Tennessee’s New Child Support Guidelines

1. Tennessee’s New Child Support Guidelines Income Shares

2. Purpose • Captures actual child-rearing expenses at various levels of parental income and then pro-rates these expenses between both parents • Requires consideration of the income of both parents • Allows child to share in the financial resources of both parents • Each parent is responsible for his/her pro-rata share of the child support obligation

3. Basic Concepts • Custodial Parent is now referred to as the Primary Residential Parent (PRP) • Non-Custodial Parent is now referred to as the Alternate Residential Parent (ARP) • Two parenting situations • Standard – one PRP/ARP for all children • Split – two PRPs/ARPs for all children

4. Definitions • PRP – the parent with whom the child resides more than 50% of the time • ARP – the parent with whom the child resides less than 50% of the time

5. Definitions • Standard Parenting – all children under the order have the same PRP and the same ARP • Split Parenting – one parent is the PRP/ARP for at least one child under the order and the other parent is PRP/ARP for at least one other child under the order

6. Tools for Calculation of Support

7. Tools for Calculation of Support • Worksheets • Child Support Worksheet – to be used in all cases for calculation of the child support obligation • Credit Worksheet – to be used when calculating credits for a parent’s qualified other children • Worksheets are Excel - based and perform all necessary calculations • Calculation results on the Credit Worksheet are automatically transferred to the Child Support Worksheet

8. Tools for Calculation of Support • Child Support Schedule – provides the child support obligation for various levels of parental income and number of children – always round up to the nearest increment of $50

9. Gross Income Calculations

10. Gross Income Calculations • Gross Income • From all non-exempt sources – same is in current Guidelines • Both parents of the child – Do not consider income of a non-parent caretaker • No deductions for federal income taxes or FICA contributions, except for self-employed parents – these taxes are taken into consideration on the Child Support Schedule in each child support obligation

11. Gross Income Calculations • Willful and Voluntary (Under)Unemployment – • Generally the same as in current Guidelines • Determination now applies to both parents • Applies to any intentional act of the parent • Imputed Income – • $ 35,851 for males • $ 26,450 for females • From American Community Survey of 2002 for full time Tennessee workers

12. Gross Income Calculations • Adjusted Gross Income (AGI) • Gross Income minus the following: • Self-employment taxes paid by the parent • Amounts paid on pre-existing child support orders • Support provided to qualified other children of the parent • The AGI of each parent is combined to determine the percentage of income (PI) for each parent

13. Credits for Qualified Other Children

14. Credits for Qualified Other Children • Other children – are those children not presently before the tribunal for the establishment or modification of a child support order • Other children are qualified if: • The parent is legally responsible for the child’s financial support • The parent is actually providing financial support to the child • Credits are available to either parent

15. Definitions • A person is legally responsible for a child if a child is - • Born of the person’s body, • Born of the person’s marriage, • The legally adopted child of the person; • Voluntarily acknowledged by the person, or • Otherwise determined to be the child of the person

16. Credits for Qualified Other Children • Pre-existing support orders • Pre-existing determined from the date the order was initially entered • Credit allowed for the average monthly amount actually paid 12 months prior to hearing, up to the amount of the order • Does not include amounts paid on arrears

17. Credits for Qualified Other Children • Children not subject of pre-existing child support orders • Credit available up to 75% of the amount of a theoretical order, using • Income of the parent seeking the credit • Credit for self-employment taxes paid • No credit for pre-existing orders • Number of qualified other children • Do not consider the income of or support provided by a child’s other parent

18. Definitions • Theoretical Order – • A hypothetical order which allows the finder of fact to determine the amount of a child support obligation if an order existed. • Used to determine the amount of credit allowed as a deduction from a parent’s gross income for a parent’s qualified other child who is not under a pre-existing child support order.

19. Credits for Qualified Other Children • In-Home Children • Those qualified children who reside with the parent more than 50% of the time • The amount of the credit allowed for these children is 75% of a theoretical order • Not-In-Home Children • Total of all qualified children residing with the parent less than 50% of the time, without regard to the child’s primary household • The amount of the credit allowed for these children is the lesser of: • 75% of a theoretical order • Support actually provided – established by documentary proof

20. Definitions • Documentary proof of monetary support - • Physical evidence of monetary payments to the child’s caretaker, such as canceled checks or money orders • Evidence of payment of child support under a subsequent child support order, such as a payment history from a tribunal clerk or child support office or from the Department’s internet child support payment history • “In kind” remuneration such as food, clothing, formula, or diapers is not acceptable for this credit

21. Basic Child Support Obligation

22. Basic Child Support Obligation • Amount of basic support to be provided by both parents is determined on the Child Support Schedule by cross-referencing the combined adjusted gross income (AGI) of both parents with the number of children for whom support is being calculated – amount does not include • Adjustments for additional expenses • Adjustments for parenting time • Adjustments for deviations • Uninsured medical expenses • This amount is allocated between the parents according to the percentage of income (PI) of each parent

23. Definitions • Percentage of Income (PI) – the PI for each parent is calculated by dividing each parent’s AGI by the combined AGI of both parents

24. Basic Child Support Obligation • Standard Parenting – One BCSO • The combined gross income of both parents • The number of children for whom support is being calculated

25. Basic Child Support Obligation • Split Parenting – A BCSO for each parent • Mother’s BCSO • The combined adjusted gross income for both parents • The number of children for whom support is being calculated for whom the Father is the PRP • The Mother’s PI • Father’s BCSO • The combined adjusted gross income for both parents • The number of children for whom support is being calculated for whom the Mother is the PRP • The Father’s PI

26. Policy • Income Shares vs. the Flat Percentage • Economic studies reveal that, as income increases, the dollar amount spent on child-rearing expenses increases but the percentage of income spent on child-rearing expenses decreases • Accordingly, flat percentages have statistically been too low at lower incomes and too high at higher incomes

27. Policy

28. Definitions • Parenting time adjustment - adjustment to the ARP’s portion of the BCSO based upon the ARP’s parenting time with the child

29. Basic Child Support Obligation • Parenting Time Adjustment • Reduction to BCSO • Parenting time with the child greater than 120 days • 121 - 136 days = 10% reduction • 137 - 151 days = 20% reduction • 152 - 166 days = 30% reduction • 167 - 181 days = 40% reduction • 182+ days = 50% reduction

30. Basic Child Support Obligation • Parenting Time Adjustment • Increase to BCSO • Parenting time with child less than 54 days • 53 – 39 days = 10% increase • 38 – 24 days = 20% increase • 23 – 9 days = 30% increase • 8 – 0 days = 35% increase

31. Definitions • Days – a parent gets credit for a day of parenting time if the child spends the majority of a 24 hour calendar day with or under the control of a parent and that parent expends a reasonable amount of resources on the child during this time period (such as the cost of a meal or other such costs directly related to the care and supervision of the child)

32. Treatment of Expenses

33. Treatment of Expenses • Amounts actually paid by a parent or other caretaker • Basic Expenses • Such as: • Food • Clothing • Housing • Included in the BCSO

34. Treatment of Expenses • Additional Expenses • Mandatory Expenses • Child’s healthcare premium • Expense attributable only to child for whom support is being calculated • Allocated according to parent’s PI • Added on to BCSO • Work-related childcare • Projected over next 12 months and averaged for a monthly amount • Includes only amounts actually paid • Allocated according to parent’s PI • Added on to BCSO

35. Treatment of Expenses • Uninsured Medical Expenses • No calculations on the Worksheet • Order shall provide for payment of expenses according to parent’s PI or as otherwise specified by the tribunal • Recurring amounts added to the Presumptive Child Support Order (PCSO)

36. Definitions • Uninsured Medical Expenses - medical expenses which include, but are not limited to, health insurance co-payments, deductibles, and such other costs as are reasonably necessary for orthodontia, dental treatment, asthma treatments, physical therapy, vision care, and any acute or chronic medical/health problem, or mental illness, including counseling or other medical or mental health expenses, that are not covered by insurance.

37. Treatment of Expenses • Extraordinary Expenses • May be added to the Presumptive Child Support Order as a deviation in the discretion of the tribunal • Extraordinary Education Expenses • Special Expenses - can be added to the BCSO when the expense exceeds 7% of the BCSO

38. Summary of Calculations • Basic Child Support Obligation (BCSO) – • Obtained from the Child Support Schedule • Based on number of children and combined AGI of both parents • Adjusted Support Obligation (ASO) • BCSO adjusted for parenting time, the health insurance premium, and child care

39. Summary of Calculations • Presumptive Child Support Order (PCSO) • The ASO adjusted by the total amount of the health insurance premium and/or the work-related child care paid through payroll deduction; and/or • The ASO adjusted for the statutory threshold • Final Child Support Order (FCSO) • The PCSO adjusted for deviations and uninsured medical expenses • In the absence of such adjustments, the PCSO is the FCSO

40. Child Support Order • High-Income Threshold • Absent rebuttal, the PCSO is limited to the following amounts - • $2100 for one child • $3200 for two children • $4100 for three children • $4600 for four children • $5000 for five children • With rebuttal, additional amounts may be added to the PCSO as a deviation • Also applicable to the calculation of a theoretical order

41. Child Support Order • Deviations • Must consider the best interests of child for whom support is being calculated • Order shall include guideline amount and findings in support of deviation • Reasons • Same as current Guidelines • Extraordinary Expenses • Rebuttal of high-income threshold • Low income of either parent

42. Child Support Order • Modifications • Generally require a significant variance • No significant variance needed if • Providing for healthcare needs • Eliminating a previous deviation due to a change in circumstances • Retroactive Support – • From birth of the child or separation of the parties • Using Guidelines in effect at the time of the order

43. Modification

44. Modification • After implementation of the Rules, a significant variance is - • At least a 15% change in the ARP’s gross income - and/or • A change in the number of children for whom the ARP is legally responsible – and/or • The child for whom support is being calculated becoming disabled – and/or • The parties entering into an agreed order for modification of the support obligation in compliance with these Rules – and – • At least a 15% (or 7.5%) change in the support obligation • After January 1, 2006, a significant variance will be a 15% (or 7.5%) change in the support obligation • 7.5% applies to low-income parents

45. Definitions • Low-income parent – • a parent who, when working at his/her full capacity according to his/her education and experience and not willfully and voluntarily unemployed or underemployed, has adjusted gross income at or below the federal poverty level for a single adult • The federal poverty standards will be available at www.state.tn.us/humanserv • Current amount is $9310 annual gross income

46. Modification • Hardship Deviation - • When modifying an order under Income Shares that was established under the current Guidelines • For the first modification, whenever it should occur • Can be applied only one time • Can limit the amount of the modification if: • Decrease would impair the household of the PRP • Increase would impair the household of the ARP • Deviation cannot be used in a subsequent action to create a significant variance

47. Learning Tools • Income Shares Tutorial on the Department’s website – includes • All pertinent documents • A detailed walkthrough of a support calculation • Interactive examples • FAQs • www.state.tn.us/humanserv/is/incomeshares.htm