If you have children, it's crucial that child support be addressed carefully and thoroughly at the time of your divorce, because it can have a significant impact on their lives now and for many years to come.
In my experience, learning the basics of issues that pertain to an individual’s divorce before starting the process can help them better work with their spouse (and chosen divorce professional) to resolve them.
So, in this post, you’ll learn the fundamentals of child support, some options for negotiating it, and what you can do to prevent your children from becoming economic victims of your divorce.
Let's dive in!
What is Child Support?
Simply stated, child support is financial support both parents provide to their children post-divorce, for the children’s expenses.
Unlike alimony, which is financial support provided by one ex-spouse to the other, for the recipient adult’s expenses.
How Does Child Support Work? What is Child Support Used For? And What Does Child Support Cover?
"What's in and what's out of child support" varies based on the state you live in. But in my experience, there are 4 types of expenses parents encounter when raising kids:
Ordinary Expenses - including housing, food, utilities, etc.
Extraordinary Expenses - including summer camp, child care, extracurricular activities, etc.
Medical Expenses - including health insurance premiums, deductibles, co-pays, and other out-of-pocket medical expenditures
Post-Secondary Education Expenses - including tuition, room, and board, books, transportation to and from school, and any costs associated with preparing for, or enrolling in, college or other post-secondary education such as trade schools
How you negotiate and come to an agreement on each type of expense – and how long you’re expected to pay them – can vary from state-to-state and divorcing couple to divorcing couple.
There’s a common misconception that only one parent pays child support.
Since one parent writes a check, it may seem like there is only one paying parent.
But that check is only meant to cover a portion of the child or children’s ordinary expenses. The recipient parent is also expected to contribute a portion of those expenses.
The three other types of expenses are typically negotiated separately and are also shared by the parties.
So, the reality is both parents pay child support!
When Does Child Support End?
When child support ends varies from state to state and couple to couple (based on something negotiated.)
But generally speaking:
The payment of ordinary expenses typically ends upon the graduation from high school of a minor child.
The payment of extraordinary expenses commonly ends upon emancipation.
The payment of medical expenses typically ends when a child is able to procure their own health insurance, or age 26, whichever occurs first.
The payment of college expenses normally ends after four consecutive years of attendance.
How is Child Support Decided in a Divorce?
There are two ways child support (and all other divorce-related issues) can be resolved: you and your spouse can negotiate, or a family law court will decide for you.
When it comes to child support, every couple's situation and determining factors are unique. Unfortunately, when the court dictates a child support order, you never know how they will decide it.
So, you could wind up with an outcome you don't think is fair or that doesn't meet your children’s financial needs.
The good news is you have a lot of flexibility and can maintain a lot of control if you settle out of court.
It’s common (and normal) for divorcing spouses to have different points of view on child custody, alimony, division of property, and/or child support. But even if you have disagreements, it doesn’t mean you have to go in front of a judge to get those issues resolved.
Not all divorces have to go to family court.
In fact, resolving disputes out of court saves you a lot of money and time.
It can also help you avoid or lessen a lot of the negative emotional impact that contested divorce cases can have on you and your kids.
When it Comes to Child Support, Every Couple's Situation is Unique
“Most parents think child support calculators output a specific dollar amount and that’s that. So, you may think determining it will be easy because you found an online child support calculator.
But the reality is these guidelines are a starting point for negotiations. Because more often, couples negotiate their own agreement tailored to their kids’ unique situations and circumstances.
Not only that but there are a number of other expenses not covered by the basic support amount.
Figuring out who pays for what, who approves which expenses, and what contribution is required from each parent can be tricky.
Let’s take a high-level look at each of the three models to understand how they work.
Income Shares Model:
The income of both parents is added together.
A basic child support obligation is determined from either a state-specific table or calculated as a percentage, based on the number of minor children.
(optional) Parents can choose to add in other expenses such as the cost of children's health insurance, or daycare.
The child support award is prorated between the parents based on the ratio of their incomes to each other.
Percentage of Income Model:
The income of the non-custodial parent is determined.
Using guidance provided by the state, a percentage to apply to the income is determined based on the number of minor children or a flat percentage.
A basic child support obligation is determined by applying the percentage from step two to the income from step one.
(optional) Parents can choose to add in other expenses such as the cost of children's health insurance, or daycare.
The Melson Formula:
The Melson Formula is a more complex version of the income shares model except this model tries to ensure that each parent's basic needs are met, in addition to the children.
It’s far too complex to try and explain in a blog post, and since only 3 states currently use it, I’m not going to cover it in this post.
Pros and Cons of Using a Guideline to Calculate Child Support Payments
It's Based on a Repeatable Formula. If two different couples entered the same information into the guideline, in theory, it would output the same child support award in both cases.
It Removes the Human Element. This can be a good thing if you and your spouse have trouble agreeing.
They are Commonly Used. Which may make you and/or your spouse more comfortable knowing others have used it to agree on a child support amount.
They are State-Specific. You may be happy to know thought was given to what it costs to raise a child in the state where you live.
They May Not However, Account for Where You Live Within the State. If you live in Chicago or New York City, you have a much higher cost of living than parents who live in the suburbs or rural exurbs, which guidelines won’t usually account for.
They May Have an Upper Income Limit. If your income exceeds the guideline “cap” you and your spouse will have to negotiate an additional amount of child support payment, based on income above the cap.
They Don’t Work for Parents with Variable Incomes. If you’re a commissioned salesperson, a police officer who works lots of overtime, or even someone who receives a bonus that varies year to year, the guidelines won’t work for you as designed.
What if You and Your Spouse Don’t Want to Use the Child Support Guideline?
There is one other approach I’ve sometimes seen parents use and that’s budget-based.
In these cases, parents put together a budget of the children’s ordinary expenses and use that as a basis for determining a child support amount.
While this is technically possible, there are several things you need to be aware of when going this route:
You’d better have a good reason for deviating from your state’s child support guidelines.
Guidelines usually serve as a floor, so agreeing to an amount that’s lower than the one offered up by your state’s guideline may or may not be viewed favorably by the courts where you live.
It may be difficult to determine how much a child’s expenses will be.
How is Child Support Determined for All Other Expenses?
As you previously learned, there are three other types of child support expenses.
And while some guidelines do allow limited inclusion of certain types of expenses, in my experience, parents usually choose to negotiate them directly.
For this to work, you need to discuss and come to an agreement on three things:
1.) What’s In and What’s Out?
It’s a good idea at the time of your divorce to decide what items you are both willing to share in moving forward.
Private school is a good example of this.
Some parents I’ve worked with want their kids to go to a private school as they get older. While others feel that public school is just fine.
2.) How Will The Unknown be Handled?
Of course, there will be expenses that neither of you saw coming so you’ll want to agree on a framework for future discussions when these types of expenses crop up.
A good example of this is a sports camp.
Your 2-year-old might not know a basketball from a basketweave. But 14 years from now, they may be the next WNBA/NBA all-star and want to get some specialized training.
3.) Who Pays How Much?
Let’s say you and your soon-to-be-ex-spouse have agreed on what’s in and what’s out of your child expense-sharing agreement. And how you’ll handle future expenses when they crop up.
Now, you need to decide what each of your shares of those expenses is going to be.
Your choices are:
Share in proportion to income
Share in a fixed percentage
Assign expenses to each party
Which option you choose will depend on a variety of tangible and intangible factors including, but not limited to, your income, how amicable your divorce is, and if you agree on what types of activities you’ll contribute to.
But before you decide which one you think is right for you, let’s look at the pros and cons of each:
Pro: It’s simple to determine each party’s share.
Con: This can lead to conflict if one parent can’t come up with their half.
Share in Proportion to Income
Pro: Each party pays a share based on what they earn.
Con: Shares need to be continually calculated based on then-current incomes.
Share in a Fixed Percentage
Pro: You each know your share.
Con: Your incomes could change and along with it, your original ratio.
Assign Expenses to Each Party
Pro: Can reduce tension while allowing parents to each support activities they believe are worthwhile.
Con: Children’s interests frequently change, leading to the possibility one parent may be solely responsible for all extraordinary expenses.
Child Support Recap and Conclusion:
To say child support is a complicated issue would be an understatement!
And there’s far more to child support than running a guideline formula, printing out a child support worksheet, and calling it a day.
That’s because it’s not a one-size-fits-all subject - every couple’s children, circumstances, and situational complexities are unique.
But you will have the most control over settling the terms of child support (and all other divorce matters) by negotiating out-of-court.
That doesn’t mean you have to struggle to try to resolve your child support case on your own. In fact, for most divorcing parents, this topic is much too complex to resolve without professional help.
By using an alternative dispute resolution process like mediation, you can increase the likelihood of reaching an out-of-court negotiated agreement you and your spouse both find acceptable and both had a hand in creating.
Hopefully, after reading this post, you have a better understanding of this confusing issue and feel better prepared to work with your spouse (and your chosen divorce professional) – to negotiate a mutually agreeable out of court child support arrangement that puts your kids first and ensures they grow up happy, healthy, and financially supported.
The choices you make before you start your divorce are critical.
But you can only make smart choices if you take the time to prepare and get educated first!
Joe Dillon, MBA is a professional divorce mediator and founder of Equitable Mediation Services. Joe is passionate about helping couples avoid the destruction of attorney-driven litigation and specializes in helping couples resolve the issues required for divorce -peacefully, fairly and cost-effectively. When he’s not mediating, you can find him exercising, cooking, and watching Cubs baseball.