There is no doubt that when facing a divorce, the hardest issues often revolve around your children. How will they handle the transition between homes? How will they handle not seeing one parent half of the time? And, of course, one of the most anxiety-filled issues: how will I afford everything my child needs without my spouse’s income?
I am here to provide you with some background on Child Support in California and what you can expect when beginning these conversations.
How is Child Support Decided? What Factors are Looked At?
When the conversation about child support starts, you will be asked to supply the following information:
- Your income from all sources (see more on this below). This is typically in the form of paystubs and tax returns. However, if you are self-employed or work as an independent contractor, you will be asked for additional information to determine what your monthly income truly is.
- The number of children the parties have.
- The amount of time each child spends at each parent’s household. Over time, we have started to see not only two households where the children spend time, but sometimes there are three households. This is consistent with a newer law in California, Family Code section 3040, signed into law by SB 274. This new law states that a child in California can legally have three parents. If it sounds complex, that is because it certainly can be. This law takes into account when there is a stepparent or a grandparent who has been a significant part of the child’s life and the court looks at what would be in the “best interest of the child” to best promote the health, safety, and welfare of a child.
- Who is paying health insurance for the child(ren) and how much does that cost?
- In mediation, we will also look at the health insurance cost of the other parent, because it is a necessary expense for both parties. Unlike a voluntary retirement account (which, arguably could be considered mandatory and in some cases, it is, but since CA law requires everyone to have health insurance or pay a penalty, it seems reasonable to look at both parties’ health insurance costs).
- Any (actual) mandatory deductions from your wages. This is true of most teachers (CalSTRS), other district employees (CalPERS), Lifeguards, Police, Firemen, County Employees, etc. We will discuss the difference between mandatory and voluntary deductions.
- Other allowable deductions (Union Dues, Extraordinary health-related expenses, Uninsured catastrophic losses, job-related expenses, responsibility to support other children or a previous spouse, and possibly others that are discussed as they surface).
- Tax filing status (head of household, joint, single, etc.)
- The number of exemptions included in your next tax filing.
What is Child Support Supposed to Cover?
To put it in very simple terms, Child support covers only ordinary living expenses for a child. It does not include childcare, medical bills not paid by insurance, travel expenses for visitation with the noncustodial parent, or a child’s special education needs. Parents must specifically ask the judge to include these additional expenses in the child support order. If they do not, the costs may be divided so each parent pays 50 percent.
This also helps to explain why the payor parent is also required to contribute to other costs of the kids’ monthly expenses even if they are paying support. Support covers regular, everyday costs. Any “extras” should be split 50/50.
We Share the Time Equally – Why Am I Paying Support?
The court looks to provide the same standard of living to the children in each household. Therefore, if one party earns $100k per year and the other parent earns $50k per year and the parties are sharing equal time with their children 50/50, there is still a need to equalize the income between the households to provide the same quality of life to the kids. Rather than have the children in one house with $100k in income and in another house with only $50k in income, the courts will reconcile the income, so each household has $75k in income to make ends meet.
Why Aren’t We Splitting the Cost of Health Insurance for the Kids Equally? But we do Split the Cost of Other Things Equally?
We are often asked why the parties aren’t splitting the cost of health insurance 50/50 like they are splitting daycare. This is because the cost of health insurance is typically a pre-tax expense.
For example, say that dad is paying $500 per month to cover himself and the children on his health insurance. First, the $500 paid per month is paid prior to dad paying his taxes (a pre-tax deduction). After taxes are paid, the actual dollar amount the $500 cost dad may be closer to $300. However, the parties do not then split the $300 50/50 because the cost dad pays for the health insurance premiums is incorporated into the guideline child support calculation. It makes sense to include something like a monthly health insurance deduction as opposed to daycare or camps because the health care deduction will not vary over the year (it will only change 1 time per year). Childcare or extra-curricular activities can vary by season, by month, etc. To decrease the number of times you need to come back and reassess monthly support, it is easier to split those costs 50/50.
Also, childcare, summer camps, and extra-curricular activities are not pre-tax deductions (like health insurance is.) The costs are split 50/50, even if one parent earns more, due to the goal of using child support to equalize the party’s income. Making a 50/50 split of out-of-pocket costs a reasonable division.
Is there a Specific Formula for Child Support in California?
Yes, there is. If you are interested in seeing how your support is calculated pursuant to the formula, please ask us for your support “audit.” This will provide you with a detailed step-by-step breakdown of how the formula has applied to you and your co-parents’ specific circumstances. The formula used is below:
The guideline formula for computing child support is stated algebraically (Ca Fam § 4055(a)): CS = K [HN -(H%) (TN)] where . . .
CS = child support amount;
K = amount of income to be allocated for child support as set forth in Ca Fam § 4055(b)(3);
HN = high earner’s net monthly disposable income;
H% = approximate percentage of time the high earner has or will have primary physical responsibility for the children compared to the other parent (where the parents have different time-sharing arrangements for different children, H% equals the average of the approximate percentages of time the high earner spends with each child);
TN = total net monthly disposable income of both parties. [See Ca Fam § 4055(b)(1)]
How Does the Court Determine Income Available for Child Support?
Income is money from sources including self-employment, job wages, savings accounts, unemployment money, disability and worker’s compensation, and Social Security. The judge may consider the amount of money the parent could be making, instead of the parent’s actual income.
Net income is calculated by taking a person’s total income and subtracting certain expenses, such as federal and state income taxes, health insurance premiums, state disability insurance, and Social Security taxes. The judge may also consider other expenses, including the cost of raising a child from another relationship, exceptional health care expenses, uninsured catastrophic losses, mandatory union dues, or retirement contributions.
Once each parent’s net income is calculated, the child support guideline is used to determine the percentage of net income to be paid as child support. The example below is a general guideline for calculating child support. The final amount of child support is carefully determined based on individual case information.
There are clearly many other factors that will be discussed when we sit down to put together your parenting plan. The above is an attempt to help you understand some of the basic questions we are often asked as we begin the conversation of child support. Child support is handled very differently than spousal support and if you would like to learn more about how spousal support is calculated, check out this blog.
When you go through mediation with us, we will accurately calculate child support and help you and your co-parent establish how other expenses will be paid. We will strive to predict possible future expenses and put guidelines in place so you and your co-parent will have a plan to resolve issues or conflicts as they arise.