~ Child Support Information ~

How does the Court Calculate Child Support?

       The California Family Code has a number of sections that specifically deal with the calculation and duration of Child Support.  Based upon specific mathematical formulas and other considerations, including those specifically set forth in Family Code § 4055, which is listed below for your review, the Court will typically utilize a Judicial Council approved computer program to calculate a child support amount, that will then be made an Order of the Court.  The programs most frequently utilized by the Court are the Dissomaster and Xspouse programs, which work much like a spreadsheet in that you input various items of information, such as the number of children involved in the case, the income of the parents, the amount of time each parent spends with the children (frequently referred to as the timeshare), childcare costs, insurance costs and other details.  Child support is based upon the Net Spendable Income (NSI) of a supporting parent, which is calculated by the support programs based upon a parties' Guideline Net Income (which first takes into consideration the income tax consequences involved in paying spousal support, if spousal support has beeen previously ordered).  Ultimately, the NSI is adjusted to take into consideration the after-tax consequences of the payment (or receipt) of child support and / or spousal support.  If it all sounds somewhat complex, it is. This amount may, depending on the "Tactics" utilized in calculating the support amount, exceed the actual support amount ordered by the Court.  A more detailed discussion of support "Tactics" can be found below.
 
       Because these programs require the manual input of information, coupled with what information gets entered into the system and in what specific way, there is significant room for error or alternate calculations.  More importantly, some attorneys will attempt to improperly manipulate the support calculation to gain an unfair advantage for their client.  Unfortunately, an error in the calculation of child support may prove to be both costly and devastating in that the Court will seldom credit a parent for an overpayment of child support based upon an incorrect support calculation.  Because of the complexity of the formulas and the programs utilized in calculating child support, it is important that you hire an attorney who not only understands how these programs work, but who also understands how the programs can be utilized to increase or decrease the proposed support amount.  Because of the importance of properly calculating child support, Don Werno has attended specialized training to learn how to properly utilize both the Dissomaster and Xspouse programs, so that you get the fairest and most intelligent result possible.
 
     There are also a number of legitimate alternate ways to utilize the information provided by the support calculation programs, called “Tactics”.  Most frequently, Tactics are utilized in conjunction with information received from your CPA or accountant, to maximize the income tax benefit that one party might receive, which may either save them money or allow them to negotiate for more or less support, depending on their unique circumstances and the “Tactics” employed in their case.  In their simplest terms, “Tactics” are strategies that can be employed for your benefit and knowing how and when to use a particular “Tactic” is beyond the grasp of some attorneys.
 

WHAT ARE DISSOMASTER TACTICS AND HOW ARE THEY USED?

       Tactics refer to various alternate calculations that can be performed by the support calculation programs.  In essence, Tactics are use to calculate support amounts based upon different what-if scenarios that can then be used as a negotiating strategy in a particular case.  For example, one Tactic allows a party to maximize savings to allow for a greater Net Spendable Income than the Guideline support calculation whould normally provide.  Currently, there are nine different tactics, plus subtactics available for use and by default, the programs use Tactic-9.  With the exception of Tactics 8 and 9, all other Tactics ignore the Guideline support calculation forumlas and calculate a result that is solely based upon the information that is entered into the calculation screen (rather than the support formula(s) set forth in the Family Code), thus relying on the parties, or their attorneys to understand the logic and purposes behind those particular calculations.
 
       Tactic 9 is used to calculate to calculate a support amount that takes into consideration the benefits of transferring dependent excemptions, if doing so will result in a tax savings.  In doing so, the support calculations evaluate all possible combinations of dependent transfers to find the transfer that minimizes the overall tax obligation.  By doing so, this Tactic maximizes the amount of money thus available for the purposes of awarding support.  Tactics 1-8 base their calculations on deductable and / or nondeductable support amounts.  Each of the Tactics takes into consideration the optimal number of income tax child dependent transfers that would provide the most optimal result.  Tactics 2-8 also allow for the use of something called "Subtracts," which can, for example, be set to limit the effect of deductable support amounts.
 
       Los Angeles County, Orange County, Riverside County and San Diego County all use the Santa Clara County guideline support forumlas.  This is a specific setting in the support calculation programs and the correct setting must be used for the specific Court where a support order is being entered.  San Bernardino County uses the Alameda County formula.  
 
       The specific language from the Dissomaster Tactics programs is as follows:
Tactic 1: User-specified payments for both deductable and nondeductable amounts.
Tactic 2: Minimize taxes, then user-specified net spendable income for Father.
Tactic-3: Minimize taxes, then user-specified net spendable income for Mother.
Tactic-4: Minimize taxes, then user-specified percentage of net spendable income to Father.
Tactic-5: Minimize taxes, then user-specified percentage of net spendable income to Mother.
Tactic-6: Minimize taxes, then user-specified percentage of increased NSI over guideline NSI to Father.
Tactic-7: Minimize taxes, then user-specified percentage of increased NSI over guideline NSI to Mother.
Tactic-8: Minimize taxes, then split combined NSI by guideline ratio.
Tactic-9: Transfer exemptions for the best combined tax savings, then calculate guideline.
 
       As you can tell, having specific training in the support calculation programs and Tactics is essential to obtaining the best possible support order.  Any mistake in the entry of a support calculation can cost you a considerable amount of money and Court's have been very reluctant to address incorrect support amounts prospectively.  For that reason and more, family law attorney Don Werno has attended specialized training to make sure his client's are completely protected.  If you would like to discuss how we can help you with your support related matters, call the Law Offices of Werno & Associates today at (714) 542-4466 and remember, consultations are always free.

 Is Child Support Tax Deductible?

       Sadly, no.  As such, the parent who is paying child support cannot take tax deduction for the payment of Court ordered child support amounts.  Conversely, the parent who receives the child support payment does not have to declare the support monies on their income taxes as that money is not considered “income” for taxation purposes.  There are, however, sophisticated strategies that can be employed to structure child support in such a way that the paty paying the support may end up with tax advantages.  The Law Offices of Werno & Associates have worked with tax professionals and our clients to develop the sophistication needed to not only understand that those advantages exist, but also to understand how they can be obtained and under what circumstances.

What happens if I owe past-due Child Support?

       It depends of whether the Department of Child Support Services (DCSS) is involved, or not.  If DCSS is not involved, the parent to whom the child support monies are owed (technically the money is owed to the child for support, but the custodial parent is the person who actually receives the monies and who has “standing” to petition the Court to take action regarding unpaid child support obligations) may do a number of things, including filing an Order to Show Cause and Affidavit for Contempt (FL-410 form).  A contempt proceeding, as the FL-410 form indicates, is “criminal in nature.  If the court finds you in contempt, the possible penalties include [a] jail sentence, community service, and fine.”  
 
       Bringing a Contempt matter can be a tricky process and frequently fails because of procedural errors made in its drafting and service.  Each missed child support payment, for example, can be charged as a separate and distinct violation of the Court’s order under the provisions of Code of Civil Procedure § 1218.5 (a), which reads, in part that:
a) If the contempt alleged is for failure to pay child, family, or spousal support, each month for which payment has not been made in full may be alleged as a separate count of contempt and punishment imposed for each count proven. …
 
       If DCSS is involved, then it will take over the responsibility for collection of support as discussed in greater detail below.
 
       The Department of Child Support Services must, by law, alert the California Franchise Tax Board whenever a parent who has been ordered to pay child support becomes more than $100.00 past due in their support payments or the payments are more than 30 days late.  The Franchise Tax Board can then take action to garnish wages and seize property in an attempt to satisfy the past due child support obligation.  The California Franchise Tax Board has expansive power to collect monies, including issuing a wage assignment order to have up to 50% of a person’s net disposable income garnished directly from their paychecks, seizing monies from a bank account, collecting rental property income, royalties and dividends, selling vacant land, confiscating the contents of a safe deposit box and even selling cars, boats and aircraft.  Any money that is seized or collected is forwarded to the Department of Child Support Services to be credited towards the debt allegedly owed by the supporting parent.  California State income tax returns can and will be seized as well.
 
       Moreover, a supporting parent may also have their federal income tax returns seized to pay a past due child support obligation, too.  Specifically, Congress authorized the Department of Treasury’s Financial Management Service to administer the “Treasury Offset Program,” which was implemented to seize or reduce any income tax returns owed to an individual to pay for various debts, including past-due child support.  In the event that there are any monies left over after payment of the alleged debt owed, the remainder will be refunded to you.
 
       There are unfortunate situations where the new spouse of a parent who owes past-due child support has their joint federal income tax return wrongfully seized.  In those cases, the new spouse can request the return of their portion of the seized income tax return by completing and submitting an Injured Spouse Allocation form to the Federal Financial Management Service agency.

Statutes Relating to Child Support

       The following statutes are only a few of the laws that directly affect child support.  These statues are listed here for your review, so that you can understand the public policy of the State of California and to gain a better understanding of how the Court makes an award of child support.  Additionally, as the laws are ever changing, it is strongly suggested that you verify that statutes found on this site are still current before making any decisions, legal or otherwise regarding your legal matter.

Family Code § 4053

       In implementing the statewide uniform guideline, the courts shall adhere to the following principles:

(a) A parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life.

(b) Both parents are mutually responsible for the support of their children.

(c) The guideline takes into account each parent’s actual income and level of responsibility for the children.

(d) Each parent should pay for the support of the children according to his or her ability.

(e) The guideline seeks to place the interests of children as the state’s top priority.

(f) Children should share in the standard of living of both parents.  Child support may therefore appropriately improve the standard of living of the custodial household to improve the lives of the children.

(g) Child support orders in cases in which both parents have high levels of responsibility for the children should reflect the increased costs of raising the children in two homes and should minimize significant disparities in the children’s living standards in the two homes.

(h) The financial needs of the children should be met through private financial resources as much as possible.

(i) It is presumed that a parent having primary physical responsibility for the children contributes a significant portion of available resources for the support of the children.

(j) The guideline seeks to encourage fair and efficient settlements of conflicts between parents and seeks to minimize the need for litigation.

(k) The guideline is intended to be presumptively correct in all cases, and only under special circumstances should child support orders fall below the child support mandated by the guideline formula.

(l) Child support orders must ensure that children actually receive fair, timely, and sufficient support reflecting the state’s high standard of living and high costs of raising children compared to other states.

Family Code § 4055

(a) The statewide uniform guideline for determining child support orders is as follows: CS = K[HN - (H)(TN)].

(b) (1)The components of the formula are as follows:

(A) CS = child support amount.

(B) K = amount of both parents’ income to be allocated for child support as set forth in paragraph (3).

(C) HN = high earner’s net monthly disposable income.

(D) H = approximate percentage of time that the high earner has or will have primary physical responsibility for the children compared to the other parent.  In cases in which parents have different time-sharing arrangements for different children, H equals the average of the approximate percentages of time the high earner parent spends with each child.

(E) TN = total net monthly disposable income of both parties.

(2) To compute net disposable income, see Section 4059.

(3) K (amount of both parents’ income allocated for child support) equals one plus H (if H is less than or equal to 50 percent) or two minus H (if H is greater than 50 percent) times the following fraction: 

 

Total Net Disposable Income Per Month K
$ 0 - 800 0.20 + TN/16,000
$ 801 - 6,666 0.25
$6,667 - 10,000 0.10 + 1,000/TN
Over $10,000 0.12 + 800/TN

       For example, if H equals 20 percent and the total monthly net disposable income of the parents is $1,000, K = (1 + 0.20) × 0.25, or 0.30.  If H equals 80 percent and the total monthly net disposable income of the parents is $1,000, K = (2 -- 0.80) × 0.25, or 0.30.

(4) For more than one child, multiply CS by:

 

Number of Children Multiple
2 1.6
3 2
4 2.3
5 2.5
6 2.625
7 2.75
8 2.813
9 2.844
10 2.86

(5) If the amount calculated under the formula results in a positive number, the higher earner shall pay that amount to the lower earner.  If the amount calculated under the formula results in a negative number, the lower earner shall pay the absolute value of that amount to the higher earner.

(6) In any default proceeding where proof is by affidavit pursuant to Section 2336, or in any proceeding for child support in which a party fails to appear after being duly noticed, H shall be set at zero in the formula if the noncustodial parent is the higher earner or at 100 if the custodial parent is the higher earner, where there is no evidence presented demonstrating the percentage of time that the noncustodial parent has primary physical responsibility for the children.  H shall not be set as described above if the moving party in a default proceeding is the noncustodial parent or if the party who fails to appear after being duly noticed is the custodial parent.  A statement by the party who is not in default as to the percentage of time that the noncustodial parent has primary physical responsibility for the children shall be deemed sufficient evidence.

(7) In all cases in which the net disposable income per month of the obligor is less than one thousand dollars ($1,000), there shall be a rebuttable presumption that the obligor is entitled to a low-income adjustment.  The presumption may be rebutted by evidence showing that the application of the low-income adjustment would be unjust and inappropriate in the particular case.  In determining whether the presumption is rebutted, the court shall consider the principles provided in Section 4053, and the impact of the contemplated adjustment on the respective net incomes of the obligor and the obligee.  The low-income adjustment shall reduce the child support amount otherwise determined under this section by an amount that is no greater than the amount calculated by multiplying the child support amount otherwise determined under this section by a fraction, the numerator of which is 1,000 minus the obligor’s net disposable income per month, and the denominator of which is 1,000.

(8) Unless the court orders otherwise, the order for child support shall allocate the support amount so that the amount of support for the youngest child is the amount of support for one child, and the amount for the next youngest child is the difference between that amount and the amount for two children, with similar allocations for additional children.  However, this paragraph does not apply to cases in which there are different time-sharing arrangements for different children or where the court determines that the allocation would be inappropriate in the particular case.

(c) If a court uses a computer to calculate the child support order, the computer program shall not automatically default affirmatively or negatively on whether a low-income adjustment is to be applied. If the low-income adjustment is applied, the computer program shall not provide the amount of the low-income adjustment. Instead, the computer program shall ask the user whether or not to apply the low-income adjustment, and if answered affirmatively, the computer program shall provide the range of the adjustment permitted by paragraph (7) of subdivision (b).

The Department of Child Support Services

       According to their website, the Department of Child Support Services, “works with parents - custodial and noncustodial - and guardians to ensure children and families receive court-ordered financial and medical support. Child support services are available to the general public through a network of 52 county and regional child support agencies”.  If you are having difficulty obtaining Court ordered child support, DCSS can help.  If DCSS is garnishing your wages for a support obligation, we can help.

       In reality, DCSS is like a pit bull.  If you are owed child support and have a valid Court Order, DCSS can and will take over the collection of your case, especially if you are receiving government support of some kind.  There is a lengthy package that must be completed to get the DCSS ball rolling, setting forth the amounts that you are owed per the Court Order and the amounts that you have paid, if any.  This document must be completed carefully and can be quite daunting, given that it seems like pages and pages and pages of information, including a detailed accounting, signed under penalty of perjury.  A simple mistake made in the accounting can prove costly down the road.

       Once a case has been assigned to DCSS, the original Court no longer has jurisdiction and cannot make any further Court Orders that pertain, in any way, to child support. All child support issues must be handled by a Title IV-D Court (DCSS Court) as long as DCSS has jurisdiction.

       DCSS has powerful enforcement tools to try and make parents pay their child support obligations.  First, all past due child support amounts earn interest at a rate of 10% per year, which means that if an amount is not paid for seven (7) years, it will double in value; thus $1.00 owed will become $2.00 owed!  Next, DCSS has the legal authority under California Family Code § 17520 to suspend a driver’s license, professional license (license to practice medicine, law, accounting) and to even refuse to issue or renew a passport. Specifically, the Department of State, under the provisions of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which is codified at 22 CFR 51.70(a) (8) will refuse to issue a passport if the child support arrearage amount exceeds $2,500.00.  In short, DCSS has powerful tools that can be used for or against you in a Court of Law.

      The bad news is that once DCSS is on the case, a highly inefficient government agency is involved.  It is difficult and at times impossible to contact anyone at DCSS to have even simple questions answered.  Worse, if DCSS gets the accounting information incorrect or wrongfully tries to suspend your license, you will most likely have to file legal documents and go to Court to stop them or fix the problem.  In our experience DCSS is a best case, worst case scenario.  In all cases, however, we have the knowledge and experience to help you navigate the troubled waters of DCSS.

If my Ex Files for Bankruptcy will that affect Child Support?

       Typically, if a party files for bankruptcy, it will have no effect on their ongoing child support obligation. There are, however, two exceptions.

1) Where, for some reason, the child support debt (i.e. a domestic support obligation) has been assigned to a third-party, whether voluntarily, or because of some legal requirement.  See 11 United States Code § 523 (a)(5)(B) – Exceptions to Discharge;

2) Where the child support debt, despite being specifically designated as child support, is in fact not for child support.  In these types of situations, a Judge can look to the true nature of the debt, rather than at the label that the parties placed upon the obligation.  See In Re Marriage of Clements (1982) 134 Cal.App.737.  

       In fact, the Court in Clements specifically stated that “a discharge in bankruptcy shall release a bankrupt from all provable debts except debts due ‘to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child ....’ [1] An order in a decree of dissolution that a spouse pay certain community debts may be either in the nature of alimony or support, not dischargeable in bankruptcy, or in the nature of a property settlement, which is dischargeable in bankruptcy under present law.”  Emphasis added.

       As such, even though there is an automatic stay on the collection of debts following the filing of a Bankruptcy petition, when it comes to child or support, the automatic stay will have no legal effect as child support debts are generally not dischargeable in bankruptcy, except in certain specific cases.

      When it comes to specific questions regarding Bankruptcy and how it may affect your case and your life, we strongly suppest that you contact a licensed attorney who specializes in Bankruptcy law, which is not our particular forte.

 


        If you would like assistance with your divorce or legal matter, you can always call the Law Offices of Werno & Associates to discuss how we can help you.  Our phone number is (714) 542-4466 and consultations are always free.

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