How is Minnesota Child Support Calculated?
HOW IS CHILD SUPPORT CALCULATED IN MINNESOTA?
In Minnesota, parents have a duty to provide financial support for their minor children. While a couple is married, they typically meet this duty by supporting their joint-minor children as a married couple. However, in a divorce decree, legal separation, or annulment, the court must include an order which properly sets the child support amount that each party must pay. Child support is broken down into three categories—(1) basic child support; (2) medical support; and (3) childcare support. The combined total support obligations in these three categories make up the obligor’s net child support obligation. Additionally, Minnesota uses an income shares method to calculate child support, where the gross income of both parents is also considered.
Child Support Calculation
In order for a court to determine an obligor’s basic child support obligation, the court must:
determine the gross income of each parent;
calculate the parental income for determining child support (PICS) of each parent, by subtracting from the gross income the credit, if any, for each parent’s non-joint children;
determine the percentage contribution of each parent to the combined PICS by dividing the combined PICS into each parent’s PICS;
determine the combined basic support obligation by application of the child support guidelines;
determine the obligor’s share of the basic support obligation by multiplying the percentage figure from number 3 above by the combined basic support obligation in number 4; and
determine the parenting expense adjustment, if any, and adjust the obligor’s basic support obligation accordingly.
Determining Gross Income
Gross income is any form of periodic payment to an individual, including, but not limited to, salaries, wages, commissions, self-employment income, workers’ compensation, unemployment benefits, annuity payments, military and naval retirement, pension and disability payments, spousal maintenance, Social Security or veterans’ benefits provided for a joint child, and potential income. Gross income is based upon compensation before participation in an employer-sponsored benefit plan that allows an employee to pay for a benefit or expense using pre-tax dollars. This includes health savings accounts, retirement accounts, and before deduction for health and dental insurance programs. Furthermore, self-employment gross income is gross receipts minus costs of goods sold minus ordinary and necessary expenses required for self-employment or business operation. The parent seeking to have an expense deducted must prove that it is ordinary and necessary.
Determining Potential Income
If a parent is voluntarily unemployed, underemployed, or employed on less than a full time basis, or there is no direct evidence of any income, child support is calculated based on a determination of potential income. There is a rebuttable presumption that a parent can be gainfully employed on a full time basis. Potential income is calculated by determining (1) the parent’s probable earnings level based on employment potential, recent work history, and occupational qualifications in light of prevailing job opportunities; (2) the parent’s unemployment or workers’ compensation benefits; or (3) the amount of income a parent could earn working 30 hours per week at 100 percent of the current minimum wage.
Parenting Expense Adjustment
The Parenting Expense Adjustment is a deduction from the obligor’s child support obligation, and accounts for the expenses incurred while a parent is exercising his or her parenting time, such as food, transportation, recreation, and household expenses. The more parenting time a parent exercises, the greater the amount of the adjustment or deduction. The Parenting Time Adjustment is calculated based on the percentage of overnights each parent exercises with the children averaged over a two-year period.
Medical Support
The parent who provides medical insurance for a minor child is entitled to a contribution from the other parent towards the cost of the premium. Unless otherwise agreed upon by the parties, or approved by the court, the court must order that the cost of health care and all unreimbursed medical expenses under the insurance plan be divided between the obligor and the oblige based on their proportionate share of the parties combined monthly PICS, unless there are other dependents on the insurance plan and there would be no additional premium cost to add the joint minor children.
Childcare Supports
A parent incurring reasonable work or education related childcare costs is entitled to a contribution from the other parent. Unless otherwise agreed to by the parties or approved by the court, the court must order that these costs of joint children be divided between the obligor and the oblige based on their proportionate share of the parties’ combined monthly PICS. Childcare costs must be adjusted by the amount of the estimated childcare credit payable on behalf of a joint child. The parent paying the expenses directly to the childcare provider is entitled to this tax credit, and the amount they receive for childcare support from the obligor is adjusted to reflect the anticipated tax credit.
Deviation from the Child Support Guidelines
A party may request a deviation from the aforementioned guidelines. In deciding whether to allow the parties to deviate from the child support guidelines, the court must consider the following factors:
The income, earnings, and circumstances of both parties;
The extraordinary financial needs, physical and emotional condition, and educational needs of the child;
The standard of living the child would enjoy if the parents were currently living together, but recognizing that the parents now live apart;
Whether the child resides in a foreign country for more than one year that has a substantially higher or lower cost of living than in this country;
Which parent receives the income taxation dependency exemption and the financial benefit the parent receives from it;
The parents’ debts; and
The obligor’s total payments for court ordered child support exceed certain statutory limitations.
The overarching factor courts use in determining whether a deviation from the guidelines is appropriate is whether the deviation would be fair and equitable.
Modification of Child Support
In order to modify child support obligations, it must be shown that there has been a substantial change in circumstances that makes the terms of the current order unreasonable and unfair. There is a rebuttable presumption that there has been a substantial change in circumstances and the terms of the current support are unreasonable and unfair if, among other things, the application of the child support guidelines to the current circumstances results in a calculated court order that is at least 20 percent and at least $75 per month higher or lower than the current support order. It is further presumed that the current support order is unreasonable and unfair if the current support order is less than $75, it results in a calculated court order that is at least 20 percent per month higher or lower or the gross income of an obligor or oblige has decreased by at least 20 percent through no fault or choice of the party.
MINNESOTA CHILD SUPPORT ATTORNEYS
Calculating child support can be confusing, burdensome, and complicated. There are very specific equations and guidelines that must be followed in order to determine the correct child support amount for your minor child(ren). It is important to have an experienced Minnesota child support attorney review the calculation and make sure that you are not paying too much or receiving too little in child support. Contact a Minnesota child support attorney today at (651) 468-2103.