WHEN MORE CREATES HAVOC-CHILD SUPPORT IN MULTIPLE FAMILIES Andrew Southmayd, Commissioner, Delaware Family Court, Sussex County Nicholas Palos, Support Magistrate, Kings County (Brooklyn, NY) Family Court Scott Cade, Regional Vice President for Operations, ACS, Inc. 1

Objectives of Presentation Illustrate the unique difficulties in calculating child support orders where a parent has multiple children with multiple co-parents Recognize the difficulty in enforcing support orders for multiple families given the finite income pool available to the non-custodial parent Spark discussion of ways to address these problems which are fair to all parties concerned 2

Methodology of Presentation Presentation will be interactive – While there is time for questions and answers at the end of the session, the audience should feel free to express comments of their own during the presentation – If no voluntary interaction, the presenters reserve the right to solicit audience members involuntarily for their input 3

Methodology of Presentation Two jurists will demonstrate the mechanical and legal problems involved in multiple family situations – Description of each state’s support calculation where multiple support obligations exist – Application of each state’s support calculation to multiple obligation situations Establishment of order Modification of order Enforcement of order 4

Multiple Family Factors Nationwide Which children qualify? – Own household? – Order of support? – Must it be paid? – No order and not in H/H? – Step-children? – All or just pre-born? – # Limitation? Policies: – Dilution of resources; – Disincentive to procreate; – Equitable distribution; – Sustain obligor. Modification: – Is a new child or new order a substantial change of circumstance?

Delaware Child Support Formula In the context of Multiple Obligations

Methods available: Amount of other orders – Deduction from income – Must it be paid? – All or just pre-born? – Race to the courthouse? Percentage reduction to: – Gross or net Income? – Only portion of income? – Order itself? – Portion of the order?

Gross Income for each parent minus – Taxes (S-1 for everybody); – Health insurance, pension (up to 3%), union dues, disability insurance and “other”; – Self support allowance (currently $1120/mth) With no other children, this is the net income each parent has available for child support, BUT if there are other children...

Adjustment for the Support of Other Dependent Children Net income for each parent is adjusted one more time based upon the number of “other” children the parent must support: Number of childrenAdjustment for Other children 0100% 182% 273% 3 or more67%

Qualifications 1.Child support order (paid or not); or 2.Child(ren) live in your household; or 3.Evidence of a “pattern of support”; but 4.Step-children are NOT included. Order of birth is irrelevant; under Delaware law all children are equal.

Back to the Formula Having adjusted for “other children”, each is assigned a (%) share for the “Primary” needs of the children: 1.Primary Support allowance; 2.Daycare necessary for employment; 3.Health Ins. allocable to children (new); and 4.Private school (if found affordable)

Primary Support allowances Number of ChildrenPrimary Support Allowance I$ 510 2$810 3$1090 Each additional+ 250

Standard of Living Adjustment After each parent is assessed their proportion share of primary support, a percentage (SOLA) is applied to any remaining income: Number of ChildrenSOLA 117% 224% 329% Each additional+4%

Credits Primary & SOLA obligations combine for the Gross Obligation; then each parent retains: 1.Primary allowance for children in own home; 2.Daycare, allocable health insurance & private school tuition paid to providers; 3.Per capita SOLA for children in own home; and 4.Parenting Time Credit (% based on #overnights). Gross Obligation minus credits = Net Obligation (i.e. the support order) unless...

Self Support Protection (aka Maximum Allowable Obligation) If the self support allowance = minimum amount necessary for a person to remain productive in the workplace;

Self-Support Protection 2 And even with the Adjustment for the Support of other Children, multiple orders can push low income obligors far below Self Support allowance;

Self-Support Protection 3 Then low income obligors with multiple orders are doomed to fail because they lack adequate resources to remain productive.

Self-Support Protection 4 Percentage of net income (after self support) based upon # of “other children”. Preserves 80% to 100% self support allowance. Minimum order rules still apply.

Summary DE discounts net income to accommodate the needs of other children; Actual amounts of other orders are irrelevant. DE gives credit to both obligors and obligees; DE is not concerned with order of birth; No credit for step-children; Birth or adoption of add’l children is a substantial change of circumstances for modification; For low income obligors, an individual order cannot exceed a certain % of net income.

New York’s Child Support Standards Act In the context of Multiple Obligations

Determination of Parental Income Include – Salary – Self-Employment Income – Social Security Benefits – SSI – Rental Income – Investment Income – Money Goods Services from others – Employee Perks – Unemployment Benefits – Pension – Spousal Support 21

Determination of Parental Income 2 Credit – FICA Taxes (Social Security, Medicare, Self-Employment) – New York City or Yonkers City Income Taxes – Child Support actually paid for other children Court order Written agreement – Spousal Support 22

Determining base support Determine each parent’s adjusted income Determine combined parental income and each parent’s share Apply the applicable child support percentage to the combined parental income The result is prorated between the parents based on shares of combined income 23 Number of children in household Applicable chi ld support percentage 117% 225% 329% 431% 5 or moreAt least 35%

“Add-ons” Mandatory Add-ons – Reasonable child care expenses – Cost of Medical Insurance coverage Discretionary Add-ons – Educational expenses Private primary/secondary school College – Enrichment Activities 24

“BCSO” Each parent’s Basic Child Support Obligation consists of: – Pro-rata share of amount calculated with child support percentages PLUS – Pro-rata share of mandatory add-ons PLUS – Assigned share of discretionary add-ons PLUS – Pro-rata share of unreimbursed health care expenses 25

Self-Support Reserve Self-Support Reserve is 135% of the poverty income guidelines amount for a single person Currently $14, annually Includes Federal and New York State income taxes 26

Self-Support Reserve 2 When NCP’s share of the BCSO reduces income to an amount less than the self- support reserve – Difference between income and self-support reserve OR – $ per year Court must choose the option which provides the greater amount of support 27

Self-Support Reserve 3 When NCP’s share of the BCSO reduces income to an amount less than the federal poverty income guidelines for a single person – Difference between income and self-support reserve – No mandatory minimum support award 28

Deviation from guidelines Deviation based on finding that guidelines amount is unjust or inappropriate Nine specific statutory factors and one general factor – Needs of children for who’s support the non-custodial parent is legally responsible and which has not been deducted from income Financial resources of any other person obligated to support children must be considered Resources available for those children less than resources to support subject children 29

Summary NY is a race to the courthouse state – Whichever household is first gets to take their slice from the largest income pie Formalized current child support actually paid is deducted from income before application of guidelines Needs of other children to whom NCP owes a duty of support but who are not formally supported may be a basis to deviate from guidelines calculations Children conceived, born or adopted after entry of an order are not bases to modify an existing order of support Entry of a subsequent order of support is not a basis to modify an existing order of support 30

CALCULATION OF ORDER EXAMPLE 1: Joe has been brought into court by Linda, the mother of his 3 year old daughter and his 3 month old son. He is employed by a local business and earns $ per week. Linda is employed and earns $ per week. He has another child with Diane, a 2 year old daughter, and Joe was ordered by a court to pay $74.00 per week for the support of the 2 year old, including $10.00 per week for child care. Linda incurs childcare expenses in the amount of $75.00 per week to provide care for the children while she is at work. 31

Delaware Example 1 Joe & Linda

33 A. Calculate Parental Income Gross Income Social SecurityMedicare NYC Income Tax Child Support PaidAGIPro Rata Linda$15,000.00$655.20$226.20$ $14, % Joe$28,600.00$1,201.20$414.70$611.90$3,848.00$22, % B. Determine BCSO 1. Income ComponentCPIPercentage Amount GeneratedPro rata shares $36, %$9, Linda$3, Joe$5, Add-ons Child Care$3, Linda$1, Joe$2, TOTAL BCSO TotalLindaJoe D. Self-Support Check Income Based$9,134.57$3,471.14$5, SSR ADJUSTMENT Add-Ons$3,848.00$1,462.24$2, Joe's AGI22,524.20$22, TOTAL$12,982.57$4,933.38$8, Joe's BCSO8, Self- Support$14, Monthly$ Remaining Income14, Annual BCSO$7, Monthly BCSO$ New York Calculations

CALCULATION OF ORDER Example 2: Jane is Joe’s wife. She is the mother of his 15 year old son, his 14 year old daughter and 11 year old son. Although Joe has been voluntarily providing for the three children, she is now worried that her three children will suffer a hit to their standard of living because of the new support order issued to Linda. She filed a new application to establish an order for the three children. Complicating matters, Jane is currently unemployed, and receives $ per week in benefits. 34

Delaware Example 2 Joe & Jane

36 A. Calculate Parental Income Gross Income Social SecurityMedicare NYC Income Tax Child Support PaidAGIPro Rata Jane$13,000.00$0.00 $13, % Joe$28,600.00$1,201.20$414.70$611.90$11,670.88$14, % B. Determine BCSO 1. Income ComponentCPIPercentageAmount Generated Pro rata shares $27, %$8, Jane$3, Joe$4, TotalJaneJoe D. Self-Support Check Income Based$8,033.38$3,775.69$4, SSR ADJUSTMENT Add-Ons$0.00 David's AGI$14, TOTAL$8,033.38$3,775.69$4, David's BCSO$4, Self- Support$14, Monthly$ Remainin g Income$10, Annual BCSO$ Monthly BCSO$50.00 New York Calculations

CALCULATION OF ORDER Example 3: David is married to but separated from Emilie. They have five children together. David’s new girlfriend, Elizabeth, gave birth to twins last year. David earns $ per week. Emilie is self-employed, and her business generates $ per week in profits, but she does not file any tax returns. Elizabeth earns $ per week, but incurs $ per week in child care expenses. Elizabeth seeks an order of support. 37

Delaware Example 3A David & Elizabeth

39 A. Calculate Parental Income Gross IncomeSocial SecurityMedicareNYC Income TaxChild Support PaidAGIPro Rata Elizabeth$39,000.00$1,638.00$565.50$ $36, % David$31,200.00$1,310.40$452.40$556.80$0.00$28, % B. Determine BCSO 1. Income ComponentCPIPercentage Amount GeneratedPro rata shares $64, %$16, Elizabeth$8, David$7, Add-ons Child Care$13, Elizabeth$7, David$5, TotalElizabethDavid D. Self-Support Check Income Based$16,223.48$8,922.92$7, SSR ADJUSTMENT Add-Ons$13,000.00$7,150.00$5, David's AGI$28, TOTAL$29,223.48$16,072.92$13, David's BCSO$13,150.56Self-Support$14, Monthly$ Remaining Income$15,729.84Annual BCSO C. Resource Balancing TestAdjustment to balance resourcesMonthly BCSO$1, David's Income After BCSO$15,729.84David's BCSO$13, Federal Income Tax Withheld$832.00Total Resources$24, New York State Tax Withheld$1,071.20Available Resources$37, Net Income After Support$13,826.64Resources per child$3, Emilie's Income$10,400.00Ordered Support$7, Total Resources$24,226.64Monthly Support$ Available Resources per child$3, David's BCSO$13, Resources per child$6, New York Calculations

CALCULATION OF ORDERS Example 4: David is married to but separated from Emilie. They have five children together. David’s new girlfriend, Elizabeth gave birth to twins last year. David earns $ per week. Emilie is self-employed, and her business generates $ per week in profits, but she does not file any tax returns. David is also paying Elaine $ per week for the support of their two children. Elizabeth earns $ per week, but incurs $ per week in child care expenses. Elizabeth seeks an order of support. 40

Delaware Example 3B David & Emily

42 A. Calculate Parental Income Gross Income Social SecurityMedicare NYC Income TaxChild Support PaidAGIPro Rata Elizabeth$39,000.00$1,638.00$565.50$ $35, % David$31,200.00$1,310.40$452.40$502.40$6,500.00$22, % B. Determine BCSO 1. Income ComponentCPIPercentage Amount GeneratedPro rata shares $58, %$8, Elizabeth$4, David$3, Add-ons Child Care$13, Elizabeth$8, David$4, TotalElizabethDavid D. Self-Support Check Income Based$8,033.38$4,980.70$3, Add-Ons$13,000.00$4,980.70$3, David's AGI$22, TOTAL$21,033.38$9,961.40$6, David's BCSO$6, Monthly$ Remaining Income$16, C. Resource Balancing Test David's Income After BCSO$16, Federal Income Tax Withheld$ New York State Tax Withheld$1, Net Income After Support$14, Emilie's Income$10, Total Resources$24, Available Resources per child$3, David's BCSO$6, Resources per child$3, New York Calculations

CALCULATION OF ORDER Example 5: David and Emilie are married but have been separated for three years. They have three children together. He earns $ per week and she earns $ per week. David recently ended a relationship with Elizabeth, soon after learning she was pregnant with their child. Elizabeth earns $ per week. David has moved back in with Emilie. Prior to the birth of Elizabeth’s child, she files to establish paternity and to obtain support for the child. Before Elizabeth gives birth to her child, Emilie files for an order of support, and the parties stipulate to an order for $ per week. 43

Delaware Example 4A David and Emily LI Z

Delaware Example 4B David and Emily

46 A. Calculate Parental Income Gross IncomeSocial SecurityMedicare NYC Income TaxChild Support PaidAGIPro Rata Elizabeth$18,200.00$764.40$263.90$ $16, % David$39,000.00$1,638.00$565.50$752.00$26,000.00$10, % B. Determine BCSO 1. Income ComponentCPIPercentage Amount GeneratedPro rata shares $27, %$4, Elizabeth$2, David$1, Add-ons Child Care$0.00 Jane$0.00 Joeo TotalElizabethDavid D. Self-Support Check Income Based$4,590.31$2,891.90$1, SSR ADJUSTMENT Add-Ons$0.00 David's AGI$10, TOTAL$4,590.31$2,891.90$1, David's BCSO$1, Self- Support$14, Monthly$ Remaining Income$8, Annual BCSO-$4, New York Calculations

47 New York Calculations A. Calculate Parental Income Gross IncomeSocial SecurityMedicare NYC Income Tax Child Support PaidAGIPro Rata Elizabeth$36,400.00$1,528.80$527.80$ $33, % David$39,000.00$1,638.00$452.40$848.00$1,500.00$34, % B. Determine BCSO 1. Income ComponentCPIPercentage Amount Generated Pro rata shares $68, %$11, Elizabeth$5, David$5, Add-ons Child Care$0.00 Elizabeth$0.00 David$0.00 TotalElizabethDavid D. Self-Support Check Income Based$11,578.38$5,673.42$5, SSR ADJUSTMENT Add-Ons$0.00 David's AGI$34, TOTAL$11,578.38$5,673.42$5, David's BCSO$5, Self- Support$14, Monthly$ Remaining Income$28, Annual BCSO C. Resource Balancing TestAdjustment to balance resources Monthly BCSO$ David's Income After BCSO David's BCSO Federal Income Tax Withheld Total Resources New York State Tax Withheld Available Resources Net Income After Support Resources per child Emilie's Income Ordered Support Total Resources Monthly Support Available Resources per child David's BCSO Resources per child

48 A. Calculate Parental Income Gross IncomeSocial SecurityMedicareNYC Income Tax Child Support PaidAGIPro Rata Elizabeth$36,400.00$1,528.80$527.80$ $33, % David$39,000.00$1,638.00$452.40$848.00$0.00$36, % B. Determine BCSO 1. Income ComponentCPIPercentage Amount GeneratedPro rata shares $69, %$11, Elizabeth$4, David$6, Add-ons Child Care$0.00 Elizabeth$0.00 David$0.00 TotalElizabethDavid D. Self-Support Check Income Based$11,833.38$4,970.02$6, SSR ADJUSTMENT Add-Ons$0.00 David's AGI$36, TOTAL$11,833.38$4,970.02$6, David's BCSO$6,153.36Self-Support$14, Monthly$ Remaining Income$29,908.00Annual BCSO$ C. Resource Balancing TestAdjustment to balance resources Monthly BCSO$ David's Income After BCSO David's BCSO Federal Income Tax Withheld Total Resources New York State Tax Withheld Available Resources Net Income After Support Resources per child Emilie's Income Ordered Support Total Resources Monthly Support Available Resources per child David's BCSO Resources per child New York Calculations

ENFORCEMENT OF ORDERS Multiple Families impact enforcement of orders in three distinct areas – Withholding of Support From Income – Crediting and Distribution of funds – Sanctions for failure to comply 49

EFFECT ON INCOME WITHHOLDING Multiple Families may impact income withholding in several ways – Aggregation of orders may exceed maximum garnishment permitted by state law Disposable income defined differently in each state Each state sets its own limitation on the amount of disposable income amenable to withholding – Withholding for support may subject to a lesser percentage where the NCP Is supporting more than one family 50

EFFECT ON INCOME WITHHOLDING Where multiple income deduction orders result in a total which exceeds the maximum percentage of the NCP’s disposable income, the funds have to be allocated between all orders – Majority rule: Prorate between all orders – 3 States (Kansas, Texas and Washington): Divide the funds equally between all orders 51