Oregon Child Support Guideline Review Changes With the Deficit Reduction Act of 2005 Mandates

1. Oregon Child Support Guideline Review Changes With the Deficit Reduction Actof 2005 Mandates To Be Implemented 10/1/07 OAR 137-050-030 through OAR 137-050-0490

2. Process and Scale This training provides guidance on the changes to the Oregon guidelines from the 2006 guidelines review and the mandated changes from the Deficit Reduction Act of 2005. The training assumes that the participant has a basic understanding of the guideline rules, calculations and worksheets.

3. Process and Scale The Oregon Child Support Guidelines are reviewed in accordance with a requirement of the Family Support Act of 1988 [P.L. 100-485]. Federal regulations [45 CFR 302.56] further require that the review include an assessment of the most recent economic data on child-rearing costs and a review of case data to ensure that deviations from the guidelines are limited.

4. Process and Scale Under ORS 25.270, the Department of Justice, Division of Child Support (DCS) is charged with establishing the formula for calculating child support. The statute also mandates that the formula be reviewed once every four years, to ensure that the application of the formula results in appropriate child support awards.

5. Process and Scale In 2006, DCS convened a guidelines advisory committee to review potential changes to the guidelines. DCS also commissioned a policy study to review and update the scale of basic child support obligations.

6. Process and Scale Policy Studies, Inc. (PSI) completed the study and recommended a new scale based on national economic and statistical data on the cost of raising children in intact households. This study addressed the core of the guidelines, the Schedule of Basic Child Support Obligations, and recommended an updated Schedule based on expenditures data collected in 1998-2004 and updated to 2006 prices, tax rates and poverty levels.

7. Guidelines Advisory Committee Recommended Changes The Guidelines Advisory Committee consisted of stakeholders, partners and Child Support Program staff members. The Guidelines Advisory Committee made several recommended changes to the guidelines based on comments from Division of Child Support staff, District Attorneys, judges, practitioners and the public. While the recommended changes mostly impacted the commentaries to the guideline rules there are several significant changes that are not DEFRA related.

8. 137-050-0320 Definitions Process and Scale • Child Attending School • The definitional rule was updated to include a reference to ORS 107.108 and OAR 137-055-5110 for a child attending school (CAS). • Non-Joint Child • The definition for a non-joint child was amended to include the scenario when one of the children is in state care and mom/dad have a child in the household. With the change in the definition a one parent order can be calculated instead of having to apply a rebuttal for the child still in the household.

9. Process and Scale 137-050-0330 Computation • Formal method for calculating for child attending school • Judges and practitioners have requested the Child Support Program incorporate into rule a method for calculating support for a CAS so that there would be one recommended formula to be used by courts, practitioners and parents. • Policy Studies Inc. was not able to find any relevant data to support costs for a child over the age of 18. Oregon is unique in ordering support for children to the age of 21 if attending post secondary school. • This rule sets out the calculation for both joint minor children and joint children attending school using the updated scale.

10. 137-050-0333 Rebuttals Process and Scale • Case Law Cites • Case law cites were added to many of the rebuttal commentaries to help practitioners with the intent of the rule and how it has been applied in the state. • Reunification Plan • Specific language was added to the rebuttal commentary on section (1)(f) for Child Welfare/Oregon Youth Authority cases to address the needs of a parent who is trying to comply with specific requirements of a reunification plan or other agreement to reunite with the child(ren).

11. Process and Scale 137-050-0333 Rebuttals • Wants vs. Needs of Child • Much discussion was presented on the topic of the wants of a child (or his/her parents) vs. the actual needs of a child. The scale is based on the actual basic cost (needs) of raising a child and does not factor in costs beyond meeting the basic needs of a child. Commentary was added in several of the guideline rules to remind fact finders that the scale only covers the needs of a child and that additional wants should be a matter settled between the parties.

12. Process and Scale 137-050-0333 Rebuttals • Child’s disability benefits • The fact finder cannot include the benefits that the child receives for his/her own disability in the child support calculation. This is addressed in OAR 137-050-0333(1)(g) commentary. The amendment clarifies that a child can receive SSI, but not social security.

13. Process and Scale 137-050-0333 Rebuttals • Potential to Earn • Under (j) financial advantage, the fact finder may look at a party’s potential to earn income amount when the party chooses to not work due to a spouse’s or domestic partner’s income. • Joint Debts • Commentary for section (n) was amended due to HB 2306 (2005), which took out the distinction that the parties had to have lived together to have incurred joint debts.

14. Process and Scale 137-050-0333 Rebuttals • Stipulated Agreements • Case law states that parties can stipulate to child support amounts but that the stipulation is not binding on the court, it is just one of the factors the court can consider. The following language, “included but not limited to” was added to the rule. • The commentary was updated to reflect that the rebuttal list is not an exhaustive list and that the court may consider other appropriate factors not listed. • Much discussion was given to adding a new rebuttal for “stipulated agreements”. The final decision was to add language as noted above to the rule that acknowledges that the fact finder can look at other situations that are not included in the rule. • Adding the above language acknowledges case law while not adding a new rebuttal to the rule.

15. Process and Scale Rebuttal Chart Practitioners asked for guidance in applying rebuttals. This chart shows how the rebuttals could be applied. There is a disclaimer that this is only a tool to help fact finders and is not binding.

16. 137-050-0335 Implementation Process and Scale • Use existing guidelines • The change allows for any pending matter to use the past guidelines in effect at the time that the order was taken but if an order is modified or sent for hearing after the effective date of the rule the new guidelines should be applied. • Currently, when determining past support the fact finder must look to the guidelines in use at that time but use the current income of the parties. A decision was made that the fact finder can use the current guidelines to determine past support. If the court, or Administrative Law Judge (ALJ) chooses, the past guidelines can be used.

17. Process and Scale • Accelerated Depreciation vs. Regular Depreciation • Regular depreciation allows for a set amount of depreciation averaged over a certain number of years. • Accelerated depreciation allows a person to front-load the depreciation to take more at the beginning and then before it totally depreciates in a lesser amount of years the person will normally sell or otherwise get rid of it and start all over again. 137-050-0350 Income from Self Employment

18. 137-050-0400 Nonjoint Children Process and Scale • TANF • Currently, an obligee on public assistance (TANF) does not get a non-joint child credit for a joint child in the household. • The reason credit was not given was because the state is covering the needs for that child. However, if the point is to get a child support order that is as accurate as possible to help the family become self-sufficient where the needs of the child would not be covered by the state then a non-joint child credit should be given. The rule was amended to allow for a non-joint child credit. • Mandatory Union Dues • When determining modified gross income any payment due to spousal support and any mandatory union dues is subtracted. When determining a credit for non-joint child the rule only speaks as to subtracting spousal support but did not include the mandatory union dues. The change makes both parts of the rule consistent

19. Process and Scale • Example to prorate health care coverage costs • Practitioners have requested an example be put into commentary to help understand how to prorate the cost of health care coverage when there are more people on the coverage than the joint child. 137-050-0410 Health Care Coverage

20. 137-050-0420 Child Care Costs Process and Scale • Future child care costs • The rule has been changed to mimic health care coverage costs. If the child care cost is documentable and determinable at the time that the order is being calculated then the child care costs should be calculated and a credit given.

21. Process and Scale • Administrative Law Judge (ALJ) Actual PT • The rule is being amended to allow the ALJ to find actual parenting time during the hearing and be able to use that information to determine the correct parenting time credit. This will allow the ALJ to make an actual finding instead of having to use a rebuttal. What it does not do is change the parenting time agreement. If the parties want to change the written agreement they will have to go to court or stipulate to a new written agreement. 137-050-0450 Parenting Time (PT)

22. Process and Scale • Two Year Average • Because parenting time often changes over the course of two years based on which parent gets which holidays for that year it was determined that using a two year average would be the most correct method of determining the one year time. • Child Attending School • The advisory committee made a recommendation that parenting time not be determined for a child attending school. 137-050-0450 Parenting Time

23. 137-050-0455 Parenting Time Credit Process and Scale • 1.5 Multiplier at 25% Parenting Time (PT) • The advisory committee looked at many parenting time schedules usedthroughout the nation and after much discussion and reviewing the charts presented by Policy Studies Inc. determined that using a 1.5 multiplier would result in the most equitable credit to the parties. • PT beginning at 25% was used because the average PT agreements county-wide start at 24%.

24. Process and Scale • Self-Support Reserve - $953 • The self-support reserve was increased to match federal poverty levels: • $817 = 2006 poverty level  (this is a net income amt) • $953 = Grossed up equivalent of $817 using the 2006 State and Federal taxes and FICA 137-050-0475 Ability to Pay

25. 137-050-0490 Process and Scale The Oregon Child Support Program commissioned a study for an updated scale. The new scale is based on expenditure data collected in 1998-2004 updated to 2006 prices, tax rates and poverty levels.

26. Deficit Reduction Act of 2005 (DEFRA) Changes to Guidelines House Bill 2125 (2007) was filed to implement the federal mandates from DEFRA. The effective date of the bill is October 1, 2007.

27. ORS 25.321 Process and Scale • (6) “Medical support” means an amount ordered to be paid toward the cost of: • (a) Health care coverage, including premiums, provided by a public entity or by another parent through employment or otherwise; and • (b) Copayments, deductibles and other medical expenses not covered by a health benefit plan. The changes in ORS 25.321 set out the definition changes due to DEFRA. But it also incorporates compromises made with partners and stakeholders. One area of concern is that the changes do not take into account the federal requirements that the Child Support Program (CSP) has to follow. For instance, the new definition for “medical support” in the statute is not the federal definition for medical support in federal regulations. In order to bring the two terms together the CSP used the administrative rule process to reflect the differences and provided an avenue that allows the CSP to use the federal terms. This is important because the CSP uses federal reporting forms that use the federal terms. Under the federal proposed rules “medical support” is the umbrella term for health care coverage and cash medical support. Under HB 2125 it means the amount to be ordered for health care coverage premiums and out of pocket medical expenses (federal term is cash medical support).

28. ORS 25.321 Process and Scale • (10) “Providing party” means a party to a child support order who has been ordered by the court or the enforcing agency to provide health care coverage for a child or to provide such coverage when it becomes available to the party. The proposed federal regulations use the term “obligated parent” as the one who will be ordered to provide health care coverage and/or cash medical support. The Child Support Program already uses that term for accounting purposes so the term “providing party” was invented to meet the intention of the federal law. A providing party may be an obligee (custodial parent) but being a providing party does not make an obligee an obligor.

29. ORS 25.323 Process and Scale • (2) In addition to ordering health care coverage …, the court or enforcing agency MAY order one or both parties to pay medical support for the child. Medical support ordered under this subsection must be reasonable in cost. Section (2) was a compromise in House Bill 2125 that would allow the court discretion whether to order cash medical support. Because the Child Support Program is required under federal law to order cash medical support if private health care coverage is not appropriate the federal mandate was added to the Child Support Program’s regular division rules (055).

30. ORS 25.323 Process and Scale • (3) If the court or the enforcing agency finds that the parties cannot provide satisfactory health care coverage because satisfactory health care coverage that is reasonable in cost and accessible to the child is not available at the time the child support order is entered, the court or the enforcing agency: While the court or agency does not have to order cash medical support this is the lead-in to the requirement to make findings if health care coverage is not ordered.

31. ORS 25.323 Process and Scale • (a) SHALL order one or both parties to provide satisfactory health care coverage that is reasonable in cost and accessible to the child when the coverage becomes available; and • (b) MAY order that, until the court or enforcing agency determines that satisfactory health care coverage that is reasonable in cost and accessible to the child is available and modifies the order, one or both parties pay medical support that is reasonable in cost. The court or enforcing agency SHALL make written findings on whether to order the payment of medical support under this paragraph. If health care coverage is not ordered it must be ordered to be provided in the future and if cash medical support is not ordered a finding must be made as to the issue of cash medical support. If cash medical support is not ordered but a finding is made then the Child Support Program can meet the intent of the federal requirement and use the finding as that cash medical support is ordered at zero for reporting purposes.

32. ORS 25.323 Process and Scale • (4) The cost of any amount ordered to provide satisfactory health care coverage and medical support under this section must be included in the child support calculation made under ORS 25.275. • (5) The court or enforcing agency may not order a party to pay medical support under this section if the party is eligible to receive medical assistance under ORS 414.032, or has a dependent child in the household who is eligible to receive medical assistance under ORS 414.032. Section (4) allows for the cost of any health care coverage and cash medical support to be included as part of the guidelines calculations. Section (5) allows for an exception to ordering cash medical support if an obligor or a dependent in the obligor’s household is eligible for Medicaid. The guideline rule (OAR 137-050-0430) requires the party to provide proof of eligibility before it can be applied as the Child Support Program is not able to determine eligibility for another agency’s program under most circumstances.

33. ORS 25.323 Process and Scale • (6) The Department of Justice shall adopt rules for determining the reasonableness of the cost of satisfactory health care coverage and of medical support for the purposes of this section, and for determining how the costs of providing health care coverage and medical support affect the total support obligation for a child under ORS 25.275. Section (6) allows the agency to set the reasonable in cost formula in the guidelines. This is important because the federal proposed regulations allows a child support agency to set their own formula if it is in the state guidelines. If a state does not have the formula in their guidelines then the reasonable in cost cap must be set at the federal mandate of 5%. The Child Support Program initially looked at having cash medical support as a stand-alone obligation added to the child support obligation at the end of the calculation. But this did not allow the cost to be run through the low income adjustment or the self-support reserve thus making the child support obligation amount very high.

34. 137-050-0320 Definitions Process and Scale • Cash Medical Support • Cash medical support incorporates the currently existing “out of pocket medical expenses” over $250 per child per year and adds any payment towards the cost of public health care coverage. Cash medical support is the federal term for these expenses while HB 2125 uses “medical support” to mean cash medical support. The administrative rule clarifies that cash medical support has the meaning found in statute for medical support but for purposes of the guidelines rules also means cash medical support

35. Process and Scale 137-050-0320 Definitions • Medical Child Support • Medical Support • Medical child support is the umbrella term used in Oregon for health care coverage and cash medical child support provisions. The federal umbrella term is “medical support” but that term is being used in Oregon statutes to mean cash medical support.

36. Process and Scale 137-050-0320 Definitions • Providing Party • A providing party is the person ordered to provide health care coverage and/or cash medical support and can be either an obligee or an obligor. • Appropriate Health Care Coverage • Before health care coverage can be ordered it has to be found to be appropriate. Under federal law “appropriate” is a three prong finding. Because an earlier compromise was made with partners the Child Support Program did not take “satisfactory” out of the current statute but instead incorporated it into one of the three prongs of appropriate. That is why the fact finder will see “satisfactory health care coverage” in the statutes.

37. 137-050-0410 Health Care Coverage Process and Scale • Appropriate (three prongs): • Accessible • Must be within 30 minutes or 30 miles, no service area restrictions and includes a new addition that allows a fact finder to look at the work history of the party to see, if health care coverage is ordered, would it be available for at least a year. If not, then a fact finder may make a determination that private health care coverage is not accessible. • Reasonable in Cost • Reasonable in cost is based on the federal requirement to have a numeric formula based on income using a percentage to determine a cap for when the cost of health care coverage is reasonable and should/could be ordered. The guidelines evaluates the pro-rated share of the premium cost against the cap to determine if reasonable in cost. • Comprehensive • Comprehensive is currently set out in statute as “satisfactory” and incorporates the statutory definition of satisfactory.

38. 137-050-0410 Health Care Coverage (HCC) Process and Scale • Fact Finder – Tier for decision making • Obligor Private HCC • Obligee Private HCC • Both Private HCC – Obligee Chooses • Neither Private HCC – Public HCC • Cash Medical Support • Out of Pocket Medical Expenses • Reimbursement for Public HCC This is the tier for determining health care coverage and cash medical support. The next slide explains in more detail.

39. Process and Scale • The guidelines adopts the federal tier for determining when private health care coverage (hcc) or public hcc and/or cash medical support should be ordered. • A fact finder is now required to look at the resources of both parties before making a determination. The obligor should be considered first as to whether private hcc is available either through an employer, union, private method, or through a domestic partner, spouse or other family member residing with the obligor. • Next, the obligee should be considered following the same requirements as set out for the obligor. If both have appropriate private hcc available the obligee can choose who will be ordered to provide hcc. If neither has appropriate hcc then the obligee will be ordered to apply to enroll in public hcc (even if she/he is already receiving public hcc) and then obligor may be ordered to provide cash medical support to help reimburse for the cost of the public hcc. • If private hcc is ordered and there are out-of-pocket medical expenses above the $250 per child per year these expenses can be factored into the calculation and may result in an amount to be ordered for cash medical support.

40. 137-055-0430 Cash Medical Support Process and Scale • Reasonable in Cost • The cost for cash medical support must also be capped at the same reasonable in cost formula used for health care coverage. Unlike health care coverage though, cash medical support can be ordered up to the cap. • Cash Medical Support includes both: • Out-of-Pocket Medical Expenses • Reimbursement for Public HCC costs • Private HCC and Medical Expenses • Cash medical support for out-of-pocket medical expenses can be ordered in addition to private health care coverage. • Obligor or child in obligor’s household exempt • As set out in the statute, if an obligor or a child in the obligor’s household is eligible for medical assistance the obligor can not be ordered to provide cash medical support.

41. Calculation of Support WORKSHEETS

42. THE CALCULATION The CSCW* worksheets for joint minor child and child attending school have been combined as the guidelines now address computation for child attending school. *CSCW, Child Support Computation Worksheet [CSF 02 0809A] Child Support Program Worksheets

43. THE CALCULATION In addition to the main child support calculation worksheet there are now six supplemental worksheets, as follows: • S-1 Parenting Time for Joint Minor Child(ren) • S-2 Parenting Time Credit • S-3 Child Care Credit Computations • S-4 Rebuttal Evaluation • S-5 Private Health Care Coverage Costs • S-6 Cash Medical Support CSP Worksheets:

44. Child Support Computation Worksheet The Calculation • The worksheet now calculates an obligation for both joint minor children and joint children attending school. • Line 9a is the basic support obligation for the minor children. • Line 9b is the basic support obligation for the child attending school.

45. The Calculation • The cost section has been broken out between minor children and children attending school. • This first section allows for the child care credit for the joint minor child and any rebuttals to costs.

46. The Calculation • This section allows for rebuttal costs for the child attending school. • The Child Support Program is aware that the new worksheet allows the child attending school to receive a pro-rated share of the joint minor child’s child care costs and rebuttals. This issue will be addressed in another forum.

47. The Calculation All math for parenting time credit, health care coverage and cash medical support calculations are now done on the supplemental worksheets and the obligation amounts carried back to the CSCW.

48. S-2 Parenting Time The Calculation The S-2 parenting time sets out the new 1.5 multiplier (line 5), which is the amount that is expected to be put out by having two households. This figure is then pro rated between the parties based on income and a credit given based on the amount of parenting time (line 7).

49. S-4 Rebuttal Worksheet The Calculation $150 $75 On the rebuttal worksheet there is a separate column for child attending school costs.

50. The Calculation S- 5 Health Care Coverage The S-5 helps the fact finder determine if private health care coverage (hcc) is reasonable in cost. Line 4 determines each parent’s pro-rata share of the hcc cost. Line 5 sets out the reasonable in cost 7% cap and Line 6a is the point at which the fact finder decides if private hcc will be ordered. If private hcc is ordered the child support obligation amount is adjusted accordingly. If obligee is providing hcc his/her pro rata share of the cost will increase obligor’s child support obligation amount. If obligor is providing hcc his/her pro rata share of the cost will decrease the child support obligation amount.