I am what one of my senior partners affectionately refers to as a “baby lawyer,” with just 10 months of practice since I graduated from law school. As a new family lawyer, I find myself in a unique position regarding child support law. I have had just enough exposure to the old child support law to be familiar with it, but I am not so attached to it that I have an aversion to learning a new way of understanding child support.
None of us really knows yet what implications the new law will have on, say, whether there will be less litigation over custody labels, now that they do not matter in regards to calculation of child support, or how much more complicated cases will ultimately be because spousal maintenance must now be determined before child support is calculated. This is an entirely new system, and to a large extent we must all learn it together. The purpose of this article is to provide a clear, accurate overview of Minn. Stat. Chapter 518A, describing the major changes in Minnesota’s child support law.
First, however, this context. In 2005, the Legislature passed a bill that overhauled the way child support is calculated in Minnesota. After some fine-tuning of the law in 2006, the provisions related to the calculation of child support were then recodified as Minn. Stat. Chapter 518A. The law went into effect for new cases on Jan. 1, 2007. The most significant conceptual change is that rather than considering only one parent’s income when calculating child support, both parents’ income is taken into account. While this income-shares formula is new to Minnesota, the majority of states have used it for years.
According to the chief author of the original bill, Sen. Thomas Neuville, the primary goal of the new law is to create a more fair and equitable child support guideline.1 The shift to the income-shares approach is the most visible way in which the new law attempts to appear more fair. A second goal of the new law is to increase compliance with child support orders. As Neuville explained, the underlying idea is that compliance with child support orders will increase if child support obligors feel that an order was calculated in a fair and even-handed manner. The new law also incorporates current U.S. Department of Agriculture economic data of the actual costs to raise children in the state of Minnesota.
Neuville also described a third goal of the law: to provide recognition that both parents incur expenses for the child when the child is in his or her care, which is accomplished by factoring a “parenting expense adjustment” into the child support calculation. Other stated goals of the law include simplifying the calculation of child support and providing greater flexibility in setting child support orders. Overall, the new law seeks to reflect the reality of today’s family circumstances.
The first thing you will notice about Chapter 518A is that its provisions are organized neatly into sections. For example, no longer will you have to search for the child support enforcement provisions scattered through various sections of the law, as they are now contained in Sections 518A.64 through 518A.75.
Application, Timing, and Procedure
The new statute applies to motions and actions involving the calculation of child support filed after Jan. 1, 2007. This includes motions or actions for past support or reimbursement. Thus, if a child support action filed after Jan. 1, 2007, includes a claim for two years of past support, the amount of past support due will be calculated under the new child support guidelines. Further, because the new law calculates child support based on both parents’ income, the Hortis-Valento formula2 currently used in joint custody situations is no longer needed.
Procedurally, a new document is required in all proceedings involving child support. A financial affidavit is required to be served on the other party and filed with the court with the first pleadings submitted by a party.3 A financial affidavit form, as well as other forms related to determining, collecting, or enforcing child support, can be obtained from the child support section of the Department of Human Services’ Web site: http://www.dhs.state.mn.us/ .
From Basic Support to Child Support and In Between
There are other important changes to the way child support is calculated besides considering both parents’ income. All new child support orders are required to include three separate support amounts that comprise the total of “child support”: (1) basic support, (2) child care support, and (3) health care support.4 Basic support (what used to be known as “child support”) includes housing, food, clothing, transportation, and education costs, and other expenses related to a child’s care. One of the other significant changes to the calculation of child support is that the parents’ gross income, rather than net income, is used to determine basic support obligation. This means that parties and their lawyers will no longer have to argue over what tax table to use, or how many tax exemptions a parent takes to arrive at a parent’s net income. They do not even have to argue about what constitutes a reasonable percentage of income deducted from gross income for contributions to retirement plans, as the new statute no longer allows such deductions.5
However, new complications have been added to what at first glance appears to be a simple determination. Gross income as defined in the statute includes spousal maintenance. Thus, during dissolution proceedings, spousal maintenance must be determined first, before child support can be accurately calculated. Additionally, gross income includes “potential income,” which replaces the concept of imputed income. Under the new statute:
If a parent is voluntarily unemployed, underemployed, or employed on a less than full-time basis, or there is no direct evidence of any income, child support must be calculated based on a determination of potential income and it is rebuttably presumed that a parent can be gainfully employed on a full-time basis.6
This even applies to parents who stay at home to care for children. In other words, there is now a presumption in the law that all parents should work. However, the statute provides factors the court may consider when determining whether the stay-at-home parent is voluntarily unemployed or underemployed, such as what the parenting and child care arrangements were before the child support action, the stay-at-home parent’s employment history and earnings history, the availability of jobs for someone with the parent’s qualifications, the child’s age and health, and the availability of child care providers.
Another change to the definition of gross income is that there is now a completely separate provision for income received from self-employment or operation of a business.7 Whether this simplifies or complicates matters, remains to be seen.
Calculating Basic Support
Once the gross income of each parent is established, the parents are given a credit for any “nonjoint” children. A nonjoint child is a child of one, but not both, of the parties. To receive the credit, the child must live in the parent’s household and the parent must have a legal responsibility to provide for the child. The parent must not pay child support for the nonjoint child. Stepchildren are not considered nonjoint children.8 The deduction for a nonjoint child is subtracted from the parent’s gross income to arrive at each parent’s parental income for determining child support or PICS.9 The parents’ individual PICS amounts are added together to determine combined PICS. The combined PICS figure is then applied to the basic support guidelines in Minn. Stat. § 518A.35, subd. 2, to arrive at a basic support figure. In the example in the sidebar, the combined PICS is $4,450. For two children, this combined PICS results in a combined basic support obligation of $1,175.
The next step in the calculation process is to divide each parent’s individual PICS figure by the combined PICS figure to arrive at their percentage share of the combined PICS. The percentage share of combined PICS is important as it is then used to calculate how much each parent shall contribute to child care support and medical support. In the example in the sidebar, Parent 1 has a PICS of $3,200 and this is divided by the combined PICS of $4,450, to arrive at 72 percent. The percentage is then multiplied by the combined basic support obligation of $1,175 to arrive at the pro rata basic support obligation, which in the example is $846 for Parent 1 and $329 for Parent 2.
Finally, a “parenting expense adjustment” is then applied based on the percentage range of parenting time the obligor parent has with the children.10 This adjustment is intended to reflect a presumption that while exercising parenting time, a parent is responsible for and incurs actual costs of caring for the child. If parenting time is less than 10 percent, no adjustment is made to the pro rata basic support obligation.11 If parenting time falls between 10 and 45 percent, then the obligor parent’s pro rata support obligation is multiplied by 12 percent and the resulting number is subtracted from the pro rata support figure. When a parent has parenting time between 45.1 and 50 percent of the time, it is presumed that time is equal and basic support is calculated accordingly, in a somewhat different fashion.12
In the sidebar example, Parent 1 has parenting time 40 percent of the time, and Parent 2 has parenting time 60 percent of the time. Parent 1’s, pro rata support figure of $846 is multiplied by 12 percent to arrive at $101.52. This figure is then subtracted from Parent 1’s pro rata figure, resulting in a basic support obligation of $744.
After determining the above support amounts, other factors may increase or decrease the resulting figures. For example, if one parent receives Social Security or veteran’s benefits on behalf of the child, then that amount is subtracted from the other parent’s child support obligation.13 If the parent or parents cannot meet their own expenses after a presumptive child support obligation is calculated, there are adjustments that reflect that as well.14
While understanding the statute is a must, the Department of Human Services has also developed a user-friendly, Web-based child support calculator that is available online at http://childsupportcalculator.dhs.state.mn.us/.
Child Care and Medical Support
The statute also includes steps for calculating child care support and medical support.15 The court must divide any work- or education-related child care expenses between the parents based on their proportionate share of the parties’ combined monthly PICS. The net child care expense per month must be determined prior to performing the calculation.16
There are also significant changes to the medical support provision of the law. It, too, is divided proportionately between the parents, but there are additional provisions detailing how to order and collect insurance coverage and expenses. All support orders must include the following: (1) which parent carries the insurance, (2) the cost of the premium and how the cost is allocated between parents, (3) how un-reimbursed expenses are allocated and collected by the parties, and (4) circumstances under which the obligation to provide coverage shifts to the other party.17
If appropriate health and dental insurance is available to either parent, then the court will order one parent to carry such insurance for the benefit of the minor child. “Appropriate health care coverage” is described as accessible, comprehensive, and affordable and is explained in detail in the statute.18 The amount of each parent’s medical support obligation is then determined by multiplying the cost of such medical and dental insurance per month by the share of PICS of each parent, and the parent carrying the insurance receives a credit equal to the amount of the other parent’s share. In addition, uninsured medical and dental expenses, co-pays, and deductible expenses are divided between the parents according to their shares of PICS.19
If both parties have health care coverage that is comparable as to accessibility and comprehensiveness, it is presumed that the less costly coverage is the more appropriate.20 If a child receives benefits from MinnesotaCare, then the non-custodial parent’s income is applied to MinnesotaCare’s sliding scale to determine the amount due, and the non-custodial parent’s medical support obligation is the greater of that amount or $50. The custodial parent has no medical support obligation in such cases.21
Review and Modification
Another important aspect of the new law is that every family court order or divorce decree that addresses the issues of child support, custody, or parenting time will include an attached form and instructions for either party to seek a review of the order after a six-month period.22 The six-month review gives the parties the ability to make sure child support is current and assess whether both parties are complying with the parenting time provisions of the order without the burden of court motions and additional filing fees.
The new law also contains changes that will affect the modification of child support orders. A child support order existing prior to Jan. 1, 2007, is not subject to modification during the first year that the new law is in effect except under very limited circumstances set forth in the statute.23 These include a 20 percent change in the obligor’s gross income, a change in the number of joint children, a child who is the subject of the order becoming disabled, or a party beginning to receive public assistance. Unless one of the specific circumstances is met, modification will not be allowed until after Jan. 1, 2008. However, the new law does not restrict parties from agreeing to a modification under the new law prior to that date.24
Big changes have occurred in how we must calculate child support. Under the previous version of the law, only one parent’s net income was considered. Under the new law, the costs of raising a child are divided proportionately between the parents based on both parents’ gross income. There have also been changes to parenting time presumptions, modification, and child care and medical support. Only time will tell if the revised statute will meet its stated goals of creating more equitable child support guidelines and increasing compliance with child support orders.
1 State Sen. Tom Neuville, The New Income Shares Model for Calculating Child Support in Minnesota, Family Law Forum, Winter 2006, Vol. 15, No. 1.
2 Valento v. Valento, 385 N.W.2d 860 (Minn. Ct. App. 1986); Hortis v. Hortis, 367 N.W.2d 633 (Minn. Ct. App. 1985).
3 Minn. Stat. § 518A.28.
4 Minn. Stat. § 518A.26, subd. 20.
5 Minn. Stat. § 518A.29 (a).
6 Minn. Stat. § 518A.32, subd. 5.
7 Minn. Stat. § 518A.30.
8 Minn. Stat. § 518A.33.
9 Minn. Stat. § 518A.26, subd. 15, and Minn. Stat.
10 Minn. Stat. § 518A.34, subd. (a)(6), and Minn. Stat.
11 Minn. Stat. § 518A.36.
12 Minn. Stat. § 518A.36, subd. 3, provides the steps for calculating basic support when parenting time is presumed equal.
13 Minn. Stat. § 518A.31.
14 Minn. Stat. § 518A.42, subd. 1.
15 See Minn. Stat. §§ 518A.40 and 518A.41 respectively.
16 The statute provides that child care costs shall be adjusted by the amount of the estimated federal and state child care credit payable on behalf of a joint child and that the Minnesota Department of Human Services “shall develop tables to calculate the applicable credit based upon the custodial parent’s PICS.” See Minn. Stat. § 518A.40, subd. 1. As of the drafting of this article, there were no tables available on the DHS Web site.
17 Minn. Stat. § 518A.41, subd. 2 (b).
18 See Minn. Stat. § 518A.41, subd. 3.
19 Minn. Stat. § 518A.41, subd. 5 (a).
20 Minn. Stat. § 518A.41, subd. 3 (b).
21 Minn. Stat. § 518A.41, subd. 4 (f) (2).
22 Minn. Stat. § 518.178.
23 Minn. Stat. § 518A.39, subd. 2 (j).
24 Minn. Stat. § 518A.39, subd. 2 (j) (7).