July 24, 2008.

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Presentation transcript:

Sample Calculations for Residential Credit Using The Betson Method and the Spring Method Child Support Schedule Workgroup July 24, 2008

Factual Assumptions Child is 10 Assume Dad = NCP because his income is higher Mom net income $2000 Dad net income $3000 Dad = 60% of income Mom = 40% of income BCSO = 443 Dad, 295 Mom = 738 total

The Betson Formula Residential credit = R x T x BCSO + (1 – S) x D x BCSO R = % of overnights with NCP T = proportion of the BCSO that is transferred between households when child changes residence (assume 40%) S = NCP % of net income D = duplicated expenses (assume 50%)

Betson Formula for Residential Credit (R x.4 x BCSO) + [(1 – S) x.5 x BCSO]

Betson Formula for NCP obligation [S x BCSO] – {[R x.4 x BCSO] + [(1 – S) x.5 x BCSO]}

NCP Obligation when BCSO = 738 and NCP % of income = 60% (Betson).60 x 738 – {[R x.4 x 738] + [(1 –.60) x.5 x 738]} = – [295.2R + (.4 x.5 x 738)] OR – [(R x 295.2) ]

Child 100% with Mom (Betson) NCP obligation $443 (no residential credit)

Child 90% with Mom (Betson) NCP obligation = [.60 x 738] – {[.1 x.4 x 738] + [(1 –.60) x.5 x 738]}= – ( ) = – = $265.8

Child 80% with Mom (Betson) NCP obligation =.60 x 738 – {[.2 x.4 x 738] + [(1 –.60) x.5 x 738]}= – ( ) = $236.16

Child 70% with Mom (Betson) NCP obligation =.60 x 738 – {[.3 x.4 x 738] + [(1 –.60) x.5 x 738]} = – ( ) = – = $206.64

Child 60% with Mom (Betson) NCP obligation =.60 x 738 – {[.4 x.4 x 738] + [(1 –.60) x.5 x 738]} = – ( ) = – = $177.12

Child 50% with Mom (Betson) NCP obligation =.60 x 738 – {[.5 x.4 x 738] + [(1 –.60) x.5 x 738]} = – ( ) = – = $147.60

The Spring Method Traditional “Cross Credit” Method Direct costs = BCSO x % of overnights % of overnights = R S = % of income Transfer payment = (S x BCSO) – (BCSO x R)

Spring Formula for NCP obligation Transfer payment = (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = – 738R

Child 100% with Mom (Spring) (.6 x 738) – 738R = – 0 = $443 (No residential credit)

Child 90% with Mom (Spring) (.6 x 738) – 738R = – 73.8 = $369.00

Child 80% with Mom (Spring) (.6 x 738) – 738R = – = $295.20

Child 70% with Mom (Spring) (.6 x 738) – 738R = – = $221.40

Child 60% with Mom (Spring) (.6 x 738) – 738R = – = $147.60

Child 50% with Mom (Spring) (.6 x 738) – 738R = – 369 = $73.80

Comparison – How Much Does Dad Pay? Percentage of Time Spent with Mom Dad Pays Under Betson Method Dad Pays Under Spring Method 100% with Mom % with Mom % with Mom % with Mom % with Mom % with Mom

What if Mom makes more than Dad does? Scenario 1 (Betson) Assume R = 10% Transfer Payment =.4 x 738 – (.1 x.4 x (.6 x.5 x 738) = – ( ) = $44.30

What if Mom makes more than Dad does? Scenario 2 (Betson) Assume R = 20% S x BCSO =.4 x 738 = R x T x BCSO =.2 x.4 x 738 = (1-S) x D x BCSO =.6 x.5 x 738 = – ( ) = $14.76

What if Mom makes more than Dad does? Scenario 3 (Betson) Assume R = 30% S x BCSO – { R x T x BCSO + (1-S) x D x BCSO}.4 x 738 = x.4 x 738 = x.5 x 738 = – ( ) = Should there be a negative residential credit?

What if Mom makes more than Dad does? Scenario 1 (Spring) Assume R = 10% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = – 738R = – = $ Scenario 2 (Spring) Assume R = 20% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = – 738R = – = $295.20

What if Mom makes more than Dad does? Scenario 3 (Spring) Assume R = 30% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = – 738R = – = $ Scenario 4 (Spring) Assume R = 40% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = – 738R = – = $147.60

What if Mom makes more than Dad does? Scenario 5 (Spring) Assume R = 50% (S x BCSO) – (BCSO x R) = (.6 x 738) – 738R = – 738R = – = $73.80 This formula works the same no matter which parent has the higher monthly net income.