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Child support is one of the most frequently contested issues in divorce, and for good reason, as the court order can be a financial windfall for one party and costly for the other; not to mention the significant tax implications. Due to the financial implications, many parties benefit from experienced child support counsel early in the divorce process.
Child support attorneys usually charge by the hour instead of a flat fee. In essence, the amount of work required in contested child support cases will depend on how the other party responds. If the other party fights attorney fees will naturally be higher. Accordingly, the amount of work required in a child support case is not predictable at the beginning of representation. Therefore, no attorneys accept child support cases on a flat fee basis.
Most divorce attorneys charge an initial retainer fee and bill by the hour against that deposit. For instance, your attorney may charge an initial retainer fee of $3,000 and bill at a rate of $300 per hour. After a month they may have invested 6 hours on your case and send a bill for $1,800 ($300 per hour x 6 hours). In practice, the attorney will withdraw $1,800 from the $3,000 retainer, leaving the balance of the retainer at $1,200.
Why California Child Support Is So High
California family law seeks to establish “adequate child support” that is primarily calculated using the parents’ respective (1) timeshare with the children and (2) income. In theory, the final child support order will provide the children with a degree of normalcy while ensuring that their basic needs are met. However, application of the State Uniform Guideline (an algebraic formula used by the courts) often establish child support awards that exceed the actual cost of raising a child; according to statute child support may appropriately increase the standard of living of the custodial household and by extension the standard of living of the children. Moreover, California’s public policy states that child support is designed to maintain the child’s right to a lifestyle consonant with the parents’ position in society after divorce. In conclusion, the public policy seeking to balance the wealth of households for the children is embodied in a Guideline formula that is significantly influenced by income and physical custody, which often lead to outrageous child support awards.
How Child Support Is Calculated
The amount of child support that a parent owes is a legitimate concern for many. Determining the actual amount of child support, however, is not so easy for most people to do.
Courts use a pretty complicated formula in determining the amount that a parent is required to pay for child support. This is a statewide child support guideline that is based on the California Family Code section 4050.
How the amount of child support is computed will not be discussed in this article – parties may find the online support calculator offered by the State of California to be helpful in this regard. Instead, this article will focus on the various factors that are considered within the California statewide guideline.
The Family Code defines “gross income” as income from whatever source derived, except for income that is legally exempt from the child support calculation. Annual gross income includes both mandatory items and discretionary items.
Statutory law provides a list of the mandatory items that are considered included in a party’s gross income, which are: commissions, salaries, royalties, wages, bonuses, rents, dividends, pensions, interest, trust income, annuities, workers’ compensation benefits, unemployment insurance benefits, disability insurance benefits, social security benefits, and spousal support received from a person not a party to the proceeding. Gross income also includes the gross receipts from business less the expenditures required for its operation.
On the other hand, the court has the discretion to add other sources of income apart from the mandatory items as gross income. Such discretionary items may include employee benefits or self-employment benefits.
Some of these benefits include, but are not limited to: car allowance or company car, expense accounts (such as for meals and entertainment), employer rent-free housing, uniform allowance, company credit cards, unused vacation, unused sick leave, health and fitness or country club memberships, education, medical reimbursement plan, personal expenses pad, stock options, and daycare.
FAM § 4058 (c) defines what are legally exempt from gross income for purposes of child support. Such exemptions include any income derived from child support payments that are actually received and income derived from any public assistance program. Student loan proceeds and life insurance proceeds are also not included.
New Spouse Income
The income of either parent’s new spouse or nonmarital partner is excluded from that parent’s gross and net income. The exception to this exemption is in “extraordinary cases” where excluding the new spouse’s income would lead to extreme and severe hardship to any child subject to child support, in which case the new spouse or nonmarital partner income may be considered by the court.
Examples of “extraordinary cases” that can lead the court to consider the income of the new spouse or nonmarital partner in determining child support include:
- when either parent has voluntarily or intentionally quit work or reduced his or her income; or
- when he or she intentionally remains unemployed or underemployed and relies on the income of the new spouse or nonmarital partner
Here, the court may consider such income in determining the supporting parent’s actual tax liability for purposes of computing the supporting parent’s net disposable income.
Net Disposable Income
A central element to the algebraic formula used by California courts in determining the amount of child support is net monthly disposable income.
To arrive at the net disposable income, certain deductions are subtracted from the gross annual income, divided by 12 (months).
In addition to gross income and net income, courts also take into consideration some additional factors in determining the amount of child support including:
- the percentage of time that each parent spends with the child;
- the childcare costs that may be incurred by either parent; and
- available tax deductions that can be claimed by either parent