The Family Support Act of 1988 requires states to review their child support guidelines at least once every four years to ensure that their application results in appropriate child support award amounts. Federal regulations also require State to analyze case data related to the application of, and deviations from, the guidelines. They also must consider economic data related to the cost of raising children. Beyond these federal requirements, States have broad discretion in conducting guideline reviews. This report examines the review process of State and jurisdictions.

ENTITY CONDUCTING STATE GUIDELINE REVIEWS

Usually a government entity such as the court or State child support agency was responsible for the guideline review. Often this entity solicited input from others, such as expert consultants and advisory subcommittees. Many States held public hearings to solicit diverse perspectives. The makeup of the review body was not as significant a factor in the quality of the review as the time and resources committed to the effort. Also key was the receptivity of the responsible State authority to the reviewers' recommendations. In some cases, the responsible bodies rejected recommended changes.

Less than half of the responding states appear to have followed the federal requirements to analyze case data and to consider economic data regarding the cost of raising children. Most State studies on child-rearing costs relied on national data on consumer expenditures. Few States examined state or region-specific expenditure levels. Reviewers acknowledged the age of some of the research upon which the national data was based. Another limitation is that these studies rarely factored in costly expenditures such as child care, post-secondary education, and medical insurance.

About 20 States and jurisdictions indicated that they had collected case data on deviations from the guidelines. Lack of funding, resources, automated data processing, and adequate documentation in case files affected these studies. A summary and analysis of State cases samplings is found in Part 2 of this report.

TOPICS ADDRESSED BY REVIEWERS

State guideline reviewers studied a number of issues related to the application of guidelines. Surprisingly, few States reviewed their core guideline model or methodology. Rather, guideline reviews focused on issues relating to income, adjustments to income, adjustments to the guideline amount, and deviations from the guideline amount.

GUIDELINE MODELS

According to the records, guideline models were generally not considered by reviewers. When considered, states usually recommended that the current model be kept. Of the two states which recommended changes only one adopted the change.

AVAILABLE INCOME

In deliberating factors which determined the income available for support, reviewers considered who might owe support, how long child support should be owed, and issues regarding parent income.

AVAILABLE INCOME: WHO PAYS AND HOW LONG

Review committees discussed the question of who might have an obligation to pay child support. Deliberation centered on the obligations of the custodial parent, either parent's new spouse or partner, and the child's grandparents. Reviewers had mixed recommendations regarding whether and how the custodial parent income would figure into the determination of child support, but generally rejected the idea of including new spouse income and were unable to decide whether to designate grandparents as obligors.

Another review issue was the termination of child support. Some reviews focus on age-related termination. Other recommendations allowed extensions of support if the child was still in high school or post-secondary school or if the child was mentally ill or physically disabled.

AVAILABLE INCOME: DETERMINATION OF INCOME

One of the first steps in any child support case is the determination of income. State guideline reviewers devoted considerable time to issues regarding parent income. Key income determinations issues included (1) the use of net or gross income, (2) the definition of income; (3) the verification of income; and (4) adjustments to income.

The use of net versus gross was a popular issue. While the states were split, in reality there was little difference between the two positions, as most definitions of gross income allowed some kinds of adjustments. In defining income, review teams considered whether means-tested and other assistance monies should be included as income. They agreed that AFDC benefits would not be considered as income, but reached different conclusions about other forms of assistance. Committees also determined how to assess incomes of self-employed parents and military personnel.

Committees also considered the inclusion of monies derived from second jobs, overtime, or bonuses. They generally concluded that second job earnings be included as income; in some states that decision would be conditioned on the point at which the party took the job and the reasons for taking it. They generallyrecommended that overtime be left to the discretion of the decision-maker, and bonuses be included.

A number of reviewers considered the issue of imputation of income. The teams tended to agree that income should be imputed when a parent is voluntarily under-or unemployed. The usual treatment was that underemployment referred to situations when the partner's job was not consistent with the level of education, skills, or experience. They further determined conditions under which income should be attributed, the level at which imputation income should be set, and exceptions that would permit a parent to avoid the imputation of income.

In a related matter, one state studied verification of income and expressed concern over the inadequacy of verification.

Some reviewers considered income adjustments for child-rearing costs, and how to allocate these costs. Income-adjustment factors included child care expenses, medical insurance premiums, extraordinary medical expenses, and post-secondary education costs. Many teams recommended that they be handled as "above the line" income adjustments which occur prior to the calculation of the child support obligation. Alternatively they recommended that some of these expenses be handled as "below-the-line" adjustments, discussed below. Other issues pertaining to these matters were allocation of expenses and method of payment.

They also considered other income-related issues such as federal and/or state income tax withholdings, alimony and other child support obligations.

APPLICATION OF GUIDELINE

In considering issues related to the application of guidelines, reviewers discussed matters such as the particular income levels to which guidelines apply, whether the guidelines were generally adequate to meet children's basic needs at different ages, how guidelines manage various custody and care schemes, guideline treatment of other family-related situations, and the inclusion of certain items in the basic child support amount versus treatment as an add-on to the basic award.

Reviewers discussed the particular income levels to which guidelines apply, and recommended self-support reserves and minimum support obligations for low income obligors and income or award caps for high income obligors. They considered how to incorporate children's basic needs, and whether the support amount should vary with age.

Review teams considered several issues relating to custody and multiple families. They discussed the definitions of normal visitation and extended visitation and whether or not and by how much to abate the obligor's support award during such periods. Recommendations for joint or shared custody situations were generally either to incorporate a joint custody calculation method into the state guideline or to leave the matter to the discretion of the decision-maker. States which dealt with split custody in their reviews considered the procedures for calculating support in such cases and technical factors, such as the types of worksheets to be completed. State custody issues were handled both by distinguishing cases according to thenumber of children in state custody and by treating all foster care cases as multiple family cases.

Recommendations for multiple family issues included incorporating subsequent families as well as prior families into guideline formulae and allowing for deviations at the discretion of the decision-maker.

Review committees considered a number of below-the-line adjustments to the basic award amount in the form of add-ons to, or deviations from the guideline amount. Factors to be treated in this way included child care costs, health insurance premiums, costs of and the definition of uninsured health care, and costs of post-secondary education. These were handled either as above-the-line income adjusters, as discussed above, or as below-the-line award adjustments. Allocation of these expenses to the parties and method of payment were also addressed.

ADMINISTRATIVE ISSUES

In addition to factors affecting the child support amount, reviewers considered administrative issues. These included obligee accountability, the role of child support guidelines in the modification of awards, automatic award adjustments to handle cost-of-living increases, retroactive child support, support enforcement and arrears. They also considered the related topic of spousal support.

RECOMMENDATIONS

149States should have a broad representation of interests on the guidelines review board;

149At the time of the review, states should do a case survey of the application of guidelines, and find out where the significant deviations occur, and take steps to reduce such deviations where desirable;

149At the time of guideline reviews, states should review changes on the costs of raising children since the previous guidelines were adopted and adjust guidelines accordingly.