Michael looked at me with a stunned glare. I re-ran the child support calculations again. After some (but not all) of his taxes were considered, the calculator showed the same number, 25% of his income for child support. “I knew I was going to pay; I just didn’t know it was going to be that much!”
Primary bread-winners repeat after me: you agreed to pay the bills during the marriage and you are stuck paying after the divorce.
Many times, the amount isn’t unfair, but rather the fact that you are forced to pay an ex-spouse (who probably gave you some emotional scars). And, on top of that, you have no ability to control how that money is spent (or if that money is even spent on the child — or her endless shoe collection).
But, what does it cost to raise a child? In 2015, the US Department of Agriculture reported that the cost from birth to age 18 was $234,900.00. The figure was in terms of two middle-income parents (earning between $59,410 and $102,870 a year) raising a child in a two-child family. See Expenditures on Children by Families report.
Odds are high that the number is only going up. The report suggests that the largest expenditure is housing (about $70,560 or 30% of the total cost). The other expenses breakdown into childcare and education (18%), food (16%), transportation (14%), healthcare (8%), clothing (6%), and miscellaneous (8%).
In New York—as in a few other states—there is a child support statute that includes payment “guidelines.” The payor will pay roughly 17% of their income for one child. If you are earning $76,800 a year, that puts you at a child support obligation of $13,056 annually ($1,088/month). This number is fairly consistent with the federal number that you will pay $234,900.00 annually to age 18 (or $1,087.50/month) for one child.
Of course New York differs from other states because our incomes are generally higher, but child support runs three years longer here (until the kid is 21 years old). Those factors may equal out. Other states may have far more flexible child support schemes that actually require the payor to pay less than the federal average.
Perhaps then, this is money you were going to spend on the child anyway, it just wasn’t as “in your face” as writing a check to your ex-spouse?
The reasoning behind paying is also fair: childcare is expensive and child-rearing is tedious.
The math is fair. The logic is sound. But the practical application still causes you grief. You are writing a check to someone and you have no ability to control how the money is spent or if it is even spent on your child — the most common complaint I hear about the child support laws. And, if you fail to meet the obligation to pay, you face possible jail time as a sanction.
But back to my client “Michael,” sitting in my office. The good news was that his children were older, limiting the number of years he was facing. The bad news? “What about joint custody? If we share the kids equally, then I don’t pay right?” Wrong. In New York, as in several other states, the law spells out that even in equal-time parenting situation, the “monied-spouse” still pays.
Of course, an equal time-split may be a factor for a support magistrate to consider deviating from the state’s child support guidelines, but some magistrates are hard to convince. Maybe magistrates get a little jaded, after all no one walks into a child support hearing and says “Judge, I make plenty of money — hit me with as much as you can!”
Still, having greater time with the children and a lower child support payment might help equalize that feeling that you are paying with no control — after all, time with the kids is priceless.
What do you think? Are there any creative solutions to reconcile how the law is applied in real terms?
8 thoughts on “Child-Support: Fair or Fail?”
My issue with this is that post divorce, the more monied-spouse is still contributing via child support to the ex-spouses net worth. Especially in the realm of housing, the payor is contributing to the equity of the underlying asset at which time in the future the less monied spouse can sale for a net gain of which most of the housing contribution( via child support) is tax free.. especially in equal time spilt. the expenses on both side is relatively equal but one ex-spouse benefits from the payments.
Are you saying that the ex-spouse can use the child support for a mortgage, which is ultimately a win for her?
correct, I am not saying all of it but the portion of the child support (the amount allocated for housing needs) for the child. It essentially allows the ex-spouse to increase the underlying net asset such as pay down the mortgage with tax free money from the payor. It is especially unfair in equal time split, it is one thing to pay expenses pro rata based on respective incomes. It is totally another thing when the payor ex-spouse is contributing to the mortgage i.e. increasing the equity for the other spouse to benefit at a later time. This is assuming the Payor spouse does not have a financial interest in the asset that he/she would be able to recoup at a later time, because the payee spouse benefits from the draw down of the loan which ultimately a benefit to the payee spouse.
I can see why that would feel very unfair, but at the end of the day, doesn’t it benefit the child to have a stable home (even if the lower-earning spouse getting support will ultimately benefit from it)? If she’s buying it, won’t the child have the benefit of being in a community where other people are also buying (and studies show a child’s grades can greatly hinge on their peers). The basic support is aimed at housing the child for the most part. Would it feel any better if she is not paying a mortgage but wasting the money on shoes? (probably not).
Another thought: if she pays off the house, won’t the child one day inherit it?
I understand the concept of “for the benefit of the child”. At end of the day, the payee does benefit on the draw down plus most likely a market appreciation of the asset. If you think about it, the payee is getting a tax free draw down and at time of sale the personal home sale exemption. That is of significant value.
As for the inheritance- the problem with that is, we do not know. In the ideal world-yes. There are many cases where one parent chooses for whatever reason not bequest an asset to their children i.e donate to charity, seizure of the asset against a debt, sells the asset and uses the funds for personal purpose or god forbid the child dies. The payee spouse can remarry or have another child and then the asset has the possibility of going outside the legacy.
Here’s another thought: the payee spouse must have acquired the home in some sort of Equitable Distribution trade under your scenario if she needs the child support money to pay the mortgage, chances are that she wouldn’t have qualified for that mortgage on her own (or maybe the mortgage is a result of the refinance to buy-out the other spouse). Hopefully the support factored in to the buy-out (or it should have been considered as a draw down as you suggest by the payor and his lawyer when negotiating the buy-out).
I agree. for it to be truly fair, the draw down needs to be taken into consideration and credit needs to be given to the payor. but even it is not, the basic child support does include ‘cost of housing’ which contributes to the payee’s appreciation of the asset.