States are required by federal law to review, every few years, their procedures for calculating child support. Oregon’s new regulations went into effect on January 4, 2010, and there have been some changes that will affect how the courts are likely to award support. If you are paying or receiving child support and there has been a change in the family’s economic situation, or if you are seeking support, you should be aware of these changes. Oregon courts have a record of following the regulations fairly strictly.
Child support calculations are detailed and many people will require some time and some assistance to fully understand them. Feel free to contact me, another lawyer, or your accountant if you need advice.
The most important change is that some leeway for negotiation has been given. Previously, if the parents wanted to deviate from the basic support calculation for the family, they had to convince the court to agree that the situation justified a change that would reach the agreed number. The new rules say that if the revised calculation is within 10 percent of the agreed support numbers, that’s close enough. This gives parents and lawyers more room to work.
The next significant change recognizes that many parents are required to buy health insurance for themselves before adding a child. If this happens, the parent is now permitted to deduct the entire insurance expense from their income instead of only the child’s expense. Because both parents’ adjusted incomes are still the primary factor in the calculations, this means that when the parent paying support also buys the child’s insurance, the support is likely to be reduced; on the other hand, when the parent receiving support buys the insurance, the support is likely to be increased. This should encourage parents to insure their children. The state definitely wants children insured; under the new rules, parents may be ordered to buy insurance. If one parent has access to insurance at reasonable cost, that parent will be ordered to buy it.
The provision for medical support, applicable if either parent earns more than $1,456 a month, has been modified slightly. The primary purpose of medical support is now to reimburse the other parent for premiums; so long as insurance is available, support goes to that, and if the policy goes away for some reason, cash payments are substituted. If neither parent can get private medical insurance, the support order now has to specifically state how medical expenses are going to be handled, so this is an issue that will need to be looked at in settlement or in preparing for court.
Another significant change occurs in shared custody situations. In all cases in which each parent has more than 25% of time with the children, they will receive a credit against their support obligation. The credit is calculated according to the formula:
Percent parenting time x Total basic support obligation (both parents) x 1.5
Previously, this credit did not apply in 50-50 custody situations; instead, income and expense comparisons were used, which sometimes resulted in a significant increase in support at the 50-50 point. It is now possible to negotiate 50-50 custody without risk of major changes; instead, the 25 percent mark (82 overnights per year, or, in some cases, 163 12-hour periods) is the major point to work at.
On the other hand, 50-50 custody is still a factor in calculating credits for child care costs. A parent with more than 50% custody who pays child care for children under 12 will continue to receive a credit, and the other parent a charge, but a cap ranging from $410 to $900/month, depending on age and location, has been added. The effect of this will be to encourage parents not to spend too much on child care fees; it may, however, make it difficult for caregivers to make a living without taking on more than one child.
The calculations have been changed to always include both parents, even when the income of the second parent is not known (in which case minimum wage will be assumed). This is designed to prevent single parents from being hit with excessive support charges when a child is in someone else’s (such as the state’s) custody. Also, both parents’ support figures are now calculated to enable quick changes if custody changes.
The system has always allowed each parent a minimum amount for the parent’s own expenses before being charged with support. For 2010, this minimum is $1053 a month, and will be adjusted for inflation. The minimum support award before applying the self-support figure is now set at $100 a month. Effectively, if the parent’s adjusted income is between $1054 and $1153, that parent’s obligation should be less than $100.
To simplify calculations, children between 18 and 21 attending school are now included in the family calculation instead of being separately calculated. That said, the child in school will still continue to receive direct payments.
There are also a few minor changes in how income is calculated and how some forms of income are included or excluded.
Overall, I think that in most cases, support awards are likely to be decreased by a moderate amount. On the other hand, there will be more room to negotiate, and some battles over custody and schedules are likely to be discouraged.
On a practical level, both parents’ income and expenses, and the custody schedule, remain the primary factors from which support is calculated. If you need an opinion as to potential support, you will need a full income and expense ledger. Your accountant or a lawyer can help you prepare this ledger and format it in the court’s preferred form.