When unmarried parents no longer choose to live together or married parents divorce, a key question arises, “How will we financially support our children?” Options range from assigning specific expenses to each parent, paying child-related expenses out of a joint account, or transferring money from one parent’s household to the other. The last is most commonly labeled child support.
What is child support?
Court-ordered child support focuses primarily on the “core” expenses for children age 19 and under—i.e. the expenses necessary and incident to the care of children. These include food, clothing, shelter, school, and transportation expenses. Other expenses (such as sports activities, cell phones, or cars) fall outside child support.
The amount of child support is determined through a somewhat complicated mathematical algorithm. The algorithm calculates the average amount of money parents at a certain income level with a certain number of children spend to cover the basic needs of their children.
How does the calculation work?
In establishing child support, the algorithm takes the weekly gross income of each parent and the number of children to establish what is known as the basic child support obligation. This basic obligation defines what these parents would likely spend to provide the core needs of their children.
Gross income includes all the types of income listed in Guideline 3 of the Indiana Child Support Guidelines. This includes but is not limited to actual income earned, bonuses, commissions, employer-provided benefits (such as a car), overtime, and many other forms of income. Gross income can also include potential income or in-kind gifts routinely received by one or both parents.
Added into the calculation of the basic obligation are the actual amounts parents spend for the children’s portion of the health insurance premium and for work-related childcare. Because these amounts vary so greatly between families, actual numbers must be provided to create the basic support obligation. The basic support obligation is then split between the parents based on their percentage of income.
Example:
Father makes $6,000.00 weekly gross income
Mother makes $4,000.00 in weekly gross income
They have 2 children under 19 years of age
Father cares for the children 179 nights per year/Mother cares for the children 186 nights per year
Father pays $50.00 per week in health insurance premiums for the children.
Based on traditional guidelines, the basic child support obligation for this family would be $1,054.00 per week. Father would be responsible for 60% ($632.40) and Mother for 40% ($421.60) of this amount. Father would receive a “credit” toward his 60% for the health insurance payment he is making.
Because Mother has the children with her a few more nights than Father, Father needs to transfer to her household money to make up the difference between what she directly pays and what she needs to fully provide for children while in her care. The algorithm states this amount to be $206.00 per week from Father to Mother. That is what he would pay in “child support.”
Common error
Some parents who make child support payments believe that, because they are writing a check to the other parent, the other parent must now buy all the clothing or pay for all the school expenses. This is not the case.
Each parent must provide the basic expenses for the children while children are in their care. So, even if Mom pays Dad child support, Mom will still directly provide clothing and food while at her house.
How does child support “keep up” with changes?
Parents who use child support may adjust the amounts as life circumstances change. Couples can agree to a change any time they consider a change needed. For a court to order a change, the person requesting the change must demonstrate to the judge that there has been a “substantial and continuing” change in the financial condition of the parents. These can include significant increases or decreases in gross income, changes in the number of nights each parent cares for children, or changes in childcare or health insurance costs.
If parents agree on changes in child support, they merely need to contact their mediator or attorney to file an “agreed entry” detailing the reason for the change and the agreed amount. IMPORTANT—no changes in payment should occur UNTIL the judge has signed an order adopting the new amount.
New figures coming
The algorithm in Indiana was recently updated to reflect changes in the costs of providing for children. New child support amounts will be reflected in calculations after January 1, 2024.
The contents of this article are intended for information only. Please consult a professional for advice on your situation. If you would like more information on child support—or other options for financially providing for children in paternity or divorce—we would be happy to answer your questions. Please call 317-793-0825 or email info@ResolutionMediationIN.com. We look forward to serving you.
