Mitch Tacy Family Law

What is Child Support?

Written by family law attorney Mitch Tacy

 

It is important for you to understand the legal realities of how child support is established from start to finish, and for you to understand how the Larimer County District Court or Weld County Court will apply the law to your case.

Fundamentals of Colorado Child Support to Understand

    1.  A key concept in child support is “allocation” (i.e. how Child Support is divided or allocated between the parents). Generally, child support is not divided equally between parents. Instead, it is divided or allocated by each parent’s percentage of both parents’ combined gross monthly income.   The most common misconception with child support is that it is a 50/50 deal. That is only the case if both parents make the same amount of gross monthly income. Another misconception is that if time is 50/50, there is no child support. Again, not true. The only time that child support would be zero in a 50/50 custody arrangement is when both parents also have equal income. So, gross monthly income is a key factor (you add Mom’s gross income to Dad’s gross income, then you identify each parent’s percentage of the total).   FYI, you will note that “gross income” is the term used above. Savings and/or other assets are not factor in determining or allocating child support. If Mom makes $12/hour and $150k in the bank, and Dad makes $20k/month and has $150k in debts, Mom’s “assets” and Dad’s “debts” play no role in the equation – no role in the allocation of child support to the kids – all that counts is the income. So, in this example, for Mom, it is her $12/hour and any interest income from the $150k she has in the bank; for Dad, it is his $20k/month. Because the child support burden is “allocated” between and amongst the parents, by their percentage of combined gross monthly, Dad’s % of responsibility will be much higher than Mom’s % of responsibility.
    2. The next concept in child support is “what” is allocated (or divided between the parties). There are really two categories here. The first is “basic child support.” The second is “extraordinary expenses.” I will explain both in more detail below, however the important thing to understand is the following: “basic child support” is determined by a State-mandated formula; “extraordinary costs” (that are subject to allocation) are costs that either (a) the parties agree upon, or (b) the Court orders (and within that framework, the child support statute actually mandates, defines and limits extraordinary expenses that can be included in a child support calculation)

(a) BASIC CHILD SUPPORT. There are four principals that are important to establishing and understanding basic support: (i) Who is the Obligation to, (ii) Where/How it goes, (iii) What it covers, (iv) How it is determined, and (v) How it is allocated between parents (i.e. how the money flows).

  • Who is the Child Support Obligation to? Answer: the kids. Parents often think about child support as an obligation from one parent to the other (and when it comes time to write a check that is technically true). However, underneath that, the law says that “kids” are entitled to support from BOTH parents, and every parent has a legal obligation to provide financial support to their kids.

The State defines what “basic support” is owed to children, and the reality is that both parents are required to contribute towards “basic support.” Although money can be exchanged between parents, “basic support” is (fundamentally) a legal obligation to the children.

  • Where/How It Goes (Money flow). Answer: to a household. If the kids live in a “primary household” (more than 272 overnights in one parent’s household), all basic support monies flow to that household. That means if Mom has the primary household, all monies for basic support are flowing to her. Dad’s check (or payment) represents his portion of the basic obligation, and it goes to Mom’s household. If the children spend more than 93 overnights in both Mom and Dad’s homes, Basic Child Support monies will flow to both State-mandated formulas determine the amounts ($$$), but the reality is that basic child support monies are allocated or divided between the two households – basically by the percentage of time that the kids spend in each household. A little more detail here… if the state formulas determined that there are two households for the kids, and the basic support = $X, then $X will get divvy’d up so that a percentage goes to Mom’s household, and a percentage goes to Dad’s household. If the kids spend 40% of their time at Dad’s and 60% of their time at Mom’s, then 40% of $X flows to Dad’s household, and 60% of $X flows to Mom’s household.
  • What “it” (Basic Child Support) Covers. Basic child support covers the “basics” of household and general living expenses – kids need housing/shelter, utilities, clothing, food, transportation, etc. There is certainly a more detailed and specific definition, but that’s the gist of it. FYI, the State Formulas determine the amount (discussed below). Although many would like to, parents, particularly the ones who end up having to write a check, do not get to define what basic support dollars go towards.

Common Question: Shouldn’t the other party (receiving a support check) be held to some type of accountability for what child support monies are spent on? Answer: No. No parent (whose household is getting a “payment” from the parent) is required or restricted on what specifically the money must be spent on. No specific “accounting” is required. Quite often, a parent writing a child support check will be sitting there saying – I want to know how my money is being spent. I want to make sure it’s being spent on my kids. I want to make sure my money isn’t going to pay for my ex’s new car. The “obligor” does not get to demand that. The State does not allow for that type of accounting or accountability. Why not? Each parent controls his/her own household budget. Basic child support – which both parents are paying, is a contribution towards “basic living expenses,” which are higher when you have kids. The reality is that “basic child support” for most families does not really come close to addressing the actual expenses of raising children.

What is Basic Child Support and How it is Determined

  • Basic Child Support – How it is determined. Caveat, this explanation talks about the “Basic Child Support” that is owed to the kid(s), not how that amount is divided or allocated between the parents.

Simple Answer: the State has mandatory formulas. The inputs are: Dad’s gross monthly income, Mom’s gross monthly income, the # of children involved, and the amount of time that the kids spend in each parent’s household.

The State’s Formulas go something like this:

Approach # 1 (Called a Worksheet A Calculation): there is only one household to support (the kids spend 272 overnights or more in one of the parents households). Dad’s Gross Monthly Income + Mom’s Gross Monthly Income = COMBINED Gross Monthly. Based on that COMBINED amount, the State will say, if you have one child, Basic Support equals $X; if you have two kids, Basic Support equals $Y; if you have three children, Basic Support equals $Z. Under this Approach # 1, all of the Basic Support is going to flow to the household where the kids are living. I’ll talk about each parent’s share of responsibility later.

Approach # 2 (Called a Worksheet B Calculation): there are two households to support (because the kids spend more than 93 overnights in both parents households). Dad’s Gross Monthly Income + Mom’s Gross Monthly Income = COMBINED Gross Monthly. Based on that COMBINED amount, the State will say, if you have one child, Basic Support equals $X; if you have two kids, Basic Support equals $Y; if you have three children, Basic Support equals $Z.

Under this Approach #2, $X, $Y, or $Z then gets divided up between the parent’s households, based on how much time the kids are there. If they spend 60% of their time at Dad’s, 60% of $X (or Y or Z) will flow to Dad’s household and 40% to Mom’s. Again, I’ll talk about each parent’s share of responsibility later.

  • How Basic Child Support is Allocated between Parents (i.e. each parent’s responsibility and how the money flows and gets to the household). Quick Answer: By each parent’s percentage of combined gross monthly income.

All child support (whether it be “Basic Child Support” or “Extraordinary Support [discussed below]”) is allocated between and amongst the parents by his or her percentage of the “combined” gross income of both parents. That means that if Dad makes more money than Mom, he is responsible for and obligated to contribute a greater amount, or percentage, than Mom – and vice versa.

Put another way – it’s like the tax system. Assume a flat tax of 25%. If Dad makes more than Mom, he will pay more tax. Conceptually, you can say that Mom and Dad pay the same amount – i.e. they both pay 25% tax. But, if Dad makes $100k, his taxes are $25k, and if Mom makes $50k, her taxes are $12.5k. Dad’s contribution to the tax system is more than Mom’s contribution because he makes more money. Now, applied to child support, if Dad makes $100k and Mom makes $50k, Dad is responsible for 2/3 of all child support monies, and Mom is responsible for 1/3 of all support monies (this applies to Basic Child Support and any extraordinary costs).

Let’s go through some examples.

  • Kids live primarily in Mom’s household (more than 272 overnights/year). This means there is one household where child support needs to go to. Mom makes 30% of the parent’s combined gross monthly income, and Dad makes 70% of the combined gross monthly income.

The State formula (discussed above) – based on the parties’ combined gross incomes, and the # of children – says that Basic Support is $X, $Y, or $Z (let’s assume that X, Y, or Z is $1000/month). We know that means that $1000/month needs to flow to Mom’s household. Dad’s portion is 70% or $700. Mom’s portion is 30% or $300. The child support laws say that Dad needs to get his $700 contribution to Mom’s household, so he needs to send Mom a check for $700.

  • Kids spend 60% of their time at Mom’s and 40% of their time at Dad’s (291 overnights at Mom’s and 146 overnights at Dad’s). This means that there are two households where child support needs to go to. Mom makes 30% of the parent’s combined gross monthly income, and Dad makes 70% of the combined gross monthly income.

 If the State formula (discussed above) – based on the parties’ combined gross incomes, and the # of children – says that Basic Support is $1500/month, that means that $1500/month is going to get divided between the two households – 60% of it, or $900 goes to Mom’s household, and 40% of it, or $600 goes to Dad’s household.

Now, we need to figure out each parent’s portion of responsibility – and remember – that gets done (allocated) by percentage of combined gross monthly income. The math gets a little more complex, but is conceptually simple:

For the $900/month that needs to go to Mom’s household – Mom is responsible for 30% (or $270), and Dad is responsible for 70% (or $630). So, Dad needs to get $630 into Mom’s household to make sure that the children are getting the basic support they are entitled to within that household.

For the $600/month that needs to go to Dad’s household – Mom is responsible for 30% (or $180), and Dad is responsible for 70% (or $420). So, Mom needs to get $180 into Dad’s household to make sure that the children are getting the basic support they are entitled to within that household.

In summary, Dad has to sent $270 to Mom’s household, and Mom has to send $180 to Dad’s household. Instead of having two checks (or payments) crisscrossing, the State’s child support calculator “nets” the obligations and has Dad sending Mom’s household $90/month.

The only time that no money would need to flow (or no child support obligation would be occurring) is when: (a) both parents have a 50/50 parenting schedule, and (b) both parents make the same amount of money (and there each parent makes 50% of their combined gross monthly).

  • EXTRAORDINARY EXPENSES (FOR THE CHILDREN). “Approved” Extraordinary expenses for the children are divided between the parties in the same manner that Basic Child Support is, i.e. by each party’s percentage of combined gross monthly income. There are two ways that “approved” extraordinary expenses can be divided between the parties:
  • They can be included in the state’s Child Support Worksheet Formula, and factored into the overall Child Support Obligation. Resulting, for example, in Dad’s monthly child support payment being $X. OR…
  • If they are not included within the state’s Child Support Worksheet Formula, they can reside outside of the Child Support Worksheet Formula, and thus, not be factored into Dad’s child support obligation. If the parties agree, or the Court orders it, these extraordinary expenses, are still divided between the parties – by their percentage of combined gross monthly income.

Relevant Questions/Issues – (i) what are “approved” extraordinary expenses, (ii) how are “approved” extraordinary expenses determined, (iii) when are they typically included within the Child Support Worksheet Formula (and when do they reside outside of the Child Support Worksheet Formula), and (iv) what about “non-approved” extraordinary expenses, and how are they handled.

  • What are “approved” extraordinary expenses? First and foremost, approved extraordinary expenses for the children are just that – expenses relating to and for the children. ANSWER: Colorado Statute defines “approved” extraordinary expenses. There are generally six categories: [1] child care costs, [2] health insurance costs for the children, [3] uninsured medical expenses for the children, [4] educational expenses for the children, [5] transportation costs of the children, and [6] “other” costs for the children that can diminish the basic support that is available if they are not accounted for.

The logic here is fairly easy to follow – these are categories of expenses for children, that do not fall under the category of general living expenses. And, if one parent has to pay for 100% of an “approved” extraordinary expense, particularly a parent who is also responsible for supporting a household for the children, that means that without the other parent’s contribution, the monies available for basic needs will be compromised unfairly.

  • How are “approved” extraordinary expenses determined? ANSWER: Either the parties agree on these extraordinary expenses, OR, a Court makes the determination for them. Some of these are easy and intuitive – like health insurance costs. Others are not. So, when parties can not agree, the Court will make the decision for the parties.

Example: Childcare costs. One parent will say, our children have daycare costs, I need help with that expense. The other parent will say, sorry, it’s your time, it’s your expense. Or, the other parent will say – you spend too much on childcare; you are paying for an expensive private nanny, when you could be sending the kids to BASE Camp or to a less expensive daycare service; or I’m not paying for daycare, so you can go to the gym or go out with your friends. When disputes like this happen, the Court will intervene – is the daycare expense work or educationally related; are the expenses and costs reasonable? If so, the Court approves, and financial responsibility needs to be shared by the parents (proportionally by his/her percentage of combined gross monthly income).

Another Example: Cell phone costs for Kids. One parent will say, our children have phones; they need them to communicate. I need help with that expense. The other parent will say, sorry, it’s your time, it’s your expense; or, sorry, I know you want the kids to have phone, but I can’t afford it. If the Court intervenes, this expense is up to the Court to decide. It is unlikely that the Court would approve of the cell phone costs because it does not fall into one of the six categories that the Statute recognizes.

  • When are “approved” extraordinary expenses typically included within the Child Support Worksheet Formula (and when do they reside outside of the Child Support Worksheet Formula)?

This typically occurs when the costs are fixed, and it is logistically easy (i.e. makes sense) to include them in the Child Support Worksheet Calculation, so as to avoid monthly reimbursement by the other party. Best example is health insurance or daycare, where one parent is typically paying for 100% of the upfront cost. Usually, the monthly cost is set and fixed (non-variable). The way that Worksheet Formula works is that it reallocates that cost, so that the parent paying 100% of the cost ends up with a credit, so as to insure that the other party is debited for his/her respective (%) portion. For example, if Dad’s worksheet obligation was $800 without the inclusion of the “approved” extraordinary cost – let’s say he pays $100 per month for health insurance for the children (and assume Dad makes 70% of the combined gross monthly income), Dad would be paying Mom $800/month, then Mom would be required to reimburse Dad $30/month for her share of the health insurance (30% of $100). All the worksheet does is reduce Dad’s monthly payment to Mom by $30, making his monthly child support payment, $770/month.

“Approved” extraordinary expenses typically reside outside of the Child Support Worksheet when they are either (a) not fixed or regular expenses, (b) they can not be accurately quantified or reduced to a monthly average, and/or (c) the parties agree to simply divide the expenses as they occur.

Examples of this would be: Uninsured Medical Expenses. These typically are not “regular” or predictable, so they fall outside the Child Support Worksheet calculation, and as they come up, the parties then divide these costs – with Dad paying his portion (corresponding to his percentage of combined gross monthly income) and Mom paying her portion. Required Educational Costs. This might be school registration fees, tutoring fees, and sporting/activity costs.

There are some “approved” extraordinary expenses that can fall both ways, like travel expenses for children.   If the children travel three times a year, flying back-and-forth from Mom’s house to Dad’s house…

  • These costs if the parties can agree upon an average annual amount (and hence an averaged monthly cost), can be included in the worksheet calculation. Within that stipulation, one party will agree to pay the 100% costs, and he/she gets an adjustment for it in the worksheet calculation. That means although they are paying for 100% of the cost out-of-pocket, they are actually getting an adjustment within their monthly child support under the worksheet, so as to compensate them for the other parent’s percentage share.
  • These costs can also reside and be divided outside of the Child Support Worksheet calculation. That means that when they occur, each party will pay his/her respective portion. Or, one party pays the upfront costs and then he/she is entitled to reimbursement from the other parent for his/her percentage share.

If the parties can not agree on the above (regardless of what type of “approved” expense is at issue), the Court will decide for them. When the Court does that, the Court will decide: (a) is this an “approved” extraordinary expense, (b) can the expense be quantified into a monthly average, and (c) should it be included in the worksheet calculation, or left out to be divided as the expense comes up.

  • What about “non-approved” extraordinary expenses, and how are they handled?

“Non-approved” extraordinary expenses are usually handled by agreement of the parties. Usually, the Court is not going to reject the parties’ agreements, because they benefit the children. Some extraordinary expenses fall into a gray area, which I will address below.

The most common examples of “non-approved” extraordinary come out when two parents agree to share in the costs of expenses for the children – piano lessons, field trips, cell phone plans, extracurricular or sporting fees and costs, etc. Parents do not have to divide these costs by any specific formula (such as percentage of combined gross monthly income). The primary reason why is because the Court is not likely to require or order the cost, and the associated division of each parent’s responsibility.

Cell phone costs are a good example. In order for the Court – in the event of a disagreement – to allocate an extraordinary cost, the Court must get its authority from the applicable statute. Nowhere in the statute does the Colorado legislature mandate that cell phones are “approved” extraordinary costs (compared to daycare or medical costs), therefore, in the event of a disagreement, the Court lacks the authority to order that the costs associated with a cell phone plan are: (a) required, or (b) subject to division.

Clothing costs are another example. This typically comes up in two forms. Special clothing that is needed for sports and/or extracurricular, or back to school clothing, where one parent wants to buy designer clothing, and the other parent says, I can’t afford that. Nowhere in the statute does the Colorado legislature mandate that clothing costs are “approved” extraordinary costs (compared to daycare or medical costs), therefore, in the event of a disagreement, the Court lacks the authority to order that the costs associated with clothing purchases are: (a) required, or (b) subject to division.

Below is the section, within the Colorado Revised Statutes, that addresses extraordinary expenses, i.e. what is “approved” and subject to division between the parties.

CRS 14-10-115:

(9) Adjustments for child care costs. (a) Net child care costs incurred on behalf of the children due to employment or job search or the education of either parent shall be added to the basic obligation and shall be divided between the parents in proportion to their adjusted gross incomes. (b) Child care costs shall not exceed the level required to provide quality care from a licensed source for the children.

 (I have omitted the remaining verbiage, which is not relevant or helpful).

(10) Adjustments for health care expenditures for children. (a) In orders issued pursuant to this section, the court shall also provide for the child’s or children’s current and future medical needs by ordering either parent or both parents to initiate medical or medical and dental insurance coverage for the child or children through currently effective medical or medical and dental insurance policies held by the parent or parents, purchase medical or medical and dental insurance for the child or children, or provide the child or children with current and future medical needs through some other manner… …At the same time, the court shall order payment of medical insurance or medical and dental insurance deductibles and copayments.

(I have omitted the remaining verbiage, which is not relevant or helpful).

(11) Extraordinary adjustments to the schedule of basic child support obligations – periodic disability benefits.

(a) By agreement of the parties or by order of court, the following reasonable and necessary expenses incurred on behalf of the child shall be divided between the parents in proportion to their adjusted gross income:

(I) Any expenses for attending any special or private elementary or secondary schools to meet the particular educational needs of the child; and

(II) Any expenses for transportation of the child, or the child and an accompanying parent if the child is less than twelve years of age, between the homes of the parents.

(b) Any additional factors that actually diminish the basic needs of the child may be considered for deductions from the basic child support obligation.

(I have omitted the remaining verbiage, which is not relevant or helpful, as it relates to disability payments).

  • Not included in the above assessment is how each party’s gross monthly is determined, or when a party is exempted from working – such as returning to school, pursuing a degree that will lead to higher income, within a reasonable period of time, which will not unreasonably deprive the children of needed support.

However, what you should know is that “assets” (for example money sitting in a bank, real estate value, etc.) is not included in the determination of a party’s child support obligation, except to the extent that the asset produces income… then, the income would be included in the party’s gross monthly income.

How is Child Support Paid?

Child support can be paid directly to a co-parent (we recommend you always pay by check so your payment can be traced) or paid through the Colorado Family Support Registry.

We strongly recommend that you have your attorney prepare an Order to use the Colorado Family Support Registry (FSR) to process your child support and maintenance (if applicable) payments for more information on the Colorado FSR Click here-

https://childsupport.state.co.us/siteuser/do/vfs/Frag?file=/cm:pFSR.jsp

 

 

 

 

 

 

 

 

 

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