If you pay or receive child support, you may be aware that on September 1, 2013, the cap on monthly net resources used to calculate child support payments increased from $7500 per month to $8550 per month. What you may not know, however, is exactly what that could mean for you.
First, a little background: In Texas, monthly child support payments are based on the supporting parent’s average monthly net resources less certain deductions. But Texas guidelines also have a cap on the amount of monthly net resources that can be used to determine the payment. As of September 1, the cap is $8550 for everyone that meets the higher income requirements, even if a court order or divorce decree concerning child support already is in place. More specifically, the increase applies to payers with gross monthly resources between $10, 340.50 and $11, 828.81 per month or more.
The change does not mean an across the board increase in child support. If the supporting parent’s income falls below the former guideline cap, support payments remain the same. It does, however, affect obligors that had more than $7500 in monthly net resources at the time of a past divorce if child support payments were calculated using the prior cap guidelines.
Want to try to calculate guideline child support for your situation? Get out your calculator and slide rule! First, you need to determine the payers gross annual income. That includes not only 100% of all salary, but commissions, overtime, tips, and bonuses — before deductions. Then add interest, dividends and royalties, self-employment income, net rental income, and any other income (retirement, severance, pension, trust, unemployment, gifts, workers’ comp, etc., etc., etc.).
Don’t include capital returns, accounts receivable, welfare payments, foster care payments, or a new spouse’s income.
Divide by 12. Now subtract social security tax, federal income tax (based on a single person with one exemption and standard deduction), state income tax, union dues, and any medical or health insurance for the supported child. Assuming you didn’t miss anything, the resulting amount is the supporting parent’s average monthly net resources available for child support.
Still with me? If the amount is less than $8550, here’s the guideline for calculating payment.
- 20 % for one child
- 25 % for two children
- 30 % for three children
- 35 % for four children
- 40 % for five children
- Not less than 40 % for six children
Keep in mind that what you’ve just read assumes that you calculate every item accurately and no special circumstances exist. The amount is different, for example, if the parent already pays child support of children from a previous marriage, or if the child has special needs or medical expenses. The factors that can cause a judge to adjust child support payments are as complex as the calculations. And calculating is only the first step. If you believe that you are entitled to a modification in the payment amount based on the recent change in the statute, you must petition the court for the change.
Of course, parents can avoid these accounting headaches by agreeing on an amount of child support, whether it agrees with the Texas guidelines or not. Deciding the amount may be difficult in the midst of a divorce, but that’s why family law attorneys exist. We can help you evaluate your particular situation and reach an agreement, whether in court or in mediation.