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Divorce & Family Law This forum is for discussing any of the legal issues involved in your divorce.

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Old 09-14-2009, 02:57 PM
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Default When Do You Calculate Child Support Based On Average of Last 3 Years?

Does anyone know in what circumstance it is best to calculate child support based on the average of the previous 3 taxation years?

According to the guidelines (which I read a while back, now I cannot find a working link) I recall it being when the yearly incomes are inconsistant.

Would this apply to a year when the payor had lost his job and was unemployed for half the year? (Yet continued to pay support in the previously ordered amount based on his previous year's income.)

I guess what I'm asking is... which way is the "correct" or "right" way to calculate:

1. Calculate support based on the previous year's total income, despite the drastically reduced income due to unemployment; or
2. Calculate support based on the average income of the previous 3 taxation years (2 years fully-employed and 1 year part-time employed due to unemployment).

Any thoughts? Any knowledge on links or resources where I could find this information?

Thank you kindly in advance.
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Old 09-14-2009, 04:44 PM
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(sorry for the acronyms... NCP = Non custodial parent, the payor paying CS (child support).....CP = Custodial parent, the payee receiving CS)

Both methods are fair in a situation where the CS is adjusted yearly (based on previous year, or 3 year average) and the CS is for a long period of time - by fair I mean that the payor pays according to their actual income over time, which is what the tables are all about.

I think I prefer adjusting based on previous year income only, though this can result in more volatile changes in CS, it more closely matches the actual volatility of the parent paying CS. Also if the child were living with that parent, they would exeperience that volatility without delay.

In the case of an extreme change in income, becoming unemployed for example, the CS payee has a year to prepare for the change (aka save/reduce spending), where as the CS payor, probably had no time to plan for the change. So in the this case it must be emphasized that the payor plans for such volatility by having access to savings or credit in the case when CS payments have yet to catch up with the new reduced income level.

These are just my thoughts, and not based on CS guideline readings etc.

As a side note, if the NCP (the payor of CS), has no income, or insufficient income to live on and draws from other sources such as loans/gifts/savings etc, then it does not seem fair that they pay CS strictly according to their income, as they are finding money to support themselves, so they need to share that with their kids.

As a further thought, maybe it would be fair if someone used a loan to supplement their income while under employed, that loan should be treated as income for the purpose of calculating CS. Subsequently, paying off that loan should be removed from income for the purpose of calculating CS. Gifts should be considered as income for the purpose of calculating CS also. This may be too complicated to watchdog or implement, but it seems to me this would solve the problem of calculating CS when someone is underemployed or unemployed temporarily and supplementing their income in some other way.

Alternatively it may be fair for the under/unemployed situation to base CS on actual income (adjust yearly as mentioned in the original post) and allow the CP (the payee), to handle the volatility of the CS, even to the point of no CS coming in for a time (if the NCP was unemployed for a whole year). This would avoid getting into the NCP business with respect to how they handle their unemployment, and in the end all CS is based on actual income, which is utimately the goal. Gifts though should always be considered as income, and of course all parents should be as gainfully employed as possible at all times to the best of their abilities.

Last edited by billm; 09-14-2009 at 04:54 PM.
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Old 09-14-2009, 07:09 PM
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Thank you Bill. I appreciate your response.

What you write makes PERFECT sense. It is the fairness that my husband and I are striving for, yet are failing to achieve... even in court.

According to the Department of Justice, "if your income changes a lot from year to year, you can look at your income over the last three years to calculate your average annual income for the guidelines if that would most closely reflect your actual income."

The thing is, my husband's income doesn't "change a lot from year to year." Only THIS year, has there been a change, and a drastic one, to say the least. Yet, he is neither voluntarily unemployed or underemployed. Many people have experienced job loss over the past year thanks to the October '08 market crash and recession. Why penalize these people... these parents... further? KWIM?

Unfortunately, in our situation it goes like this: Dad - the CS payor - wants to provide his fair contribution without going into debt; while Mom - the CS recipient - wants as much money as she can possibly get, without regard of the financial difficulties it causes Dad. And from our experiences in mediation, meetings with lawyers, and court... Mom always wins and Dad always pays.

FYI - My husband and I have been keeping track of his child support payments... what he has been paying, and what he should have been paying according to the guidelines and tables. So far, he has overpaid by more than $6,000. Yet when this gets brought up in court, judges shrug and call it "a gift." Go figure! It's as if he walks around with a giant sign on his back that reads "CS Guidelines don't apply to me! Go ahead and take every penny!" Heck, if it weren't for me... he'd probably be living in a box on the street - and what's frightening is that such an outcome is not that uncommon!

Is it not in the child's best interest to have a Father that is able to support himself (and his children) financially... a Father who can provide them with a safe and welcoming home... a Father who does not have to work 24/7 in order to maintain a semi-acceptable standard of living so that his children don't get taken away from him?

*SIGH* Please don't think I'm bitter, because I'm not. I'm just ashamed of our "justice system" when it comes to Family Law.
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Old 09-14-2009, 07:27 PM
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I think most Family Court judges (if it even gets to that) will look at CS obligations of the NCP based on their previous year's income. This usually applies to self employed NCP whose incomes may vary considerably from one year to the next. Taking an average of the last 3 years can make CS payments overshoot or undershoot the correct amount.
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Old 09-14-2009, 07:39 PM
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Quote:
Originally Posted by Stargate View Post
I think most Family Court judges (if it even gets to that) will look at CS obligations of the NCP based on their previous year's income. This usually applies to self employed NCP whose incomes may vary considerably from one year to the next. Taking an average of the last 3 years can make CS payments overshoot or undershoot the correct amount.
It is important to distinguish between establishing CS amounts that will not be changed (unless there is a significant change in circumstances and you go back and fight it out in court etc), or establishing CS and adjusting it annually (with whatever formula you like - previous years income, average of 3 years, it does not really matter).

If you are trying to establish CS amount that will not change, then a 3 year method makes more sense.

In my opinion establishing CS that is not autmatically adjusted each year based on actual tax returns (or whatever formula one agrees to), make no sense at all. This is always unfair to the NCP or CP as income always varies eventually. One might argue that the NCP will simply manipulate their tax returns to minimize CS, but if they do that, then you take them to court and come up with a different solution. To fix the amounts for that reason makes no sense as it screws the rest of us who simply want to pay/receive CS relative to what we/they actually earn - no arguments, no lawyers, nothing to fight about.
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Old 09-14-2009, 07:43 PM
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Quote:
Originally Posted by Stargate View Post
I think most Family Court judges (if it even gets to that) will look at CS obligations of the NCP based on their previous year's income.
If only this were true! We've been to court 3 times for child support purposes. Each and every time, the "previous year's income" was overlooked because my husband got "a new job that pays more" and so his CS was based on his higher current income instead of his previous year's income. Then the following year, when we went to change it to an amount based on the previous taxation year's income (the "higher, current income" from the previous court date), it was the same case again... "but his annual salary at this job is $40,000 and his total income from last year is only $36,000" ...and so his child support was once again based on his "higher current income." Oh, and let's not forget when my husband lost his "higher current income" job and went for a reduction... and the judge ordered that he continue paying the same amount because "he is only unemployed for 3 months, so he could possibly find a job tomorrow." And let's not forget the legal costs he was ordered to pay for bringing a motion for a reduction... "prematurely!" I'm sorry, but that just isn't fair. Putting a paying father into debt is not in the child's best interest... especially while good ol' mom is taking the child to Disney every year, buying herself new luxury vehicles, and taking island vacations with friends while the child is on holidays with us... meanwhile, we count pennies to see if we can afford the gas and admission to the zoo. :-S
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Old 09-14-2009, 09:24 PM
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Quote:
Originally Posted by #1StepMom View Post
I... meanwhile, we count pennies to see if we can afford the gas and admission to the zoo. :-S
there with you, upcoming motion to reduce CS retro to when not receiving income. Hoping for the best, knowing the worst will happen..gas to get to work...using points for groceries and the generosity of family of friends
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Old 09-15-2009, 07:30 AM
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Believe it or not...

We asked the support recipient what, in her opinion, is the best and fairest way of calculating child support on an ongoing basis.

(We asked this because she has opposed every proposal we have offered in accordance with the guidelines. We know that she wants to calculate support in whichever way will get her the most money, without regard to guidelines and maintaining the same calculation practice year-to-year. So, we decided to put the onus on her.)

Her response: Find and maintain a full time job.

How does this answer the question? It doesn't. So we asked her again to answer the question.

Meanwhile, she's demanding to know about upcoming child support payments. Ha! If she wants that information... she'll need to answer the question first!

This shall be interesting.
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Old 09-15-2009, 07:53 AM
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Ha ha ha... her response: Child support should be based on your household income until you are able to find and maintain a job.

Seriously?!
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Old 09-15-2009, 07:58 AM
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I still think she is trying to make a case for your income... crazy.... be careful
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