PART 1:SUMMARY OF STATE GUIDELINE REVIEW PROCESSES AND OUTCOMES

In 1994 the U.S. Department of Health and Human Services' (HHS') Office of Child Support Enforcement (OCSE) engaged CSR, Incorporated, and the American Bar Association (ABA) Center on Children and the Law to study the impact and operation of State child support guidelines. These groups analyzed child support guideline formulation and application, deviations from State guidelines, documentation of guideline decisions, and guideline review requirements and procedures. [ Statement of Work for Evaluation of Child Support Guideline Project (undated).]

This report analyzes State reviews of their child support guidelines. [ State data on guideline deviations are fully addressed in a separate report; therefore, the topic is only briefly included here.] While the scope of this report is limited151its findings are based solely on the documents forwarded to the ABA by each State and are supplemented only minimally by the independent knowledge and/or research of the authors151it presents a wealth of information about (1) how State guideline reviews are conducted, (2) the range of substantive issues considered and recommendations made during reviews, and (3) the implementation of review body recommendations.

BACKGROUND

The Family Support Act of 1988 (Public Law 100-485) allows States to receive funding under Title IV-D of the Social Security Act (hereafter referred to as "IV-D"), if they meet certain requirements. One condition is that the State must "establish one set of guidelines by law or by judicial or administrative action for setting and modifying child support award amounts within the State." [ 45 CFR 302.56(a); 42 U.S.C. 667(a).]

Congress took a three-pronged approach to its child support guideline requirement: (1) a single, statewide approach was supposed to result in greater consistency within each State (i.e., cases with similar facts should produce similar orders); (2) with a standard approach to setting orders, Congress expected the entire child support process to become more efficient, and if people could better predict their child support obligations before a hearing, they would have more incentive to enter voluntary settlements151an outcome that would decrease the rate of time-consuming contested cases;and (3) Congress anticipated that because a State's guideline would be based on child-rearing data, child support orders would better reflect the actual costs of raising children. [ Williams, " An Overview of Child Support Guidelines in the United States, " in Child Support Guidelines: The Next Generation (M. Haynes ed. 1994), p. 1.]

Congress gave States a basic framework for their child support guidelines. At a minimum, guidelines were designed to do the following:

183Consider all earnings and income of the noncustodial parent (NCP);

183Be based on specific descriptive and numeric criteria;

183Compute an actual child support amount;

183Be used in both judicial and administrative proceedings;

183Be a rebuttable presumption of the correct level of support for a child under the particular circumstances; and

183Provide for a child's health care needs by means of health insurance coverage or another arrangement. [ 45 CFR 302.56 © and (f).]

Congress also recognized that the world is not static. For instance, orders that were adequate to meet children's needs in 1990 might be too small in 1995 because of cost-of-living changes within a State. Social changes also may affect a State's guidelines. For example, the incidence of multiple families was far greater in 1990 than in 1995. Thus, it is likely that guidelines in effect in 1990 either did not address this issue at all or addressed it in a cursory manner only.

To ensure the continued effectiveness of guidelines, States would have to evaluate them periodically. Congress sought to guarantee guideline review by requiring an evaluation at least once every 4 years. If the guideline review indicated the need for change, the State was to amend its guideline accordingly. [ Id . at 302.56(f).] During these reviews, States were to examine the structure and use of their guideline formulae as well as to "consider economic data on the cost of raising children and analyze case data, gathered through sampling or other methods, on the application of, and deviations from, the guidelines." [ 45 CFR 302.56(h). See generally 45 CFR 302.56(a).]

METHODOLOGY

The first section of this report addresses the ABA process for evaluating State reviews of child support guidelines. It is divided into three subsections: data collection, the responses, and data selection.

Data Collection

In December 1994, Judge David Gray Ross, Deputy Director of OCSE, wrote to the Child Support Director of each State, the District of Columbia, and the U.S. territories (collectively, "the States" or "the jurisdictions") and outlined the Guideline Evaluation Project. [ A copy of Judge Ross' letter appears as Appendix 1.] He asked each State to inform the ABA about their guideline reviews since the effective date of the Family Support Act's guideline review mandate. Specifically, each State was asked to send the following:

183Information concerning the number of guideline reviews undertaken since October 13, 1989;

183A summary of the State's review process (e.g., hearings, advisory committees, case studies, case data compilations, judicial reviews, and child-rearing cost studies);

183All guideline review reports;

183A summary of the action taken as a result of the review(s); and

183Information about upcoming reviews.

Some States responded immediately with some or all of the requested materials. To obtain information from other States, the ABA supplemented Judge Ross' letter with a telephone campaign. ABA callers frequently contacted the State child support director; the State's review team leader, if one had been identified; the State's chief justice; and/or personal contacts within the child support community to renew the request for data. While many responded to these supplemental contacts, some jurisdictions failed to provide any of the requested information in writing. A total of 49 of 55 jurisdictions provided some form of written response. [ A full listing of the jurisdictions, their designated contact people, and the materials submitted to the ABA appears in Appendixes 2, 3, and 4.]

The Responses

The format and content of the State responses varied greatly. States sent formal guideline review reports, committee minutes, consultant reports,summary letters with differing degrees of detail, workshop notes, and/or the guidelines themselves. These materials often provided the information that Judge Ross requested. When there were obvious omissions, ABA staff attempted to reach State contacts for supplemental information. [ The ABA limited its analysis to the materials sent by the State. Staff did not set out to examine each State's materials for accuracy or completeness. However, as stated above, when there was no information, a response that was clearly partial or insufficient, or a package without deviation information, staff attempted to secure additional responses from the state. Staff did not correct or supplement State materials through independent research.] However, supplemental efforts were not always successful. Thus, the uneven quality of State responses yields a report with very different levels of detail by State.

Data Selection

The States varied greatly in how and when they evaluated their child support guidelines. For this reason, ABA staff had to set criteria for selecting what would constitute a review for this report. Two questions were asked:

183Was the process conducted after October 1989, the Family Support Act's effective date?

183Was the evaluation complete? Did it result in recommendations about the State child support guideline? [ It was not necessary at this point to know whether the State actually implemented its reviewers' recommendations. The final outcome was not vital to determining the completeness of the State review.]

ABA staff measured each State's responses against these criteria. Of the 49 responding jurisdictions, 45 had at least one completed review since October 1989. [ A listing of the States and their reported review schedules appears in Appendix 5.] The four remaining States reported that they had either an established review schedule or a review in progress. However, information about partially completed reviews is omitted here.

THE STATE GUIDELINE REVIEW PROCESSES

Before analyzing the substance of the guideline reviews, the ABA examined the many ways in which States performed reviews. The sections that follow discuss this aspect of State guideline reviews.

Reviewing Entities

States officially gave the guideline review task to a variety of people or entities. [ A listing of guideline reviewers by State appears in Appendix 6.] The general pattern involved a responsible review body, such as the State court. That entity, in turn, often contracted with an expert, relegated the review duty to subcommittees, or convened an advisory panel to study the State guideline.

State IV-D agencies and the courts were the most frequent guideline reviewers. Some statutes empowered governors to convene independent guideline review commissions, consisting of representatives from the child support community and the public. A few States left the function to their legislatures. Some State guideline reviewers either did not fit into any of the above categories or could not be identified from the submitted materials.

It is interesting to note that States often limited the authority of their review bodies. Many reviewers could recommend changes, but they could not alter the statutes or court rules to implement their suggestions. For example, when a guideline appears in State law, but the IV-D agency is the designated reviewer, the IV-D agency can suggest changes, but only members of the State's executive branch have the authority to alter the statute.

One type of review body did not perform better than another. An analysis of State materials does not support a performance comparison by team composition. Rather, the success of a State's review depended more on the time and/or resources committed to the effort and the receptivity of the responsible State authority to its reviewers' recommendations.

While performance comparisons do not seem appropriate, the materials demonstrate that review committee composition does have an impact on the issues discussed. For example, groups with parent involvement may be more practical. They frequently provided details on issues of importance to the individual parties in a child support case, such as the sufficiency of awards under the guideline, income identification, enforcement, and the connection between visitation and support. IV-D-based committees often deal with the more mechanical aspects of the guidelines, such as award computation or the use of accompanying worksheets or forms. Similarly, committees dominated by judges and/or attorneys often focus on issues that arise in contested cases, such as deviation factors or income sources, levels, and imputation.

Review Methods

The Federal Government set only two requirements for State guideline reviews. Every 4 years, States must (1) analyze case data related to theapplication of and deviations from the guidelines and (2) consider economic data related to the cost of raising children. [ 45 CFR 302.56(h).] Despite such minimal requirements, roughly one-half of the responding States either did not follow or did not cite these required review methods. [ Appendix 7 regarding State references to cost of child-rearing studies and deviation case data analyses in their materials.]

Even though Federal requirements were not always followed, States used a variety of methods to gather information for their reviews. [ Appendix 7 outlines the most frequently used review methods. Note that this table is prepared only from the materials that States forwarded to the ABA. It may not reflect all methods employed by a State. Furthermore, some States took actions that fit into more than one category. For example, a State may have secured an expert, who then prepared a report on statewide child-rearing costs or who conducted a judicial survey. Whenever an activity crossed categories, it was included in each applicable column.] They considered case studies, child-rearing cost analyses, surveys, public hearings, written comments, special presentations to review committees, and expert research.

Once reviewers gathered information from the field, it was analyzed in light of the relevant statutes, regulations, court rules, administrative procedures, State and local practice, and public perception. This provided reviewers with an understanding of the history, rationale, and structure of the guideline. It also gave them insight about whether and how to alter the guidelines.

STATE GUIDELINE REVIEW TOPICS

State guideline reviewers grappled with a wide range of topics related to the use of guidelines, general appropriateness of the State's guideline model, adequacy of awards generated by the guideline, determination of income available for support purposes, guideline application to special circumstances, and similar matters. This discussion outlines some State deliberations and outcomes.

Child-Rearing Costs

One Federal requirement called for States to consider economic data related to the cost of raising children. [ 45 CFR 302.56(h).] From the documentation submitted to the ABA, the conclusion is that fewer than one-half of the responding jurisdictions complied with this Federal mandate. [ It is not clear how many of the remaining States actually failed to conduct this analysis and how many simply neglected to send or reference the appropriate documents in the packets sent to the ABA.] It is possible to makesome general comments about States that submitted child-rearing information.

First, States generally conducted their child-rearing cost analyses in one of two ways: (1) studies performed by the reviewers themselves, which usually took a national bent, including scholarly studies of national trends and concerns or Federal Government child-rearing cost reports. Several States fit this mold. For example, Alaska's principal resource in 1993 was a report by Maureen A. Pirog-Good, then a visiting professor at the University of Wisconsin-Madison, titled Child Support Guidelines and the Economic Well-Being of Our Nation's Children. [ The Arizona study included the U.S. Poverty Guideline, the U.S. Department of Agriculture's 1987 Consumer Expenditure Survey , and the Espenshade report funded by the National Institutes for Child Health and Human Development.] In 1994 Delaware utilized three primary sources of child-rearing information151the U.S. Census Bureau's report, Poverty in the United States: 1992; the U.S. Department of Agriculture's Expenditures on a Child by Families, 1993; and a recent Policy Studies Incorporated (PSI) economic analysis of the Ohio income shares child support model. Massachusetts' reviewers also cited a Federal source, the U.S. Bureau of Labor Statistics' data on the cost of raising a family in the geographic location encompassing Massachusetts. However, reviewers specifically pinpointed the data relevant to the Boston Metropolitan area to perform the analysis.

Other States hired experts to conduct a more State-specific analysis of the existing reports and data related to the cost of raising children. For example, the Arkansas Institute for Economic Advancement prepared an analysis, titled Child Support and the Cost of Raising Children in Arkansas. The Illinois Department of Public Aid contracted with Andrea Beller from the University of Illinois at Urbana-Champaign to produce "An Analysis of Child Support Guidelines and Costs of Raising Children." PSI performed State-specific child-rearing cost studies for Vermont, and that State's reviewers brought in State experts to help them interpret the report in ways that were relevant to their State.

Second, some State materials identified limitations to the child-rearing cost information supplied to them. For example, some of the expenditure levels represented average amounts spent by intact families and failed to include costs for single-parent households. [ Arkansas Institute for Economic Advancement, Child Support and the Cost of Raising Children in Arkansas (February 1993), p. 3; hereafter referred to as the " Arkansas Report. "] In addition, household expenditures on children were difficult to track at times. While experts could determine certain costs directly related to children (e.g., child care, medical treatment, and education), there were other normal expenditures (e.g., transportationand housing) that were easily apportioned between family members. [See e.g., Arkansas Report, supra, at p. 4; PSI, " Briefing Materials Related to Child Support Guidelines " (prepared for the Tennessee Department of Human Services) (September 1993), p. 2, hereafter referred to as the " Tennessee Briefing. "] Some of the data omitted other major cost categories, such as child care, postsecondary education, and medical insurance. [ Arkansas Report, supra , at p. 4.] In other cases, State- or region-specific expense levels were not available for reviewers. Several review teams only had access to dated expenditure information. [ Id .] Each of these factors made an impact on the weight reviewers accorded these analyses.Finally, the States reported similar goals for their child-rearing cost studies. In addition to performing these studies to meet Federal requirements, reviewers attempted to produce awards that were consistent with average child-rearing costs. To do this, they typically compared the child-rearing information to average child support awards to decide whether use of the guidelines minimizes "the economic impact on the child of a family breakup and [entitles] the child to a standard of living that is equivalent to that of the more affluent parent." [ Massachusetts Department of Revenue, Report on the Child Support Guidelines (September 1993), p. 6, hereafter referred to as the " Massachusetts Report. "] These analyses produced different results. A number of State review teams concluded that their guidelines performed as planned. States such as Maryland, New Hampshire, and New York found that their guidelines generally produced awards that met average child-rearing costs. [ Letter from Department of Human Resources Secretary to Speaker of the Maryland House of Delegates (December 11, 1992), p. 2; New Hampshire Department of Health and Human Services, Report on the Impact of Child Support Guidelines in New Hampshire (March 1992), p. 4, hereafter referred to as the " New Hampshire Report " ; State University of New York at Albany, New York State Child Support Standards Act: Evaluation Project Report 1993 , p. xvii, hereafter referred to as the " New York Report. "] In New York, however, this finding was contingent upon the exclusion of child care costs151a large cost for many parents. [ New York Report, supra , at p. xvii.] Cost-of-care studies caused several other States to reevaluate their child support guideline structures because they found that children's needs were not being met. For example, in 1994 North Carolina reviewers recommended a guideline change to reflect new economic data on child-rearing expenses, and the State legislature enacted the recommendation. [ PSI, Economic Basis for Updated Child Support Schedule: State of North Carolina (November 24, 1993), pp. 4 – 5, hereafter referred to as the " North Carolina Report " ); memorandum from Barry G. Burger, North Carolina Child Support Enforcement, to Margaret Campbell Haynes, ABA (December 19, 1994).] The Utah committee also encouraged a child support schedule increase of between 10 and 15 percent to more adequately meet child-rearing costs; however, there is no indication that this team's recommendation was instituted. [ Child Support Guideline Advisory Committee 1993 Report to the Utah Legislature , p. 3, hereafter referred to as the " Utah Report. "] Proposed formula increases in South Dakota also were rejected. In 1990 and 1992, experts advocated child support schedule updates that would reflect changes in the Consumer Price Index. The Department of Social Services (the formal review entity) disagreed with this alteration because it was not in the Department's report to the State guideline authority in either year. [ Letter from PSI to South Dakota Child Support Enforcement Program Administrator (June 26, 1990), hereafter referred to as the " 1990 South Dakota Expert Recommendations " ); letter from PSI to South Dakota Child Support Enforcement Program Administrator (December 21, 1992), hereafter referred to as the " 1992 South Dakota Expert Recommendations " ); letter from Terry Walter, Child Support Administrator, to Margaret Campbell Haynes, ABA (December 20, 1994), p. 1.] The 1991 Illinois reviewers had several resources finding that its guideline levels were insufficient to meet costs of care. In fact, the team cited a Women's Legal Defense Fund ranking of States in which Illinois placed 44th for average child support guideline award amounts. [ Improving Child Support Awards: Summary Report of the Guidelines Subcommittee of the Illinois Department of Public Aid's Child Support Advisory Committee (October 1991), p. 11, hereafter referred to as the " Illinois Report. "] While the committee recommended an increase, it realized that its compromise increase still underestimated child-rearing levels because the new figures were based on a study of intact and not dual household expenses. Without rationale, the materials indicate that the legislature rejected the committee's recommended increase. Guideline Models

Only a few State reviews reported consideration of the particular guideline model (i.e., income shares, Melson, or percentage of income). It is unclear exactly how many State committees deliberated about guideline methods, but review reports do not tend to mention this topic.

State review teams generally focused on whether the particular guideline model yields adequate, equitable, and consistent orders. These examinations produced different results. For example, several Statesdecided to keep the existing model. Illinois' committee could not reach agreement about the proper guideline model. The majority favored maintaining the State's percentage of income approach, while others advocated for a change to income shares. Eventually a decision was made to follow the majority opinion because the committee viewed income shares as simple to implement and effective. They found that their model and income shares produced similar awards. [ Illinois Report, supra , at pp. 1 – 3.]

Ohio reviewers also recommended continued use of the income shares model. They concluded that it safeguarded children's right to have comparable standards of living in intact and single-parent families. Further, they felt that income shares ensured that both parents would be obligated to support the child and that they would do so in proportion to their combined income. The legislature agreed with the committee. [ Report of the Ohio Department of Human Services to the General Assembly on Its Review of the Child Support Guidelines (March 1, 1993), p. 6, hereafter referred to as the " Ohio Report " ; letter from Cynthia G. Lucas, Office of Child Support Enforcement, to June Mickens, ABA (May 8, 1995), p. 1.] The Wisconsin percentage-of-income model is the basis for Nevada's guideline. Nevada reviewers studied the guideline model and also rejected a change. They reached this decision after finding that even if the State's children received insufficient support, based on the State's ranking for average child support awards, they were not significantly worse off than children nationally. Therefore, the formula was unchanged. [ Nevada State Bar, Family Law Section, Child Support Guideline Review Committee Report (August 1, 1992), pp. 59 – 60, hereafter referred to as the " Nevada Report. "] Only Montana and North Dakota reported that their committees recommended a change of guideline formula as a result of review processes. [ Staff has independent knowledge that North Carolina changed from a percentage of income to an income shares model during the period included in this report. However, because this information is not reflected in the materials submitted to the ABA, it is not clear whether the model change occurred as a result of a formal guideline review or as a part of some other process.] Montana adopted the Melson formula following its 1991 review. [ Telephone Conversation between Mary Ann Wellbank, Administrator, Department of Social and Rehabilitation Services, Child Support Enforcement Division, and Margaret Campbell Haynes, ABA.] Alternatively, the North Dakota legislative committee, which conducted the first of two State reviews, advocated a change from the percentage of income to the income shares model. However, the legislature as a whole defeated this recommendation, and the State maintained its existing guideline. [ Letter from Barbara Holzer, Child Support Enforcement, to Margaret Campbell Haynes, ABA (December 16, 1994), p. 1.] Who Owes Child Support

When discussing the calculation of support under guidelines, it is important to consider whose income will be measured in the support calculation. Four categories of potential income providers typically appear in State review materials: (1) the NCP, (2) the custodial parent (CP), (3) the parent's new spouse or partner, and (4) the child's grandparents. Discussion of the NCP's obligation to provide support is omitted because none of the review teams questioned NCPs. However, the obligation of the other categories was an issue for many review teams, and a summary of State review comments follows.

Custodial Parents

A few review committees considered whether and how CP income would play a role in child support guidelines. While CP income is directly or indirectly a part of all guideline models, some reviewers felt that the topic still warranted discussion. For example, in New Hampshire151an income shares State151reviewers said that "both parents should share the responsibility for the support of their children. Accordingly, the current guideline formula consider[s] the income of both parents in the calculation of the support award." [ New Hampshire Report, supra, at p. 8.] The reviewers confirmed that in some situations CP resources would have little effect on the obligor's order: "The support award amount for a noncustodial parent earning $25,000 per year, for example, is essentially the same...whether the custodial parent earns nothing, $15,000, or $25,000 per year." [ Id. at p. 14.]

The Tennessee review resulted in the addition of a new provision on CP income. In this percentage-of-income State, there was a guideline amendment after review so that obligee income would be excluded in both the guideline award calculation and deviation. This was the result of a presumption that the obligee would expend "at least an equal percentage of net income as that of the obligor for the support of the children for whom support is sought." [ Rulemaking Hearing Rules of the Tennessee Department of Human Services, Child Support Division, Chapter 1240-2-4 (September 1994 amendments) citing 1240-2-4-.03(2), p. 3, hereafter referred to as the " Tennessee Rulemaking Hearing Rules. "] CP income was viewed differently by reviewers in Colorado, another income shares State. During the 1990 review, the committee noted that the guideline permitted a low-income obligor's child support order to be increased solely because of a rise in the obligee's income. The review committee agreed with commenters that such an outcome was not equitable. To resolve the matter, the committee contemplated a "quick fix" solution toprohibit such increases for obligors whose incomes had remained constant despite a general increase in the combined income figure. Committee members ultimately rejected the proposed solution because it would result in inconsistent orders for families with similar economic circumstances151a result contrary to the original intent of the guidelines. However, because the committee could not agree on an acceptable resolution, it tabled the matter. [ Colorado Child Support Committee Report to the Governor and the General Assembly (December 1, 1990), pp. 16 – 17, hereafter referred to as the " 1990 Colorado Report. "] New Spouses

To frame the issue of new spouse income, consider the characterization of Nevada's reviewers:

This subject area presents an unfortunate collision whereby social policy and community property principles are at odds. Generally speaking, an individual is only liable for the support of his or her own children. On the other hand, Nevada law gives both parties to a marriage a "present, existing, and equal" interest in all income (or other property) acquired after marriage. At its most simple, the question is whether the income of an Obligor's new spouse increases the Obligor's "gross monthly income" against which the statutory formula should be applied, or whether a Recipient's new spouse's income can justify a reduction in support on the basis of a lessening of need, in that "the relative income" of the Recipient is higher when measured against that of the Obligor. [ Nevada Report, supra , at p. 38.]

States reached very different conclusions regarding the inclusion or exclusion of new spouse or partner income as a part of the child support matter. However, the majority of the reports preferred to exclude this income. Reviewers in Illinois generally accepted their expert's recommendation to exclude new spouse income because it can discourage remarriages. In other cases, when an obligor claims that extraordinary expenses prevent the payment of support consistent with his or her income, the trier-of-fact may consider how spousal or partner income defrays the claimed expenses. [ Illinois Report, supra, at p. 9.]

The New Mexico team reached a similar outcome. The review commission established that new spouse resources should not be included as income for the child's parent. Such earnings could be relevant for other purposes, suchas to (1) decide whether a guideline application would be unjust or inappropriate or (2) award court costs and attorneys' fees. [ Definition of Income in Commentary (October 21, 1994), p. 1, cited in 1994 New Mexico Child Support Review Committee Final Report , hereafter referred to as the " New Mexico Income Commentary — 10/21/94. "] Connecticut's committee confirmed the State rule of excluding subsequent spouses' income from child support calculations. Although the public was strongly split on the issue, reviewers held that inclusion of new spouse income unnecessarily complicates the guideline calculation, especially if that new spouse or partner has his or her own child support obligations. The committee also noted that under State law there was no legal authority to impose a support liability upon the new spouse for a child for whom he or she owes no duty of support. [ Child Support and Arrearage Guidelines (June 1, 1994), p. ix, hereafter referred to as the " 1994 Connecticut Guidelines. "] Nevada reviewers debated the treatment of new spouse income in a variety of contexts: 149A majority concluded that new spouse income should not be considered when a parent is voluntarily unemployed or underemployed, even though supported by the spouse. In such cases, the trier-of-fact should impute income to the parent based on his own earning capacity, not that of the spouse. However, the team rejected the addition of explicit language to this effect in the statute. Instead, the committee chose to leave new spouse income to the discretion of the child support decisionmaker. [ Nevada Report, supra, at p. 39.] 149Reviewers discussed whether new spouse income should be a factor in reducing the obligor's living expenses and thus in making additional money available for child support. Because a new spouse could be either a help or a burden on household income, the team took no action on this issue. [ Id . at p. 40.] 149Reviewers pondered imputing the new spouse's or partner's income to the child's parent. The committee reached a consensus that the resources of an obligor's spouse should not be considered in calculating the amount of income available for child support. Furthermore, unless an overview of household income and expenses is specifically needed to understand the obligor's ability to pay, the income of an unmarried cohabitant should not be considered. They also reached consensus regarding new spouse contributions to the obligee's household. Because such income would not decrease the child's need, they felt that it isirrelevant to an obligor's request for a downward modification of the child support award. Reviewers felt that to conclude otherwise "would be to tacitly admit that the new spouse undertook an obligation of support for the children in Recipient's household, without benefit of any right of access to or control over those children." [ Id .]

Reviewers in both Louisiana and Hawaii saw some benefit to the minority view and opted to include this income under certain conditions. Following a guideline review, the Louisiana legislature redefined "income" to include benefits a party derives from expense sharing. However, the legislature specified in determining the benefits of expense sharing that the decisionmaker should not consider the income of the new spouse, except as such income directly reduces the party's actual expenses. [ Letter from Gordon Hood, Department of Social Services, Office of Family Support, to Margaret Campbell Haynes, ABA (January 5, 1995), hereafter referred to as the " Louisiana Letter. "] In Hawaii, if a child's mother remarried, had another child, and either left work or reduced her hours to care for that new child, Hawaii's reviewers would allow the income of her new spouse to become a part of the child support calculation. Under these circumstances, the mother would be attributed with up to 50 percent of the combined gross income of herself and her new spouse. The same rule would be applied to an unmarried parent with children from a new relationship. [ Hawaii Department of the Judiciary, Family Courts, Guidelines in Determining Child Support (November 1989), p. 5, hereafter referred to as the " 1989 Hawaii Report. "] Grandparents

When a minor child has a child who bears the cost? This is an issue not considered by many child support guidelines. Review materials showed that two States151Colorado and Nevada151discussed the propriety of making grandparents' resources a part of the income calculation for child support purposes. The Colorado legislature specifically required its 1990 guideline review committee to examine two aspects of grandparent support: (1) establishing and enforcing support against grandparents until the parent reaches age 18 and (2) recovering public assistance for a dependent child (whose CP also is a minor) until that parent reaches age 18.

As a result of the study, a majority of Nevada reviewers recommended that the support obligation not be extended to grandparents. This recommendation had a three-pronged basis: [ 1990 Colorado Report, supra, at pp. 15 – 16.]

149Reviewers felt that the costs of imposing grandparent support would outweigh the benefits. It would be expensive to collect a small amount of support for a relatively short period between order establishment and the parent reaching age 18.

149The committee foresaw difficulty in drafting a fair statute given the number of components that would have to be included. They felt that at a minimum the statute would have to encompass provisions for the treatment of the following types of cases: (1) couples in which one parent is older than age 18 and the other is not, (2) the father is unknown or paternity has not been established, (3) low-income grandparents, (4) out-of-State grandparents, (5) noncustodial grandparents, and (6) the parent reaches age 18 before the establishment of the order.

149Even if a fair statute could be crafted, the reviewers were skeptical that the inclusion of grandparent income would have a real impact on any worthwhile objective. Several objectives were mentioned, including reducing teen pregnancy, recovering Aid to Families with Dependent Children (AFDC) expenditures, promoting shared grandparent support, increasing communication between parents and teens, educating teens about sexual behavior, and educating teens about family responsibility. However, there were questions, based on Wisconsin's experience, that such a law would produce the desired results.

One of Nevada's reviewers sought to connect grandparent support obligations to a State interest and prompted that team's discussion of the issue. The reviewer suggested that grandparent support could remedy the problem of "too many young people...becoming parents while they are still children themselves, creating a self-perpetuating impoverished class for which the State is forced to take financial responsibility, to the detriment of the people caught in the system and to the public generally." [ Nevada Report, supra, at p. 53.] Even though the review team seemed to have carefully considered the possibility and cited a number of accompanying legal issues, the experience of other States, and technical and policy matters, the consensus was that there was insufficient data to adequately evaluate the proposal; thus, they took no action. [ Id . at pp. 53 – 54.]

How Long Is Child Support Owed?

In practice, child support usually ends with a child's emancipation (i.e., when the child reaches the age of majority [ The age of majority is decided by each State. Often it differs by issue. For instance, the age of majority may be set at 18 for child support purposes but at 21 for the consumption of alcoholic beverages. Generally, however, for child support purposes it ranges from ages 18 to 23.] or achieves some designated circumstance, such as marriage, full-time employment, or enlistment in the military). Guidelines do not always clearly reflect State practice, however, which can cause confusion and inconsistency. Accordingly, a number of State guideline review teams discussed clarifying the term of the support obligation.

Guideline reviews focused on age-related or education-related termination rather than other emancipation events. In Alaska, reviewers recommended the continued termination of support at age 18. The Nevada committee recommended the termination of support after the child's 18th birthday or high school graduation, whichever occurred later. Age 19, however, was imposed as an absolute end of support, even if the child had not yet graduated from high school. A similar recommendation was made by Utah reviewers. In that State, support could extend beyond age 18, but only until the date of a normal, expected high school graduation.

In their 1991 report, Colorado reviewers recommended termination of support at age 18. An extension of support beyond the child's 18th birthday could be granted if the child was mentally ill or physically disabled; the child was still in high school, but only through age 21; or the child was pursuing postsecondary education, but only through age 23. Reviewers recommended in these instances that support also should include medical insurance. The legislature ultimately adopted language allowing termination of child support at age 19, subject to the three extension criteria. With respect to postsecondary education, however, an extension of support was permitted only through age 21 rather than the recommended age of 23. [ For a discussion of how support for postsecondary education is calculated, see pp. 80 – 81, infra .]

Determining the Income Available for Child Support

The determination of available income is an essential step in the process of reaching a child support award amount. Before any guideline formula can be applied, the income sources of one or both parents must be identified. The decisionmaker must decide how much of these amounts are to be used to meet the needs of the particular child or children. [ The particular State guideline formula will designate whether the incomes of both parents are to be considered or whether only obligor income is necessary for the support calculation. Some of the same issues may be considered by States as they determine income and make decisions about deviations from basic support awards. Income determination is an "above-the-line" step and the identification of appropriate deviation criteria is a "below-the-line" step.] State guidelinereviewers devoted a great deal of time to income determination issues. This discussion highlights State deliberations on key income determination issues.

Net Versus Gross Income

The choice between net and gross income, [ Simply stated, gross income is earnings before tax deductions or other adjustments, and net income is earnings after allowable deductions.] as well as the general definition of income, [ See pp. 21 – 24, infra .] are key to the starting points for calculating child support. Although State review teams decided to use gross or net income in the State's child support guideline, as the following discussion demonstrates, there frequently is little practical distinction between the two terms.

Some States opted for a gross income standard. Illinois and Nevada fall into this category. The Nevada review report, issued in August 1992, indicates that many obligors believe that they have unrealistic child support obligations. Their first complaint was that the gross income-based guidelines caused them to pay more in support than they could afford. [ Nevada Report, supra , at p. 43.] To correct the situation, these obligors suggested that the State move to a net income calculation. Reviewers concluded that a change to a net income framework "would not result in any change at all to the actual dollar sum of support orders." [ Id. at p. 44.] They reasoned that the State's child support laws were based on three underlying factors: maintenance of a particular standard of living, income sharing, and the satisfaction of children's needs. Assuming that these factors remain constant, irrespective of the income designation used, the mere change from a gross income-based to a net-based formula would not automatically produce a downward change in support obligations.

Obligors also made a second assertion: Since the State's gross-based formula failed to consider certain relevant facts, which were accounted for by different statutory schemes, it generally yielded higher results for Nevada obligors. However, reviewers again declined to recommend change to a net-based formula. The committee cited the 1990 Women's Legal Defense Fund survey of State child support data. According to that data, awards in Nevada were typically near the national average in the studied categories and were not higher, as obligors contended. Therefore, there wasno evidence of a formula-based imbalance in the support obligations of Nevada NCPs.

Nevada's guideline history also provided reason for retention of the gross income standard. The original guideline commission believed that a net-based system would create inequity between similarly situated individuals by permitting arbitrary choices as to income inclusions and exclusions. Reviewers also restated the original guideline commission's finding that gross income-based formulas are prized for their simplicity:

For every layer of complexity added to the statute that yields guideline support, a certain increased expense is added to the cost of being in the court system and is paid by every litigant in terms of time and attorney's fees. Additionally, the entire public pays for those complexities by paying the salaries of the public servants who must spend more time on each case to calculate support under the more complex guideline. [ Id. at p. 45.]

The 1993 version of Nevada's guideline statute establishes the support obligation according to gross income figures; [ Nev. Rev. Stat. 125B.070(1)(a).] thus, the reviewers' 1992 recommendation appears to have been accepted. However, as outlined further in the next section of this report, the statute modifies the traditional definition of gross income. [ See pp. 21 – 22, infra .]

The Illinois expert also cited equity between similarly situated parents in support of the recommendation that gross income serve as the basis for support awards. [ Illinois Report, supra , at p. 4. From proposed legislation (Amendment to House Bill 1351; this legislation was not passed) based on the committee's recommendations, it appears that a net income basis was being used at the time of the review.] Gross income was found to offer the highest level of equity between parents when establishing support. "Even though the argument has been made that net income better reflects a parent's ability to pay, net income will vary depending upon the tax deductions available to each parent, and these may differ between parents." [ Id .]

Illinois' review committee basically agreed with the expert opinion that the inconsistencies between parents, associated with net income-based formulas, made a gross income standard more desirable. However, like their Nevada counterparts, Illinois reviewers also felt that a strict application of gross income was inappropriate and recommended several adjustments beforearriving at the income figure that would be used to calculate the child support obligation.

Unlike Illinois and Nevada, Connecticut favored a net income-based formula. [ State of Connecticut Child Support Guidelines (January 1991), p. 5, hereafter referred to as the " 1991 Connecticut Guidelines. "] The State's review committee cited three reasons for recommending the retention of this standard: 149The net income approach seemed to be working well in the State.151Even though there were other States using the gross income standard, and there were recognized advantages to that method, the committee did not find that the apparent benefits warranted abandonment of their chosen approach until additional study could be conducted. 149The guideline tables were based on the net income standard.151They rejected a suggestion to alter the tables prior to studying the exact effect of the gross income standard. 149Reviewers perceived a possible problem for low-income obligors with the adoption of a gross income approach.151They seemed concerned, due to mandatory deductions from the disposable income of low-income obligors, that the conversion to a gross income approach would leave these obligors with insufficient money to survive. The State legislature seems to have accepted this recommendation. The Definition of Income

Most State guideline reviews considered how income would be defined. Some review teams set very general income factors. Others analyzed whether money derived from particular sources should be made income for child support purposes. The first part of this discussion focuses on State deliberations of the general meaning of income, and the second part considers State treatment of several of the specific factors affecting income.

General Definition of Income

As noted in the gross versus net income discussion above, reviewers in both Illinois and Nevada opted for a gross-income basis but allowed modifications to be made to the obligor's actual gross income to arrive at what could be best labeled as an "adjusted gross." For example, the Illinois committee recommended adjustments for other child support obligations, the child's health insurance premiums, and professional fees required as a condition of employment. [ Illinois Report, supra , at pp. 4 – 5.] Gross income was defined by Nevada as "the total amount of income from any source of a wage-earning employee or the gross incomefrom any source of a self-employed person, after deduction of all legitimate business expenses, but without deduction for personal income taxes, contributions for retirement benefits, contributions to a pension or for any other personal expenses." [ Nev. Rev. Stat. 125B.070(1)(a).]

In 1991 Connecticut's reviewers recommended a net income standard and arrived at a parent's net income by "subtracting mandatory deductions and special exemptions from the parent's gross income." [ 1991 Connecticut Report, supra, at p. 11. In 1994 regulations were promulgated, which simplified the calculation process by establishing a single list of permissible deductions from income. 1994 Connecticut Report, supra , at p. ix.] Among the State-authorized mandatory deductions were Federal income taxes with all allowable exemptions; [ This deduction was continued in 1994; however, an additional deduction was established for State and local taxes. Since 1991 the State had instituted a State income tax, and the commission suggested an allowance for local taxes paid by persons living in those areas that levied such a tax. 1994 Connecticut Report, supra , at p. ix.] Social Security tax; retirement plan deductions; [ A deduction for Social Security taxes remained in effect, according to the 1994 Connecticut Report. However, to promote the equitable treatment of parents with vastly different pension plans, the separate deduction for mandatory retirement plans was eliminated. Specifically, this action was taken to prevent parents who are subject to Social Security withholding from also claiming a deduction for another retirement contribution. Id .] union dues or fees; group life insurance premiums; medical, hospital, dental, or health insurance premiums for all legal dependents; and legitimate business expenses of the self-employed. Reviewers also permitted special exemptions for costs attributed to unreimbursed child care for an employed parent and other child support orders for which there was verified payment. Gross income was defined as parent's weekly income before deductions, including the following:

183Salary and wages, including overtime;

183Commissions;

183Bonuses;

183Tips and perquisites;

183Rental income;

183Estate or trust income;

183Royalties;

183Interest, dividends, and annuities;

183Social Security or supplemental security income (SSI);

183Veterans' benefits, unemployment compensation, workers' compensation, retirement, pension, and other benefits;

183Proceeds from contractual agreements;

183Self-employment earnings;

183Alimony and other unearned income; and

183In-kind compensation (any basic maintenance or special need such as food, shelter, or transportation provided on a recurrent basis in lieu of salary). [ Id. at p. 10.]

The West Virginia materials indicate that proposed rules regarding the definition of income contained some of the most significant changes to the guidelines recommended by reviewers. [ Johnson, R.J., The Proposed Child Support Guidelines (outline for presentation at a West Virginia University College of Law Continuing Education program, September 3 and 4, 1993), p. 1, hereafter referred to as the " West Virginia Proposed Guidelines. " This material does not provide the prereview definition of income, nor does it note whether the proposed rule was ever promulgated.] Under the proposed rules, to calculate gross income of either parent, one should consider the following:183Wages, salary, commissions, and other income due to the parent from his or her employer;

183Payments made from profit sharing or pension plans, insurance contracts, or annuities;

183Social Security, unemployment compensation, workers' compensation, or supplemental employment benefits;

183State lottery winnings;

183Noncash or fringe benefits or reimbursable expenses;

183Money due from a partnership, association, public or private corporation, agency (Federal, State, or local), or any legal entity indebted to the parent;

183Interest, dividends, distributions from "S" corporations, excess earnings from closely held corporations, or capital gains;

183Rental income; and

183Overtime income. [ The West Virginia materials fail to set out the specific changes to the income definition that resulted from the review. However, reviewers recommended that all income information should be presented at the time of the support calculation hearing. They also concluded that income information should be based on monthly figures, unless the court directed otherwise.]

The Washington State materials did not include the full proposed definition of income; however, comments contained in the Governor's Veto Message on SB 5120-S2 contain interesting rationale for his rejection of that proposal. [ Washington Legislative Digest and History of Bills, Veto Message on SB 5120-S2 (May 21, 1991), pp. 57 – 58, hereafter referred to as the " Washington Veto Message. "] According to the Governor, the new section on income would have eliminated consideration of all overtime, second jobs, contract-related benefits, gifts, prizes, and bonuses, unless specifically included as income by the deciding judge. He felt that the exclusion of these income sources would have resulted in a lowering of the majority of support awarded in the State. According to the Governor, there was no reason to use a definition of income that "arbitrarily excludes as a benefit for children these very real types of resources that are available to parents." [ Id .]

Income From Means-Tested and Other Assistance

One potential source of income is money that a parent receives due to her own or her child's need, status, or disability. For example, a CP may lack sufficient income to meet her child's needs and, thus, receive AFDC benefits in order to meet the needs of any children in her care. In another case, an obligor may have been severely injured on the job and, as a result, he now collects monthly disability payments. Several State review committees dealt with the issue of means-tested or other assistance. Some States decided to include, and others to exclude, such benefits as income for child support purposes.

Arkansas and Delaware reviewers recommended the inclusion on such benefits as income. In Arkansas, prior to the 1993 review, three categories of benefits were considered as income for child support: Social Security disability awards made to the recipient's spouse and/or children, workers' compensation benefits, and unemployment compensation. [ In re Child Support Guidelines (petition to revise guidelines) (filed 10/7/93), p. 2.] The guideline review added a benefit to this list: veterans' disability payments (VA [Veterans Administration] benefits). Citing Belue v. Belue, [ 38 Ark. App. 81, 828 S.W.2d 855 (1993).] the committee reasoned that "the Court of Appeals found that although VA benefits are not taxable income, when appropriate, they should be used to determinesupport. The Committee submits that the Court of Appeals' reasoning is sound, and that provision should be adopted." [ In re Child Support Guidelines, supra at p. 2.]

The report summarizing Delaware's 1990 review references Social Security benefits only. The committee stated without explanation that any such benefits paid to a child's custodian, either due to the status of the parent or the child, are to be considered income for that recipient parent. [ Family Court Judiciary, The Delaware Child Support Formula: Evaluation and Update (January 25, 1990), p. 8, hereafter referred to as the " 1990 Delaware Report. "] By 1994's review, however, the court's committee broadened the types of benefits to be included as income. The decision was to retain Social Security disability benefits and to add "those pension/disability benefits issued by private corporations, paid to a child(ren) on behalf of a disabled parent...[as a part of] the disabled parent's income for use in the child support calculation....When a child receives these benefits on his/her own behalf[,] the amount would be added to the custodial parent's income." [ Family Court Judiciary, The Delaware Child Support Formula: Evaluation and Update (August 1, 1994), p. 6, hereafter referred to as the " 1994 Delaware Report. "] This view can be contrasted with that expressed by reviewers in Connecticut, Pennsylvania, and Tennessee, who recommended against the inclusion of such benefits as income. Without detailed explanation, the Connecticut team discontinued consideration of SSI as a part of the gross income calculation. The stated rationale simply was that SSI is a means-tested Federal assistance grant. [ 1994 Connecticut Report, supra , at p. viii.] Pennsylvania materials, also without explanation, rejected the consideration of certain benefit income. Following the State's review process, AFDC was formally excluded as income to obligees. [ Letter from John F. Stuff, Pennsylvania Bureau of Child Support, to Margaret Campbell Haynes, ABA (May 2, 1995), p. 1, hereafter referred to as the " Pennsylvania Letter. "] Finally, Tennessee's income definition was amended pursuant to recommendations made in a 1993 review. The concept of "gross income" was to exclude: child support payments made to either parent for any other child and all means-tested public assistance programs otherwise excluded by Federal law or regulation, such as AFDC, Food Stamps, and SSI. [ Tennessee Rulemaking Hearing Rules, supra , p. 4.]

As these examples demonstrate, States that reviewed the inclusion of means-tested benefits as income generally recorded what the States did but not really why such action was taken. It may be that States chose toinclude such benefits to support the belief that any financial resource of a parent should be made available for the purposes of calculating her support obligation to the child. On the other hand, a State may have opted to exclude such benefits because they are scaled only to meet the basic needs of the recipient and/or of other specified individuals. Thus, these benefits would be insufficient both to cover the needs of the parent and/or another child and also to serve as a support resource for the child at issue. [ In discussing whether child support money paid on behalf of another child could be income for calculating the support of the child at issue, the Illinois committee stated that " [c]hild support income is `earmarked' for support of children in the obligor's own household. To base a child support obligation on child support income would take away from the needs of one child to meet the obligation to another. This is an undesirable outcome. " Illinois Report, supra, at p. 5.] Income From Self-Employment

Another important area for income determination is the treatment of self-employed parents. There are two basic questions to be answered in this regard: whether the monies made by self-employed parents will be considered for the purpose of calculating child support and, if so, how an appropriate figure is to be reached. State guideline review materials touch on both issues.

Although a number of States appear to have considered the first question, the materials of only one State seem to provide an actual response. New Mexico's reviewers stated specifically that "income and expenses from businesses should be carefully reviewed to determine an appropriate level of gross income available to the parent to satisfy a child support obligation." [ 1994 Child Support Commission, Final Report (October 1994), p. 3, hereafter referred to as the " New Mexico Report. " The commission further noted that the form of the business (e.g., sole proprietorship, general partnership, limited partnership, limited liability company, S-corporation, and C-corporation) should have no bearing on the level of the parent's income for child support purposes.] The question on which the State review material primarily focused concerns how to arrive at a measurable and accurate income amount in such cases.The Alaska review committee provided one alternative: amending the guideline commentary to include not only a listing of the types of proceeds to be included as "self-employment income" but also a process for determining the extent to which that income would be considered for child support purposes. The proposed language, which was approved by the State Supreme Court, provided the following:

Income from self-employment, rent, royalties, or joint ownership of a partnership or closely held corporation includes the gross receipts minus the ordinary and necessary expenses required to produce the income. Ordinary and necessary expenses do not include amounts allowable by the IRS [Internal Revenue Service] for the accelerated component of depreciation expenses, [depreciation of real estate,] investment tax credits, or any otherbusiness expenses determined by the court to be appropriate. Expense reimbursements and in-kind payments such as use of a company car, free housing or reimbursed meals should be included as income if the amount is significant and reduces living expenses. [ Memorandum from Alaska Guidelines Review Committee to the Alaska Supreme Court regarding Recommendations for Amending Alaska's Child Support Guidelines: Civil Rule 90.3 (March 17, 1994), p. 20, hereafter referred to as the " Alaska Memo — 3/17/94. "] Idaho reviewers examined, but decided not to act on, a concern regarding the inclusion of rents and business proceeds as income for parents who work together in a business. Believing that guidelines already adequately covered the matter, the committee noted that salary drawn from the business by either spouse is income for child support calculation purposes. Beyond that, one-half of the business income also would be attributable to the obligor in the computation of child support income. [ Minutes of Annual Meeting, Child Support Guidelines Committee (December 3, 1993), p. 6, hereafter referred to as the " Idaho Minutes. "] The criterion of gross receipts less ordinary and necessary business expenses appeared throughout the discussions of self-employment income. For example, Illinois reviewers reached a conclusion similar to Alaska's but made some interesting distinctions. First, they emphasized that although the IRS' permissible business deductions could serve as a guide, the individual decisionmaker may find these deductions inappropriate in the context of child support. [ Illinois Report, supra ., at p. 6.] Second, the committee specified that self-employment income should exclude extraordinary perks, even though the IRS often would permit them. Unfortunately, they did not give a rationale for this prohibition. [ Id. at p. 7.] New Mexico also distinguished ordinary and necessary expenses for income tax and child support purposes. When child support is at issue, the term would not include amounts claimed for pension contributions, profit sharing, or other retirement plans. [ To treat the parents equitably, however, if the other parent's employer funds a retirement benefit, the self- employed parent may deduct actual retirement contributions up to 10 percent of his gross income. New Mexico Report, supra, at p. 4.] Ohio reviewers also recommended the limited reduction of a self-employed parent's gross income to account for retirement contributions. The State legislature approved this provision, which would permit the self-employed party to reduce gross income by 5.6 percent or the difference between the tax rate paid by the individual and the current FICA (Federal Insurance Contributions Act) rate. [ Ohio Report, supra , at p. 12.] Also omitted from businessexpenses would be "amounts allocated to immediate family members if the parent has a controlling interest in the business" and expenses which significantly reduce personal living expenses. [ Id .]

A small number of States also considered the propriety of making property depreciation an ordinary and necessary expense and hence a deduction from self-employment income. Ohio's legislature followed the committee's recommendation to include only the "depreciation of replacement business equipment as shown on the books of the business" as such an expense. Under the prior version of the guideline, it appears that all depreciation deductions were prohibited because they would have resulted in an unfair portrayal of gross income for the child support calculation. A change in Federal tax laws allowed such depreciation to be calculated in a manner that would be less open to unfair manipulation. Furthermore, since the purchase of equipment often is critical for a business' continued ability to generate income, depreciation of such equipment is appropriate for determining income derived from that business to establish child support. [ Id. at p. 13.] However, reviewers opted against a deduction for real estate depreciation.

According to New Mexico's reviewers, depreciation expenses always should be carefully examined in child support cases, even though they ultimately recommended following tax depreciation standards. Notwithstanding this general rule, the committee recognized that there are certain situations in which the two sets of rules conflict. New Mexico's reviewers prohibited a deduction for depreciation taken on real estate. In addition, they felt that first-year bonus depreciation should be scrutinized for reasonableness. [ New Mexico Report, supra , at p. 4. Reviewers stipulated that if first-year bonus amounts were disallowed, these amounts should be considered in future years under the specific depreciation method available to the taxpayer.]

Income From Second Jobs, Overtime, and/or Bonuses

In determining the amount of income available for child support purposes, often it is necessary to consider compensation derived from overtime, second jobs, and/or bonuses. Several States addressed these issues as a part of their reviews. A summary of State debate appears in this section as well as in the discussion of multiple family situations. [ See pp. 73 – 76, infra .]

Money derived from overtime was treated differently by the States, although it seems that, in some way, each of the jurisdictions that examined this issue included these resources as income. Public concern about the guideline's failure to define overtime prompted review of this issue inColorado. By Federal regulation, child support decisionmakers must consider all of an obligor's earnings and income; accordingly, the commission recommended the inclusion of all required overtime in the gross income figure. However, to sustain some level of judicial discretion, the committee recommended that voluntary overtime and/or secondary employment would constitute reason to deviate from the guideline. [ 1991 Colorado Report, supra , at pp. 26 – 27.]

Nevada reviewers addressed the issue of overtime because of an administrative determination that had provoked a number of complaints in the State. It appears, prior to the 1992 review, that there had been no definitive decision about the inclusion of overtime in the calculation of a parent's income. An administrative decision rendered shortly before the review held that overtime compensation should be regarded as income where it is substantial and can be accurately determined. The guideline committee agreed with this sentiment. "Income is income"; therefore, its source was insignificant. Further, the committee reasoned that, in an income-sharing model, all income is presumed to be included in a child support determination. The committee considered legislation unnecessary to convey their opinion, finding that the administrative ruling offered "sufficient protection against injustice." [ Nevada Report, supra, at p. 42.]

Protection against injustice also provided the basis for the veto of a proposed income definition provision in Washington State. Explaining the veto, the Governor concluded that the proposed definition would have omitted the consideration of all overtime, second jobs, and bonuses for child support purposes. An income definition, without these and other resources, would lower most support awards in the State. The Governor felt that this would arbitrarily prevent children from accessing resources that rightfully are available to their parents. [ Washington Veto Message, supra, at p. 58.]

New Mexico's review committee extensively addressed the ways that resources from overtime, bonuses, and second jobs are to be treated. [ The materials detailed the handling of these matters but failed to address the rationale behind the process choices.] For example, overtime is divided into four categories: required, voluntary, preseparation and postseparation, and irregular. Overtime, which is frequent and which the employer historically has required, is to be included as gross income and averaged over a period of 6 to 12 months. If the overtime is voluntary, but the parent typically undertakes this work, it also should be included as gross income and averaged over a period of 6 to 12 months. Alternatively, irregular overtime, even if it produces significant compensation, should be excluded from the calculation of income; however,if the obligor is the parent at issue, that person should be required to make an additional lump sum child support payment in the month following the receipt of the overtime income. [ New Mexico Report, supra , at pp. 2 – 3. The lump sum payment would be 10 percent of the gross overtime amount for one child, 15 percent for two children, 20 percent for three children, 22 percent for four children, 24 percent for five children, and 26 percent for six or more children.] Commission members also decided that bonuses were to be generally included in the parent's gross income. The same considerations established for overtime payments were to be applied for bonus income. [ Id. at p. 1.]

The treatment of money derived from an additional job depended on the particular circumstances. According to the commission, the money made at an additional job, which the parent had prior to the determination of support, could be considered income in the same way as overtime. If the CP secured an additional job after the determination of support for one of several reasons (e.g., specifically to obtain more income for the support of the children at issue, to help support a subsequent family, or to reduce significant debt associated with the termination of the relationship with the obligee), the proceeds from that job would ordinarily not become income for the purpose of calculating child support. [ Id. at p. 3.]

Military Benefits

States report that it is often difficult to accurately determine the income of a parent who is in the military. For military personnel, salary is one part of a multifaceted benefit package that constitutes income. A small number of State reviews analyzed the way that guidelines compute income for military personnel. Arkansas and Ohio are two examples. In an effort to better explain the income packages of military personnel, Arkansas reviewers recommended the expansion of the current guideline language. Therefore, instead of simply directing child support decisionmakers to "see the latest military pay allocation chart and other benefits" and then add Basic Allowance for Quarters (BAQ), the statute was refined. [ In re Guidelines for Child Support, supra , at Exhibit A, p. 4.] While the formula still focuses on salary and/or BAQ, it requires use of the BAQ rate for which the person is actually eligible, rather than the one for which the parent has opted. In addition, under the proposed guideline, the military's variable allowance only would be considered on a case-by-case basis. There was concern that application of this resource to all cases might be inappropriate because it generally is awarded to offset extraordinary livingexpenses. [ Id .] The State guideline authority found the changes to be appropriate and enacted the recommendations.

Ohio's guideline authority approved the suggestion of the State's reviewers regarding the military pay aspects of the gross income definition. The term was amended to encompass not only base pay, but also BAQ, Basic Allowances for Subsistence, Supplemental Subsistence Allowances, cost-of-living adjustments, specialty pay, Variable Housing Allowances, and National Guard and Reserve drill pay. [ Ohio Report, supra , at pp. 13 – 14.]

Imputed or Attributed Income

A number of State reviews addressed the determination of income for unemployed or underemployed parents. Typically, States have chosen to impute or attribute income to these parents. Delaware's reviewers found the following:

Underlying the Delaware Child Support Formula is the concept that both parents are responsible for the support of their children. One of the linchpins of the formula which has enhanced the perception of its fundamental fairness and which, coincidentally, has been adopted by States as part of other formulas, is the tenet that an individual cannot by voluntary unemployment shift the burden of support to the other parent. [ 1990 Delaware Report, supra , at p. 6; see also Illinois Report, supra, at p. 8.]

Colorado presents the issue differently:

The most crucial step in the calculation of child support is the determination of income. The goals of the guidelines would be frustrated if a parent could evade the support obligation by being voluntarily unemployed or underemployed. The statute deals with this problem by providing for imputation of income to a parent who is voluntarily unemployed or underemployed based on their potential income. [ 1990 Colorado Report, p. 17.]

State review of imputed income seems to have covered three basic areas. The first involves the circumstances under which income should be attributed to a parent. The second is the level at which imputed income should be set. Third are exceptions that would permit a parent to avoid the imputation of income.

When Should Income Be Imputed?

Most State guidelines attributed some level of income to unemployed or underemployed parents. The real issue, then, is what the terms unemployed and underemployed mean for child support purposes. Reviewers in Illinois defined underemployment as any job change that substantially reduces income. [ These reviewers rejected their expert's more hard-line approach to the underemployment concept, finding it far too intrusive into the lives of divorced parents. Instead of approving an attribution of income for any reduction of income, the committee preferred the " substantial reduction " standard noted above.] A finding of underemployment would constitute a rebuttable presumption that the parent's actions were precipitated by an intent to avoid child support. [ Illinois Report, supra , at pp. 8 – 9.] Similarly, North Dakota reviewers defined underemployed parent as one whose gross income from earnings is significantly less than the earnings of people with similar work history and occupational qualifications in the obligor's community. [ Amendments to Chapter 75-02-04.1, North Dakota Child Support Guidelines (undated), p. 19 (proposed 75 - 02-04.1-07(1)(b)), hereafter referred to as the " Proposed North Dakota Guidelines. "] They quantified the term substantial as gross earnings income that is less than 6/10 of the prevailing amount for those with a similar background in the obligor's community. [ Id. (75-02-04.1-07(2)).] The guideline commission in New Mexico based its explanation of unemployment and underemployment on the voluntariness of the action. When the parent has achieved a particular employment status voluntarily, income would be imputed; however, when the status is imposed upon the parent, income generally would not be attributed. [ Definition of Income Statute and Commentary (undated), pp. 1 – 2, cited in New Mexico Report, supra, hereafter referred to as the " New Mexico Commentary — undated. " If income is imputed to a parent, the appropriate portion of any child care expenses also should be attributed to the parent.] The report went on to describe certain examples of voluntary situations. For example, in the case of underemployment due to retirement, reviewers noted that the trier-of-fact would have to consider the age and health of the retiree. Alternatively, a career or job change, made in good faith to improve the parent's potential earning potential for himself and the child, generally would not spark an attribution of income. However, if the improvement is unlikely to occur in time to benefit the child, income should be imputed at the rate of full potential. [ Id .] The West Virginia materials indicate that an attribution of income would be acceptable for parents who are unemployed or underemployed. Underemployment, however, points to parents who work at a job whichdoesn't correspond to their training or education level. In addition, it could be applied to a parent who can but fails to work in full-time employment. [ West Virginia Outline, supra , at pp. 3 – 4.] Are There Reasons Not To Impute Income?Although a parent's situation may constitute unemployment or underemployment, are there situations in which it may by inappropriate to impute income? Reviewers in many States concluded that there indeed are unemployed or underemployed parents for whom income should not be imputed at all. For example, West Virginia materials suggest that an attribution of income is correct unless one of the following has occurred:183The parent must care for a child of the relationship, who is either preschool age or disabled;

183The parent is pursuing self-improvement, which will ultimately result in economic improvement for the child;

183The parent has valid medical reasons for his or her employment status;

183The parent can demonstrate diligent but unsuccessful efforts to find employment; or

183The decisionmaker makes written findings that other reasons exist that would make the attribution of income inequitable. [ Id .]

In Illinois, reviewers believed that parents should be permitted to rebut a presumption of intentional unemployment or underemployment by producing evidence that a physical or mental incapacity justifies the employment reduction. Also acceptable as rebuttal would be an indication that the current income reduction either will result in long-term gain, as in a return to school to improve skills, or was done for some reason not associated with an attempt to avoid the payment of support. [ Illinois Report, supra, at p. 9.]

The Colorado review committee reached a similar outcome in its effort to reconcile conflicting goals: meeting the needs of the child and recognizing some legitimate reasons for a parent to take a lower paying job. Under the proposal, child support decisionmakers would have authority to protect the child's economic well-being by imputing income to "spiteful or irresponsible parent[s]." Parents with decreased income would be shielded from income imputation only if they are employed full-time and if the reduction is expected to be temporary and lead to a subsequent increase in income or a part of a good faith career change, neither intended to deprive a child ofsupport nor to unreasonably reduce the level of support available. [ 1990 Colorado Report, supra , at pp. 17 – 18.] The rationale for this exception to the imputation rule is worthy of note:

[T]here was a belief that in practice the imputation of income had made it nearly impossible for an obligor to take a lower paying job, no matter how laudable the reasons, because he or she could not afford to pay the support level at the imputed income level. By contrast, a custodial parent could choose a lower paying job so long as he or she were willing to accept somewhat reduced child support....A 1990 amendment eliminated this issue by preventing imputation of income for any parent gainfully employed on a full-time basis. This swing of the pendulum has created yet another problem. So long as the full-time employment test is met, an obligor can choose very low-income employment for the purpose of depriving a child of support or without consideration for the child's needs. This gives an angry parent excessive power to reduce needed support. [ Id. at p. 17.]

As stated previously, New Mexico reviewers prefaced income attribution on the voluntariness of the unemployment or underemployment. If the parent's situation was prompted by an involuntary act, income would not be imputed. The report provided examples of involuntary acts that would protect a parent from having income attributed. For example, physical or mental incapacity would generally constitute an exception to the attribution rule. [ New Mexico Income Commentary — undated, supra , at pp. 1 – 2. Although not stated in the report, it would seem appropriate to attribute income to a parent, despite an incapacity, if the parent has assets that could be used for support.] The report also indicated that there may be instances when incapacity would not protect a parent; unfortunately, there is no explanation. A loss of employment, unrelated to the parent's actions, also could cause income to be attributed. [ Id . Reviewers noted that income could be imputed to a parent whose unemployment compensation is less than minimum wage or less than what the parent could earn through employment.]

The 1990 Delaware review specifically dealt with the issue of imputing income to a homemaker parent. Pursuant to the review committee, there would no longer be an assignment of value to a parent's home-based duties. Reviewers felt that attributing income in this manner was rarely used, if ever, and simply represented a diversion from the real issues in the case. [ 1990 Delaware Report, supra, at p. 6.]

How Much Income Should Be Attributed?

Once there is a decision to attribute income to a parent, the next step is to determine the amount of income to be charged. State review bodies offereddiffering recommendations about the appropriate level of income to be imputed to the unemployed or underemployed parent. Some State review teams concluded that the level of attributed income should be set on a case-by-case basis. Others established either specific figures or percentages. Others established a flexible approach guided by the particular situation.

For example, Ohio reviewers suggested that potential income be calculated on a case-by-case basis, not according to any previously set schedule. When imputing income, the trier-of-fact should look at the parent's employment potential and probable earnings level, based on recent work history, occupational qualifications, and the job climate and salary levels in his community. Furthermore, if the parent has nonincome-producing assets, income from those sources also should be considered. The income level should be based on the local passbook savings rate, instead of the previously used and more difficult to obtain long-term treasury bill rate. [ Ohio Report, supra, at p. 7.]

According to New Mexico records, income is attributed after consideration of the last full-time employment of the unemployed or underemployed parent. If this factor is ineffective to reach an amount, the trier-of-fact may use earning levels of people with comparable education, training, or experience. That amount may be reduced if the parent has been out of the workforce for some time or is unlikely to find that type of job. In such a case, the minimum wage for a 40-hour week should be the income attribution basis. [ New Mexico Income Commentary — undated, supra, at pp. 2 – 3.]

North Dakota reviewers proposed an interesting approach for setting the imputed income amount. An obligor's gross monthly income generally would be the greatest of (1) 167 times the hourly Federal minimum wage, (2) 6/10 of the prevailing gross monthly earnings in the community of those with similar backgrounds, or (3) 90 percent of the obligor's greatest average monthly earnings for any 12-month period within 36 months of the child support matter's commencement. This rule would apply for unemployment, underemployment, or a failure to produce reliable income information. The decisionmaker could enter a lesser amount for an obligor who shows one of the following:

183Child care costs of at least 70 percent of the attributed income amount for a natural or adopted child in his physical custody who is under age 14 and who has no other available adult caregiver during the obligor's employment-related absences;

183A disability of sufficient severity to prevent the pursuit of employment that would produce a gross monthly income of at least 167 times the hourly Federal minimum wage;

183The existence of a minor child with emotional or physical needs that prevent gainful employment; or

183A lack of significant income-producing opportunities in the community.

No income is to be attributed if the obligor's average monthly gross earnings are equal to or greater than 167 times the hourly Federal minimum wage and if the obligor is not underemployed. [ Proposed North Dakota Guidelines, supra, at 75-02-04.1-07.]

According to Tennessee materials, the calculation of income to be attributed to a parent who is willfully and voluntarily unemployed or underemployed should be based generally on the parent's education and/or previous work experience. [ Tennessee Rulemaking Hearing Rules, supra, at p. 4, citing 1240-2-4-.03(3)(d).] Reviewers advocated a slightly different standard for the imputation of income to obligors who provide no income evidence at the child support establishment hearing. In such cases, the trier-of-fact should be authorized to use an annual income of $25,761151the 1990 average median State income. For a modification or adjustment case at which the obligor provides no income, the decisionmaker may increase the order by up to 10 percent per year for each year that has elapsed since the order was entered or last modified, whichever occurred last. [ Id . citing 1240-2-4-.03(3)(e) and (f).]

CPs and NCPs in Alaska who fail to present income statements with their initial pleadings also could be charged with a set amount of income151a presumptive income figure of $84,000 per year. This presumption is rebuttable by reasonable, accurate, and complete information, which may be available to the decisionmaker through other means. Reviewers explained that the intent behind the presumption was not only to give parties an incentive to provide the appropriate financial information but also to give trier-of-fact effective recourse when parents did not follow through. Reviewers noted that the use of presumptive income should not be employed automatically. Parties are first entitled to notice of the consequences associated with a failure to file financial information. If reasonably accurate financial information is available from another source (e.g., the other party), the presumed amount should not be used. Finally, the parent, against whom income is attributed, may provide actual income information at a later time. However, because of nonretroactivity provisions in the statute, such later-supplied information may only work to adjust an order prospectively. [ Alaska Memo — 3/17/94, supra , at pp. 11 – 12.]

Other State review teams included more modest attribution amounts among their recommendations. For example, in West Virginia it was recommendedthat income be imputed at the minimum wage rate for a full-time position. At the time of the report, the figure would have been $757 per month. Income levels also were a subject for Delaware's guideline reviewers. In 1990 they approved a basic framework for calculating a parent's appropriate support level. First, the committee gave the trier-of-fact discretion to determine the maximum potential earnings of each parent. However, reviewers established that the minimum income levels for unemployed parents should be comparable to the earnings of an average, able-bodied person, and they set that amount at $5 per hour for a 40-hour week ($607 per month). [ 1990 Delaware Report, supra, at pp. 6 – 7.] During the 1994 review, the committee raised the minimum monthly income amounts to $867 gross or $714 net income. A provision also was added that would allow a parent to overcome this presumed income if the parent's skill level dictated otherwise. Additionally, reviewers suggested that in default cases a parent's income should be imputed in an amount at least equal to that of the appearing parent, absent contrary information available to the trier-of-fact. [ 1994 Delaware Report, supra, at p. 7.]

The Verification of Income

The trier-of fact in a child support case must make certain determinations about income levels presented by the parents. Principally, the decisionmaker must decide whether parents' income representations reflect both correct and current amounts. To achieve this, there must be some method of verifying income. Only New York guideline reviewers appear to have raised this issue. New York's report illustrated the overwhelming inadequacy of the financial disclosures typically made by parents. After examining actual case files for their compliance with the State's requirements regarding statutory proof of income, reviewers concluded that most cases lacked at least some of the mandated income evidence. In the works of the committee, there was "minimal compliance with the...requirements for financial disclosure." Even more important, in 55 percent of obligor files and 67 percent of obligee files, none of the required proof had been supplied. Accordingly, there were real concerns about the financial basis for the support orders entered in the State. Despite such striking outcomes, the committee only offered that the State should make greater efforts to fully and consistently implement the statute. Members reported that by doing so, parties in child support cases could make significant strides toward the statute's underlying purpose of fair and appropriate child support. [ New York Report, supra, at p. 35.]

Adjustments to Income

Once the parent's gross or net income has been determined and, in some cases, verified, the decisionmaker may consider whether there are special circumstances that would warrant an adjustment to this income figure. Income adjustments occur prior to the calculation of the child support obligation; they often are the same factors considered by other States as reasons to deviate from the basic child support award.

States use a number of potential income adjustors, including self-support reserves, Federal and/or State income tax withholdings, child care expenses, alimony or other child support obligations, medical insurance premiums, and extraordinary medical or other expenses. As income adjusters, such factors have an "above-the-line" impact on child support. [ This is differentiated from factors employed after the calculation of a basic support award. This above-the- line category adjusts an already-determined support amount; therefore, they are more appropriately termed award deviation rather than income adjustment criteria.]

Self-Support Reserves

The self-support reserve is incorporated implicitly or explicitly into the guidelines of most States. It permits the low-income obligor to retain some minimal level of income before child support is assessed. The rationale for the self-support reserve concept is stated in materials prepared by South Carolina's expert:

The rationale behind the standard is quite simple. That is, the obligor should have sufficient income available to maintain a minimum standard of living which does not affect negatively the obligor's earning capacity, incentive to continue working, and ability to provide for him or herself. Many States have concluded that it is in the public interest that the obligor continue working as a productive member of society and not be so impoverished by the payment of child support that he/she will require public assistance. [ PSI, Special Factors and Comparative Analysis: South Carolina Child Support Guidelines Revisions (September 17, 1993), p. 21, hereafter referred to as the " South Carolina Expert Report. " See also 1994 Delaware Report, supra, at p. 8; 1994 Connecticut Guidelines, supra, at p. v.] States have adopted different methods of incorporating the self-support reserve into their guidelines. [ South Carolina Expert Report, supra, at pp. 25 – 26.] Some States use the self-support reserve to adjust income; a specific amount is subtracted from an obligor's income before the calculation of child support to account for the parent's own basic needs. The effect of this reserve is to reduce the income available for support purposes.A second way for States to reflect self-support is to build that consideration into the actual child support table. In those States, support is not assessed until an obligor's income exceeds a certain minimum amount. Even after obligor income reaches the threshold, support will be gradually phased in so that obligor income, after assessment of the support award, does not fall below the built-in reserve level.The third approach is the self-support reserve, which is used to adjust the child support order. Here, the reserve amount is subtracted from the calculated child support amount. For this discussion, however, the focus is on guideline review reports that consider use of the self-support reserve as an income adjustment factor. For example, Delaware's guideline instructions set forth that the "Court has established an absolute minimum amount of income that a parent must retain to function at maximum productivity. Subtract each parent's self support allowance from their [sic] net income and calculate the net total income available to support the child(ren)." [ Delaware Instructions for Child Support Guidelines (November 1990), p. 2.] In 1990 reviewers recommended an increase of the self-support allowance from $450 to $550; the increase was endorsed by the State Supreme Court. [ Id .]

Delaware reviewers also sought the elimination of a reduced self-support allowance for two categories of obligors:

183Those who were either remarried or cohabiting "in the relationship of husband and wife with an employed individual" or

183Those who were unemployed but imputed with half of a spouse's or partner's income. [ 1990 Delaware Report, supra, at pp. 4 – 5.]

Materials cited a three-pronged rationale for this action. First, the change acknowledged current State law under which the child support obligation belonged to the parents, not to any third party. Second, reviewers noted the extended litigation prompted by, and the inherent problems with, the guideline provisions; therefore, they opted for a plan that would promote clarity and consistency. Finally, with the high volume of child support cases to be decided on a daily basis, the expected increased caseload due to Federal review and adjustment requirements and impending automation of different self-support levels would be far too complicated to benefit the State. [ Id. at p. 5.]

Self-support reserves (renamed "standard deductions" following a 1994 review) are treated as above-the-line items in West Virginia as well. The reserve amount is deducted from the parent's net income amount to establish the income available for child support. In addition to the new name, reviewers eliminated the previous graduated reserve amounts: $315, $365, and $450. Instead, they recommended a flat $550 per month. [ West Virginia Proposed Guidelines, supra, at p. 5. Note that the standard deduction applies to both the NCP and the CP.]

Hawaii's self-support reserve amounts also were adjusted by guideline reviewers. The intention was to keep pace with Federal poverty levels based on minimum food, clothing, shelter, and other essential needs. In 1989 guideline reviewers increased the net self-support reserve from $454 to $470, in 1991 to $478 net, and in 1994 to $574 net. [ 1989 Hawaii Guidelines, supra , at p. 3; Hawaii Department of the Judiciary, Guidelines in Determining Child Support (November 1988), p. 4, hereafter referred to as the " 1988 Hawaii Guidelines " ; Hawaii Department of the Judiciary, Guidelines in Determining Child Support (March 1991), p. 4, hereafter referred to as the " 1991 Hawaii Guidelines " ; Hawaii Family Courts (First, Second, Third and Fifth Circuits), Guidelines in Determining Child Support (November 1, 1994), pp. 4 – 5, hereafter referred to as the " 1994 Hawaii Guidelines. "] Income Tax Withholding

Some States have determined that the amounts withheld from earnings for Federal, State, and/or local income taxes also should be a basis for adjusting income available for support purposes. Summaries of review committee deliberations from a few of those States follow.

At the conclusion of Connecticut's 1990 review, the committee determined that a parent's net income (the income used to establish the child support award) would be set by subtracting certain mandatory deductions from the parent's gross income. That list included "Federal income taxes based upon all allowable exemptions." [ 1991 Connecticut Guidelines, supra, at p. 11.] In 1994 reviewers agreed to retain the deduction for Federal income tax withholdings. They also added deductions for State and local taxes because a State income tax had been passed since the last review and because local taxes had been raised in various parts of the State. [ 1994 Connecticut Guideline, supra, at p. ix.]

In response to expert recommendations, Ohio reviewers also proposed reducing income by local tax payments or estimates. These taxes were omitted from previous income calculations because local tax rates varied. One suggestion had been to use an average rate, when taxes ranged from zero to several percentage points or when people live in one area but work in another; however, this was rejected as too difficult a scheme. Under thenew proposal, reviewers created a deduction for local taxes, where applicable. The parent wishing to use the deduction would have to offer proof of the tax amount claimed. [ Ohio Report, supra, at p. 12.]

In 1994 Delaware reviewers reaffirmed the use of income tax withholding adjustments; in doing so, they focused strongly on the level of the deduction. The recommendation was that all parents with taxable income are to be accorded a single exemption for the purpose of computing income available for child support. Reviewers felt that this was an appropriate way to treat parents and children equitably for child support purposes. [ 1994 Delaware Report, supra, at pp. 5 – 6.]

Proposed changes to the North Dakota guidelines also reflect concerns about a parent's tax-related income adjustments. While the reviewers advocated the retention of the adjustments for Federal and State taxes, they rejected the continued application of standard tax deductions and the tax tables to determine the appropriate rates. Reviewers took this action because of reported windfalls by obligors, who actually paid substantially less in taxes than the amounts derived from using the standard deduction or the tax tables. [ Proposed North Dakota Guidelines, supra , at pp. 5 – 6.]

Child Care Expenses

At least one State has determined that child care expenditures should be deducted from income prior to the calculation of child support. [ Most often, such expenses were treated as add-ons to the support award. See pp. 76 – 77, infra .] According to Connecticut's 1991 guidelines, "the weekly cost of unreimbursed child day care" is incurred so that the CP maintaining employment would be deemed a special exemption. As such, they were to be deducted from income before support was determined. [ 1991 Connecticut Guidelines, supra , at p. 11.] The State's 1994 guideline continues to allow above-the-line consideration for child care costs but adds clarity. Reviewers recognized the confusion in the treatment of and the distinction between mandatory deductions and special exemptions and sought to ease the situation by developing a single list of allowable deductions that would contain child day care expenses. Furthermore, reviewers applied the deduction to either parent as long as the parent had contributed to unreimbursed work-related child care costs for the child at issue. [ 1994 Connecticut Guidelines, supra , at p. x.]

Health Insurance Premiums

Several State review teams deliberated the inclusion of health insurance premiums as income adjustment factors. For example, the 1993 Massachusetts report cites reviewer displeasure with the treatment accorded health insurance expenses under the guideline in place at the time. Under that scheme, there was an above-the-line deduction for the full cost of family coverage, including the obligor's own insurance:

[Such an approach] dramatically reduces the amount of the order and causes a significant decline in the child's standard of living. In some cases, this leads the custodial parent to forego health insurance coverage for the child in favor of a more adequate child support award. In effect, the Massachusetts Guidelines...can force parents to choose between meeting the child's needs for food, clothing and shelter, or meeting the child's health care needs. The Guidelines review process presents an opportunity to rectify this problem. [ Massachusetts Report, supra , at p. I.]

To correct this situation, the review team recommended that obligors receive an above-the-line adjustment only for the difference between the total cost of family coverage and coverage for the child at issue. By doing so, the obligor would be credited for insuring the children, but the economic effect on children is eased. [ Id .]

Discussion of adjustments for medical insurance also appears in the New Hampshire materials. Although the materials do not indicate the practice prior to the 1992 review, it seems that reviewers advocated the continued limitation of the income adjustment. A parent's income could be adjusted up to 50 percent of the out-of-pocket expenses incurred for the child's medical insurance. According to reviewers, it was important to permit such a credit in order to ease the effects on parents of the increasing costs of medical coverage and the decision of many employers to discontinue such coverage for employees and their families. The committee found that a 50-percent deduction would reduce the financial burden of those parents who must pay the entire insurance costs, while not making their child support payments substantially lower than parents whose employers cover the entire medical insurance expense. [ New Hampshire Report, supra, at pp. 9 – 10.]

Each of the above States carved out above-the-line allowances for costs associated with the child's insurance. In other State reviews, the conclusion was to have a deduction for the total health insurance premium paid by the parent, not just those costs attributable to the child at issue.

For example, Delaware materials show that 1994 reviewers recommended that either parent be able to claim an above-the-line adjustment for health insurance premiums, irrespective of the people covered. The exception would be for cases in which there had been an actual request, accepted by the decisionmaker, to exclude the child at issue from the coverage. In explaining this action, the committee noted that "the prevailing national view [is] that it is in no one's best interest to be uninsured: not the child, either parent, or either parent's subsequent children. Any major medical expenditure, due to lack of insurance coverage, by either parent on behalf of that parent, or his/her child(ren) could interfere with the routine payment of child support." [ 1994 Delaware Report, supra, at p. 6.]

The review undertaken by Florida's legislature yielded a somewhat similar result. That State's guideline was changed, following the review, to allow parents to deduct from gross income all health insurance premiums, except those attributed to the child at issue. [ Laws of Florida 93-208(3)(e) (1993).] Premiums for that child would be an add-on to the support award. [ Id . at 93-208(8).]

In Illinois the State's expert suggested that where a NCP is ordered to provide health insurance for the child, he should be allowed to deduct his prorated share of the premium from the child support obligation151in essence, a below-the-line deviation. The committee rejected this approach; instead, they favored retention of the existing law that made health insurance premiums an adjustment to the gross income figure. Because reviewers were considering a change in the guideline model to income shares, they also proposed an alternative that would be effective under that proposed model. In the event of a move to income shares, the committee seemed to endorse a below-the-line deduction. If the noncustodial parent pays the insurance premium, the parent could reduce the support obligation by a pro rata share of the premium. If the custodial parent were the premium payer, then the noncustodial parent's support obligation should be increased by that parent's share of the insurance cost. [ Illinois Report, supra, at pp. 22 – 23.]

From Hawaii's materials, it appears that reviewers decided to continue to permit income adjustments for health insurance premiums; however, following the 1991 review, the statute required verification of the health insurance amounts paid. [ 1991 Hawaii Guidelines, supra , at p. 4.]

Multiple Families

The issue of multiple families was perhaps the most popular topic for the guideline review committees. In the words of the Nevada team, a "large proportion of child support cases involve multiple families. It is no longer unusual for parents to have one or more former spouses or to be custodians of children from one marriage and noncustodians of children from another." [ Nevada Report, supra, at p. 26.] Hence, there was a significant amount of interest in the way that child support will reflect multiple family situations.

Guidelines tend to approach multiple family scenarios in one of two ways. One approach is to factor existing child support obligations into the actual support calculation. That tactic, along with multiple families as matters for the discretion of the child support decisionmaker, is addressed in the section on guideline application. [ See pp. 75 – 76, infra .] The other approach is to make the obligations to other children an income deduction; the result would be to reduce income prior to the calculation of support for the child at issue. Jurisdictions that follow the latter method are discussed in this section.

Alaska's reviewers recommended a change to the definition of adjusted annual income. Pursuant to the new language, that term would mean the parent's total income minus child support for children of prior relationships who live with the parent. [ Alaska Memo, supra , at pp. 8 – 9. Alaska's treatment of subsequent children is discussed in the section of this report on support deviation. See pp. 75 – 76, infra .] Maryland's review team chose to follow what has become known as the Colorado approach to multiple family support obligations. A parent's legally recognized financial responsibilities to other children usually would be deducted from gross income in a child support establishment or modification case. In modification cases, however, if the adjustment for other children would result in a lower order for the child at issue, the deduction would be prohibited. [ Letter from Carolyn W. Colvin, Maryland Department of Human Resources, to R. Clayton Mitchell, House of Delegates (December 11, 1992), p. 1, hereafter referred to as the " Maryland DHR Letter, " citing Colorado Guideline at p. 2.] The matter was submitted to the legislature in 1995 but had not been decided at the time materials were submitted for inclusion in this report. [ Letter from Kenneth H. Runsey, Child Support Enforcement Administration, to Margaret Campbell Haynes, ABA (January 3, 1995), p. 1, hereafter referred to as the " Maryland Cover Letter. "] Prior to Connecticut's 1994 review, child support orders were treated as special exemptions from income, as long as the payment amounts were verified. Connecticut's review amended this procedure. Court-ordered child support, paid on behalf of persons not involved in the particular supportmatter, would be retitled income deductions. No verification beyond the inclusion of the specific amount on the paying parent's financial affidavit would be required. The review team purposely declined to require the obligated parent to show that these alimony and/or child support amounts were actually paid. There is a presumption that payment is made "in deference to the sanctity of a court order and in recognition that unpaid orders remain subject to enforcement and future collection." The guideline commentary did provide, however, that whenever a trier-of-fact finds that payment is not being made, she has discretion to disallow the income deduction. Reliance on such discretion provides greater assurance that the family at issue would not be deprived of funds which the obligor has chosen to retain. [ 1994 Connecticut Guidelines, supra , at p. 10.]

The review of the North Dakota guidelines included consideration of court-ordered child support awards as well as custodial child support expenses. The conclusion was that such items should be treated as income adjustments. Reviewers agreed that any ordered payment, on behalf of a child other than the one at issue, should be permitted as a deduction. [ Proposed North Dakota Guidelines, supra , at p. 7 (emphasis in original).] North Dakota's proposed changes also would have allowed a deduction of an obligor's expenditures for resident children whose parents are not the obligor and obligee. Again, the stated rationale was that the obligor has a duty to support all of his children. [ Id .]

South Carolina's guideline reviewers also engaged in discussion regarding additional dependents. They noted that when child support decisionmakers consider multiple family cases, they are "often faced with the task of balancing the needs of the NCP's additional dependents with those of the children in the action before the court, while also trying to encourage parental responsibility." [ South Carolina Child Support Guidelines Handbook (May 1994), p. 7, hereafter referred to as the " 1994 South Carolina Guidelines. "] To rectify this problem, reviewers suggested that NCPs receive credits for any additional biological or adoptive children living in the home (i.e., children for whom the obligor owes a legal duty of support). The decisionmaker calculates a basic child support obligation for these additional children. That support figure then would be multiplied by .75 and subtracted from the obligor's gross income. The remaining income would be deemed available for the support of the child at issue. This scheme generally would be used. Reviewers stated that in modification cases this income deduction should not be used, if the result would be lower support for the children who are the subjects of the modification action. Obligors in such cases were encouraged to pursue other means, such as second jobs, to improve their financial status for their other dependants. Reviewers found that such a policy "encourages parental responsibility while protecting children in the homes of both the noncustodial and custodial parent." [ Id .]

The Nevada report offers a detailed description of its review team's deliberations. Among the topics were recent case law, the distinction between a "first mortgage" and "equal treatment" approach to subsequent family obligations, and both Federal and State policy. Under the "first mortgage" approach, the earliest support obligation takes precedence over later assumed obligations. This method would "insulate" children of a first marriage or relationship from subsequent choices made by the obligor parent. [ Nevada Report, supra, at p. 28.] The "equal treatment" approach differs in that it would put all of the obligor parent's children on the same footing for child support purposes; all would have comparable access to the obligor's pool of obligor resources determined to be available for support. [ Id . at p. 29.] First, the committee concluded that child support decisionmakers needed guidance about the handling of multiple family situations. Second, the committee's majority considered the "first mortgage" the more appropriate model for these situations, regardless of whether that later family is intact or divided. Third, in fairness to obligors, in the formal calculation of support for subsequent children, reviewers decided that the decisionmaker should presumptively consider the existing support obligation for the first family and reduce the obligor's available income by that amount. [ Id. at pp. 30 – 31.] Finally, Ohio had an interesting approach to the handling of "children who are the children of either the obligee or obligor but not the children of the parties together." [ Ohio Report, supra , at p. 17.] The team noted that the current guidelines permitted a deduction to either parent for child support amounts ordered and paid on behalf of other children. For other children in the home of either parent (i.e., those for whom the parent lacked an actual support order), the guideline allowed a gross income adjustment equal to the Federal tax exemption for that child. The tax exemption amount would be reduced by any child support received for the child. [ Id . The tax exemption amount was selected as a compromise. It could not be directly related to the cost of raising children but provided relief to parents with obligations to support other children.] After considering the propriety of other approaches, the committee decided to retain both methods. [ Id. at p. 18.]

Application of the Guideline Formula

Once the trier-of-fact arrives at a decision about the income available to one or both parents for child support purposes, the particular State's guideline will be applied to produce a basic child support award figure. This basic figure is the base amount presumed to meet the child's primary needs. Depending on the guideline model, the basic child support obligation may represent the amount assumed to be provided by both parents. Therefore, this obligation would be allocated between the parents, as appropriate in that State. Under other guideline models, application of the formula only results in the obligation of the noncustodial parent. In such cases, the obligee is presumed to match the obligor's contribution or to supplement it in the manner necessary to meet the child's basic needs.

As the States reviewed their guidelines, a number of issues arose that related to the guideline application or the formula phase of the process. Typically, reviewers discussed such matters as the particular income levels to which guidelines apply, whether the guidelines were adequate generally to meet children's basic needs and whether this was true at different ages, how guidelines manage various custody and care schemes, guideline treatment of other family-related situations, and whether certain items should be assumed into the basic child support amount covered by the guidelines or designated as an add-on to the basic award.

Application of Guidelines to Specific Income Levels

Child support guidelines establish presumptive award amounts based on the combined incomes of both parents or that of the obligor alone. Although the States vary as to the applicable income levels, guidelines usually apply to cases in which the relevant income falls between a certain designated floor and ceiling amount. Many of the State guideline reviews considered the handling of cases with low-income obligors, especially those whose financial resources are below the floor, or high-income obligors whose financial resources exceed guideline ceiling amounts. Examples of the State review team treatment of these issues follow.

Low-Income Obligors

State guideline review materials indicate two major focuses regarding low-income obligors: (1) self-support reserves and (2) minimum support obligations.

Self-Support Reserves

Self-support reserves are mechanisms to establish the minimum income amount that obligors are permitted to retain before being charged with a child support obligation. This ensures that support awards do not deprive the obligor of income for basic subsistence. As discussed previously, someStates have instituted above-the-line, explicit, self-support reserves; in these States, a reserve figure is deducted from income to determine how much a parent will have for support purposes. [ See pp. 39 – 41, supra .] In other States, the reserve is implicit; the guideline formula or table in such a State simply would not set support awards for certain incomes. In the alternative, such States would establish minimum amounts at lower percentages or levels than applied to the cases of parents who are more financially able to provide support.

Missouri's reviewers recommended a low-income self-support reserve by offering "a fixed range of modest support for persons with income at or below the Federal poverty level guidelines." [ Missouri Report, supra , at p. 4.] They felt that this action was an appropriate way to protect parents in cases where an application of guidelines, pursuant to the regular schedule, would jeopardize the parent's ability to survive. A second reason was that the development of a mechanism for "implementing a modest child support for persons in the poverty or exceptionally low-income level[s]" would enable the State to fix support in a large number of cases without having to deviate from the chart. [ Id.] Obligors with monthly incomes of $300 or less were charged with $20 of support, while those with incomes between $301 and $700 were responsible for $50 monthly support awards.

Following its review, North Carolina adopted a similar approach to the issue of awards for low-income obligors. The guidelines now have a built-in self-support reserve. For very low-income obligors (defined as those with monthly adjusted gross incomes of less than $700, which was the 1993 poverty level for a single person), a minimum of $50 per month is required as support, unless the trier-of-fact allows a deviation. Even for obligors with monthly incomes above the poverty amount, the guideline incorporates the reserve so that the obligor is assured income of least at the poverty level after the payment of child support. Finally, the amended income shares guideline seeks to protect the self-support reserve and to prevent disproportionate increases in child support when there are only moderate income increases by setting aside certain incomes at which obligor income will be the sole determiner of the support level. [ North Carolina Child Support Guidelines Commentary (October 1, 1994), p. 2, hereafter referred to as the " North Carolina Commentary. " See also 1994 South Carolina Guidelines, supra , at p. 5.] Connecticut also incorporated a self-support reserve into its guidelines. As part of the 1990 review, the self-support figure was set at $135 per week. However, 1994 reviewers concluded that the amount was "unrealisticallylow given the costs an obligor incurs in maintaining a separate household." [ 1994 Connecticut Guidelines, supra, at p. v.] In response, the minimum self-support reserve was raised to $145 per week, which was less than the amount proposed by some but approximately 150 percent of the poverty level for a single person. [ Id .]

A second concern was raised for Connecticut reviewers: a low self-support reserve diminished the incentive of low-income obligors to increase income because everything above the $135 figure would be considered available for use in the child support calculation. To encourage earning among these obligors, reviewers offered and the legislature approved another strategy. Obligors at the transitional levels of income would be spared a dollar-for-dollar increase in support of their additional earnings. Instead, support would be raised based on a percentage of the additional income (70 percent for net weekly incomes between $150 and $190, 80 percent for those between $200 and $240, and 90 percent for those between $250 and $430). [ The guideline does not indicate how the interim levels (e.g., $191 – $199 and $241 – $249) are to be treated.] This phase-in has been dubbed an "effective self-support reserve" because it allows lower income obligors to retain more than the base $145 per week while still providing for the child. [ 1994 Connecticut Guideline, supra, at pp. v – vi.]

Minimum Support Obligation

A second issue considered by State review teams was the minimum amount of child support that low-income obligors should be allowed to pay. Minimum child support may arise when the NCP's income is at or close to the self-support reserve amount. In States without reserves, it may be imposed for obligors whose incomes are at the floor for application of the child support guideline. Typically, these amounts are not presumed to be sufficient to meet the child's needs; however, they are important to establish a sense of obligation on the part of the parent and/or to partially defray the costs associated with child-rearing.

For example, Nevada reviewers considered the propriety of a $100 monthly minimum support award. The committee noted that Nevada's minimum ($100) was among the highest nationally; most minimum award amounts were $50, and some were as low as $10. The committee did acknowledge that due to inflation $100 in 1992 was far different from $100 in 1987, when the minimum was initially set. For the floor support amount to have the same value that it did at its inception, it should have been raised to $121.67. The committee also discussed whether the State's minimum support obligation should be based on the child's need or the parent's ability to pay. The conclusion was that a minimum was imposed so that allchildren, irrespective of parental ability to pay, would have at least some small level of support. However, there was insufficient evidence to determine whether this minimum amount was enough to keep children out of poverty. As a result of this dialogue, the recommendation was to maintain the $100 minimum. [ Nevada Report, supra , at pp. 14 – 15.]

In Delaware, the judiciary amended the guideline to provide for a monthly minimum support award of "not less than $50.00 per child." [ 1990 Delaware Report, supra , at p. 8 (emphasis in original).] The committee selected this figure because it is the pass-through amount that Federal law permits an AFDC family to receive. Accordingly, the committee felt at a minimum that an obligor whose children receive AFDC should pay that sum that would directly benefit his or her children. Furthermore, because AFDC and non-AFDC children should not be treated differently, the same minimum would be applied across the board. [ Id . This minimum was changed to a graduated scale by 1994 reviewers: monthly figures of $52 for one child, $91 for two children, $130 for three children, and $26 for each additional child. Reviewers explained the increase from $50 to $52 as needed to make it easily divisible into weekly obligations. Furthermore, the amounts for additional children were based on a newly established primary support rate structure.]

Reviewers in Ohio also recommended a $50 monthly minimum. Reviewers provided that a court could enter a smaller amount, even zero support, if warranted by the facts, such as a verified medical or mental disability. If a minimum amount of support is entered for a parent who is a need-based public assistance recipient, that award would accumulate an arrearage each month, but the current payment obligation would be suspended while the parent is on public assistance and fully complies with any seek-work orders. The committee offered this guidance in an effort to eliminate confusion for decisionmakers and to offer assistance to obligors who actually are unable to work and provide support to their children. [ Ohio Report, supra , at p. 10.]

Illinois' committee recommended a monthly support award equal to $50 per month or 10 percent of the obligor's income, whichever is lower. This floor would apply to obligors whose incomes were at or below the poverty level established for a single person. The proposed implementation of this minimum was interesting. Reviewers in this income shares State decided that only the low-income parent's share of the support award would be affected and offered the following example:

For example, if total parental income is equal to $1,500 per month with one parent's income equal to $1,000 and the other's equal to $500, then the latter parent is below poverty-level income. If the guidelines indicate a total obligation of 20 percent of the combined parental income, the higherearning parent will be obligated to 20 percent of his/her income ($200) [sic] per month) rather than $250 per month which would be the difference between the lower earning parent's $50 poverty-level obligation and 20 percent of his/her income ($100 per month). If the lower earning parent is also the custodial parent, then the court would order a child support payment of $200 per month to that parent. If the situation is reversed, the court would order a child support payment of $50 per month to the custodial parent. [ Illinois Report, supra , at pp. 13 – 14.]

In Colorado the issue of the treatment of low-income obligors was raised as a result of public testimony that in some instances an unrealistically high level of support was expected from this group. After study, the commission agreed that support at the lowest levels was "inappropriately high." Therefore, the recommendation was to adjust the support table at the low levels in order to ease the burden. [ 1991 Colorado Report, supra , at pp. 17 – 18.] An examination of the guideline table before and after this recommendation demonstrates that the support amounts required of obligors with incomes less than $1,600 per month had in fact decreased. [ The tables begins with an income of $700 monthly.] Amounts in the 1991 table do not meet 1990 levels until monthly income reaches $1,600. [ 1991 Colorado Report, supra , at pp. 17 – 18 and Appendix 1.]

High-Income Obligors

Guideline tables typically have a ceiling (i.e., a specific income level or actual support level beyond which the formula ceases to apply). When a case presents income above that ceiling, the establishment of support can be troublesome. As a result, the treatment of cases with incomes at or above the guideline ceiling was discussed by a number of review committees. They addressed the propriety of having any ceiling, the appropriate level of such a ceiling, and whether and how support should be set when income exceeds the State's selected ceiling level.

The materials summarizing the Nevada review contained the most detailed discussion of the ceiling issue. Pursuant to the guidelines in place at the time of the August 1992 review, child support would be set at a percentage of gross monthly income based on the number of children to be supported; for instance, if there were one child at issue, support would be set at 18 percent of gross monthly income. Regardless of income, however, support could not exceed $500 per month per child, unless the court issued findings of fact to support the establishment of a different supportamount. [ Nevada Report, supra, at p. 16, citing Nev. Rev. Stat. 125B.070(b).] Therefore, even if 18 percent of gross monthly income was more than $500, support would be set at $500 and would be presumed to meet the child's basic needs. A larger support amount could not be set without detailed findings of fact by the court.

The committee reached a few conclusions regarding this cap. They recognized that a ceiling of this type "has a differential impact on persons at different income levels, depending on the number of children involved." [ Nevada Report, supra, at p. 16.] In support of this assertion, the committee noted that an obligor with one child would reach the per child ceiling amount with an annual income of $33,335, with two children at $48,000, with three children at $62,100, and with four children at $77,450. The cap did not seem to apply to obligors with more than four children.

The committee also noted that the cap was not absolute. A child support decisionmaker could order an obligor with sufficient income to provide support beyond the amount of the cap. Reviewers reached a consensus, however, that the ceiling was most often applied in cases of obligors whose incomes were not much higher than the cutoff amounts listed above. The higher the obligor's income, the more likely it was for the support order to be in excess of the presumptive ceiling. [ Id . at p. 17.]

It appears that there was a great deal of discussion about the philosophical basis for a ceiling. The committee recommended that the legislature issue a clear statement of intent in this regard. However, in arriving at this point, reviewers debated whether the ceiling was enacted because of an underlying belief that no more than $500 per month is needed to meet a child's basic needs. They questioned whether basic needs were to be defined as the poverty level or the standard of living enjoyed by the family. Using recent State advisory opinions since the legislative history provided no guidance, members felt that the statute was developed from a standard of living or at least an income-sharing perspective. They agreed that there is an "unavoidable tension between maintenance of a child's standards of living (or at least income sharing) on the one hand, and avoiding subsidization of the former spouse as primary custodian on the other." Notwithstanding the tension, a majority of the committee felt that making the child suffer, by ordering support at artificially low levels so that a CP would not be substantially subsidized, would do more harm than good. Therefore, even though clarity from the legislature was sought, the committee recommended that the ceiling either should be modified to $1,000 per month per child or should be eliminated. [ Id. at pp. 18 – 20.] The materials do not indicate whether thelegislature implemented this recommendation or offered the requested guidance.

At public hearings conducted as a part of the New Hampshire review, a number of commenters spoke about the application of guidelines in high-income cases (defined by the State as cases with combined annual income of more than $50,000):

183The support orders in these cases were far greater than the amount needed to reasonably support a child;

183Such substantial awards were an incentive for CPs to divorce the obligor since they provided de facto alimony;

183Awards that exceed the amount necessary to adequately care for the children result in "an abridgement of the personal liberty of the parents and a judgment that children are entitled to share in the wealth of their parents." [ New Hampshire Report, supra, at p. 11.]

Despite the level of obligor concern, the committee report only offers a suggestion that there may by a need to further define high income because of an inequitable application of guidelines in cases of similarly situated families. [ Id. at p. 14.]

A number of States, with varying degrees of discussion, reported that their review committees recommended an increase in the guideline ceiling amounts in order to have the support schedule apply to larger segments of the population. Nebraska moved its upper income limit from $5,000 to $8,000 per month. [ Letter from Joe Steele, Nebraska State Court Administration, to Mary Ann Miller, Department of Social Services Child Support Enforcement (January 19, 1995), p. 1, hereafter referred to as the " Nebraska Letter. "] In 1991 Hawaii extended its Table of Net Incomes from a maximum gross of $5,449 to $10,249. [ 1991 Hawaii Guideline, supra, at p. 1.] After reviews, both Missouri and Rhode Island increased their ceilings to $15,000 per month. [ Report and Recommendations of the Ad Hoc Committee to Review Child Support Guidelines (Missouri) (undated), pp. 3 – 4, hereafter referred to as the " Missouri Report " ; Letter from Ronald A. Lebel, Department of Human Services Office of Legal Services, to Jeremiah S. Jeremiah, Jr., Rhode Island Family Court (January 14, 1992), pp. 1 – 2, hereafter referred to as the " Rhode Island Letter. "] The cap was altered twice in Connecticut. In 1991, due to committee recognition that the State's $750 combined monthly income cap was the lowest in the Nation, the ceiling was raised to $1,500 and was increased to $1,750 in1994. [ 1991 Connecticut Guidelines, supra, at p. 4; 1994 Connecticut Guidelines, supra, at p. vii. Support for cases with incomes above the cap would be determined on a case-by-case basis.] The Ohio cap moved from $120,000 to $150,000 annually; however, reviewers rejected a suggestion to extend the guideline table beyond that amount due to a concern over statistical validity. [ Ohio Report, supra, at pp. 5 and 7.] As a part of its 1990 review, Colorado's team noted that the triers-of-fact may set child support on a case-by-case basis in cases with monthly incomes more than $10,000. Although few families would fall into this category, reviewers recognized that the determination of support in these cases would mean lengthy litigation and the consumption of significant judicial resources151the very items the guidelines were intended to save. Accordingly, they recommended studying ways to ease the burden on courts and to encourage settlement in the area. [ 1990 Colorado Report, supra , at p. 11.] The following year, reviewers recommended an extension of the guideline table to encompass combined total parental incomes of $15,000 per month. [ 1991 Colorado Report, supra, at p. 18.] The October 1994 guidelines reflect this change.According to Utah's committee, courts should have discretion to decide support in cases with combined annual incomes above $80,400. In such cases, however, the support amount should be no less than the guideline award that would have been made at the $80,400 ceiling, unless there is evidence to the contrary. [ Utah Report, supra , at p. 3.] In Tennessee, the issue was not the ceiling level but how it should be paid. Reviewers suggested that obligors earning more than $6,250 per month should be allowed to make alternative payments for any support ordered due to income over that ceiling amount. Hence, an obligor would have to pay support due on the first $6,250 of income to the obligee, but support based on the excess could be paid into an education or other trust for the child's benefit. [ Tennessee Rulemaking Hearing Rules, supra , at p. 7.] Illinois' expert set out for the review committee four potential methods of treating child support in high-income cases: [ Illinois Report, supra , at p. 15.] 183An absolute ceiling amount could be set. For example, if the guideline ceiling were set at $150,000 of annual income, parents with higherincomes would be obligated for more support than the amount established for the $150,000 level.

183A flexible ceiling amount could be set. Under this alternative, guideline application could end at $150,000 or some other level. In cases with incomes above that amount, the additional child support obligation would be left to the decisionmaker's discretion.

183The guideline could be extended to all income levels. [ The report references Illinois case law (in re Marriage of Bush), which indicates that in high-income families a strict application of the guideline may result in an unjustified windfall to the custodial parent and that household.]

183The guideline could apply, as in the alternative above. However, an adjustment could be made to the distribution of the award: part would be paid to the child and part to a trust fund or savings account for specific future expenses, such as postsecondary education. [ A benefit of this method was that it afforded the noncustodial parent some modicum of control over the child's expenditures.]

The committee found insufficient data to determine whether flat percentage guidelines, such as those provided in the third and fourth options above, provide accurate levels of support. On the other hand, members noted their discussions with IV-D attorneys yielded information that decisionmakers, even when no formal cap exists, tend to create one on their own. Moreover, these informal ceilings typically are set at lower levels than the committee would endorse. [ Illinois Report, supra , at p. 16.]

Given this information, the committee decided to impose a cap and to set it at a higher level than those that were judicially imposed. The proposed ceiling was $150,000 of adjusted gross income. Beyond that level, the decisionmaker's discretion would apply. [ The committee expressed concern that recent Federal regulations may preclude caps for any income level. They recommended that if caps indeed are to be prohibited, there would need to be explicit statutory language to this effect so that there would not be a reliance on informal caps.]

The Child's Need as a Guideline Calculation Factor

A few State reviews grappled with the general issue of how each child's need should be reflected in the application of the guideline. Although closely related to the discussion of child-rearing costs, the two should not be confused. [ See pp. 7 – 10, supra .] Examinations of child-rearing costs were undertaken to establish whether a State's guideline awards were sufficient overall tosupport children. Alternatively, there also is a question about whether the child's particular need should be considered during the calculation of support under the guidelines.

In addition to separate need-based considerations, a second matter was presented by some review committees. There was a suggestion in some States that it might be appropriate to have different guideline tables or calculations for children of different ages. In that way, awards would be more reflective of the needs of children at different ages. Review committee discussions about both issues follow.

General Needs

As stated above, a few review teams debated whether and how a State's guideline calculation should incorporate children's basic needs. Need was naturally an issue for Melson States such as Delaware and Hawaii because that guideline model makes children's needs a part of the support calculation. However, Idaho materials reflected a discussion of need, even though that State uses a percentage-of-income guideline.

From the inception of guidelines in Hawaii, the underlying notion has been that they are to be child centered. In fact, that principle is prominently positioned in the guideline statute:

Until the basic needs of children are met, parents should not be permitted to retain any more income than that required to provide the bare necessities for their own self-support....Where income is sufficient to cover the basic needs of the parents and all dependents, children are entitled to share in any additional income so that they can benefit from the absent parent's higher standard of living. [ 1987 Hawaii Guidelines, supra , at p. 1 (footnote omitted).]

Accordingly, after the determination of the obligor's available income, an amount is set aside to cover the primary child support need of the child at issue. The guideline itself sets forth basic child support obligations for households with different numbers of children. For example, in that original guideline, the basic need for the first child was set at $200 per month, an additional $150 per month would be added for the second and third children, and $100 per month would be added for each subsequent child. [ Id. at p. 5. The primary child support need for each child was set by first determining that child's rank in the custodial parent's household and applying the figures noted in the text.]

After review, the 1991 Hawaii guidelines ended the practice of setting a child's primary need according to placement in the custodian's household. Instead, each person's basic needs were estimated at $200, roughly the 1991 Federal poverty-level estimate for additional household members. [ Memorandum to 1994 Hawaii Guidelines, p. 2; 1994 Hawaii Guidelines, supra, at p. 6.]

Delaware's reviewers recommended similar changes to that State's guideline:

[F]ocusing on children, the current formula was modified, setting the primary support needs of those whose support is at issue. Rather than assign need based on the rank of children within a household and thereby varying the figure based on the presence of older, unrelated children and/or spouse or cohabitor, the primary support need is to be ascertained based solely on the number of children to whom the parents owe a joint legal responsibility. [ 1990 Delaware Report, supra, at p. 5.]

Therefore, a family with one child would have a primary need of $220, an additional $165 would be added per child for families with two or three children, and an additional $110 per child would be added for families with four or more children. [ Id .] The judiciary made further adjustments in 1994 so that "all children's needs [would be treated] in a more equitable fashion, while creating an economically sound regressive rate structure considering the needs of children and the parents' income." [ 1994 Delaware Report, supra, at p. 8.] Monthly allowances were adopted: $275 for one child, $485 for two, $660 for three, and $132 for each additional child.

Reviewers in Idaho were challenged by reviewers to examine the needs of children, not just the incomes of the parties, as the determining factor in the support calculation. The materials report a lengthy discussion, after which the review team concluded that it would be impossible to compute the needs of children on a case-by-case basis. Therefore, a guideline, based on the incomes of the parties, would be the only practical way to calculate support, except in unusual cases with specific facts that called for a deviation. [ Idaho Minutes, supra, at pp. 2 – 3.]

Age as a Determiner of Need

The review teams in several States considered whether the age of the child should have any bearing on the level of support awarded under the guidelines. States approached "age as a determiner" in different ways and reached different conclusions. For example, West Virginia's materialsindicate that there was a proposal for age-based modifications to the guidelines following that State's review. Prior to the review, West Virginia's guideline established the child's primary need based on rank in the custodian's household. [ For further discussion of primary child support need, see pp. 57 – 59, supra .] The recommendation of reviewers, however, was to convert the primary need to an age-based factor. They proposed that a child age 13 or older should have $230 per month to satisfy primary needs, those between ages 5 and 12 would need $200 per month, and those up to age 4 would get $170 per month. [ West Virginia Proposed Guidelines, supra, at p. 5.] The State's legislature voted to table all proposed changes indefinitely. [ Letter from R. Jeffrey Johnson, West Virginia Child Advocate Office, to Margaret Campbell Haynes, ABA (December 20, 1994), p. 1, hereafter referred to as the " West Virginia Letter. "] At the time of its first reported review, Connecticut's guideline had three age brackets (i.e., ages 01505, 615015, and 1615017). Reviewers commented that "[t]his concept [was] reflective of the economic fact that as children get older, a greater percentage of family income is generally spent on them." [ 1991 Connecticut Guideline, supra, at p. 5.] The group's recommendation was to reduce the table to two age ranges: 015011 and 1215017. Connecticut's reviewers cited the following reasons for this recommendation:

183Expenses for children between birth and age 11 were not sufficiently different to justify separate calculations;

183Guidelines should be as simple as possible to understand and to administer;

183Other States have found success with a two-bracket approach; and

183Economic data indicates that child-rearing differentials do not become evident until children reach approximately age 12.

To collapse the three age brackets into two, reviewers recommended applying the figures formerly used for the former middle category (i.e., ages 615015) to the younger grouping. [ Id .] By 1994, however, Connecticut decided to eliminate age-based calculations of support entirely. The new guidelines took into the consideration the cost of raising a child throughout minority and incorporated average costs into the guidelines. As the 1994 reportstates, reviewers made the choice "to simplify use of the guidelines and [to] make them more consistent with the majority of income-shares States." [ 1994 Connecticut Guidelines, supra, at p. vii.]

Ohio reviewers discussed age differentials in the context of deviation criteria, but their conclusion also is relevant here. They found that older children require larger expenditures of parental income; however, they believed that the guideline schedule already factored these differentials into an average support obligation. Therefore, there was neither a need to permit age to be a deviation criterion nor a need to develop separate age-based guideline tables. [ Ohio Report, supra , at p. 19.]

Custody and Care Issues

Also relevant to the calculation of child support pursuant to a State's guideline formula is the custody or care arrangement entered into either by the child's two parents or, in some instances, by the parent and the child's caregiver (e.g., a grandparent, a family friend, or the State). State review committees considered the whole range of these issues. In fact, the New Mexico commission reported that it established a special subcommittee to examine visitation and visitation enforcement issues presented in that State. Although this subcommittee does not appear to have made any recommendations specifically related to the calculation of support, it did present some interesting conclusions. Among them were several basic determinations about visitation:

The Commission concludes that the most serious problem related to resolving custody and visitation issues and promoting active involvement of both parents is the need to get preliminary time-sharing established promptly whenever a divorce, parentage, custody modification or enforcement proceeding has begun. The Commission has determined that (1) children need to have a continuing relationship with both parents early in a case; (2) children need the financial support of both parents; and (3) the promotion of the relationship may have a positive effect on the payment of child support. [ Child Support Guideline Commission Report on Visitation (October 22, 1994), Exhibit D of the New Mexico Report, supra .]

Many examined the calculation of support in a traditional sole custodial arrangement. [ These situations deal only with the arrangements regarding physical custody of the child. Legal custody (i.e., the right to make decisions and have input in matters affecting the child) has no impact on the calculation of support, even though the decision made might affect the ultimate amount of support required from the parents.] Others looked into support calculation in the shared orjoint custody scenario. Split custody also is addressed in this section. Finally, the issue of State custody is raised.

Traditional Sole Custody and the Calculation of Support

Many State review teams addressed the calculation of support in cases with traditional sole custody arrangements (i.e., those cases in which primary physical custody rests with one parent and the other parent may or may not have some level of general visitation rights). [ This situation also could apply to a third party (e.g., a grandparent or other legal guardian) who is the primary custodian and a parent who is in the noncustodial position. For the purposes of this discussion, however, reference will be made only to the custodial and noncustodial parent.] Reviewers generally found that State guidelines were developed to cover a normal visitation schedule by the NCP. Several matters consumed a great deal of reviewer energy; among them were the definition of normal visitation, the propriety of adjusting support to compensate for visitation in excess of the State's designated norm, and how any such adjustment would be calculated.

Turning first to the issue of what constitutes normal visitation, few State review materials give a concrete indication of how this term is to be interpreted. In Alaska, however, the interpretation appears in discussion of the State's civil rule on visitation credit. Pursuant to that rule, it appears that the guideline anticipates visitation of at least 27 nights per year; anything beyond that, but less than the joint custody threshold, would be considered extended visitation. [ Alaska Report, supra , at pp. 2 – 3.] The Illinois definition of normal visitation also can be found in the reviewers' discussion of visitation abatement. Visitation of 8 consecutive nights or less (the equivalent of 25 percent of any given month) seems to be incorporated into the guideline. [ Illinois Report, supra, at p. 27.] Normal visitation in Hawaii is up to 100 days per year. Annual interaction greater than 100 days but less than 183 (the joint custody threshold) would be considered extensive visitation. [ 1994 Hawaii Guidelines, supra , at p. 8.]

Once the NCP exceeds the anticipated visitation level in a sole custody case, the issue of support abatement follows. [ Included in this category are cases in which there is more interaction between obligor and child than is expected under the basic guideline but less than would be necessary to constitute joint or shared custody.] Should there be some adjustment to the child support obligation because of the extra time the obligor spends with the child? Reviewers in Illinois rejected the idea of visitation abatement presented by the State's expert: [ Illinois Report, supra , at pp. 26 – 28.]

[W]hen the child spends an extended amount of time with the noncustodial parent, that parent realizes both fixed and flexible direct costs of the child's care. When guidelines do not provide for abatement for extended visitation, the...principle that "a guideline should encourage the involvement of both parents in the child's upbringing" is not being fully addressed....When there is extended visitation, it is reasonable that the noncustodial parent should be able to provide an adequate living space for the child and to retain sufficient resources to provide for the child's needs as well as they are provided for in the custodial parent home. Visitation abatement will help to achieve that goal. [ Id . at p. 27.]

The committee disagreed. The members felt that the typical visitation scenario is woven into the basic child support award. If extraordinary visitation situations were to arise, they should be handled by the decisionmaker on a case-by-case basis, not in a blanket fashion by the guideline.

Delaware reviewers reached a similar outcome. However, reviewers specifically decided that in the traditional sole custody situation, "the proportion of time a child spends visiting with the obligor parent [should not be used] as a means of establishing or modifying a support obligation." Their rejection stemmed from a feeling that "[v]isitation beyond the traditional every-other-weekend and 2 weeks in the summer does not routinely translate into a sharing of primary expenses and sometimes spurs custody/visitation litigation." [ 1994 Delaware Report, supra , at p. 11.]

Alternatively, several State committees expressed support for the notion of visitation credit or abatement. The State summaries that follow involve a visitation credit or abatement that occurs as a part of the basic award calculation process. At least one State (Ohio) considered this option but decided to use visitation as a deviation criterion. Thus, the proposal was that deviation of up to 15 percent of the child support order could be sought when three conditions were met: (1) the custodian's annual income is $25,000 or more, (2) the obligor exercises visitation of more than 91 overnights per year, and (3) the obligor exercises visitation and keeps child support obligation current for the year prior to the request for deviation. [ Ohio Report, supra , at p. 21.] The explanation of that committee, though referring to a deviation criterion, is instructive. The committee stated the following:

The issue of whether and how to give credit to a nonresidential parent for time spent with a child was the most controversial to be addressed by the Commission. At its heart was the debate over the amount of increasedcosts, which begin to occur with visitation and the point at which those costs begin to become significant.

Several points of view emerged. On one side was the assertion that any visitation, however short, causes expenses by the nonresidential parent, with a corresponding lessening of those expenses by the residential parent. Another view was that regardless of the amount of time a child spends with a nonresidential parent, costs for items such as housing and utilities remain fixed for the residential parent, making any credit unfair to the residential parent.

Though most Commission members originally assumed that expenses for some level of visitation were built into the current Child Support Schedule, it was determined that at no time...have the current or recommended Schedules ever contained any assumptions regarding visitation. Therefore, additional discussion occurred over where such a threshold might begin and its effect.

This recommendation attempts to recognize the reality of visitation costs as fairly as possible for the nonresidential parent as well as the residential parent. It is essentially a deviation criterion applicable only under certain specific conditions. By limiting the availability of the deviation to cases where the obligee's income is $25,000 or more, the recommendation hopes to avoid impoverishing low-income residential parents by further reducing the household income.

This recommendation recognizes "standard" visitation of approximately 25 percent by allowing for the deviation only where visitation occurs more frequently than 91 overnights per year. It also attempts to address the problem of a lower overall support order, which occurs when visitation credit is awarded but visitation is not exercised by requiring parties to prove that visitation has actually occurred and support has actually been paid within the year before the request for deviation is made.

The ceiling of 15 percent on the change which a court may make in a support order when considering a deviation for visitation is intended to prevent support orders from unfairly favoring either party.

Finally, the Commission recognizes that in certain cases, parties will want to agree on a shared parenting plan, which provides for support and visitation in a different manner than stated in this factor. Therefore, parties are given the option to agree on this type of plan separate from the requirements stated herein. [ Id . at pp. 21 – 22.]

As stated above, Alaska reviewers reaffirmed the propriety of their State's credit for extended visitation (i.e., anything in excess of 27 consecutivedays). The amount to be credited would be left to the discretion of the decisionmaker, whom reviewers felt should be required to consider the financial implications that any such credit would have on both parties and specify the credited amount in the support order. They also corrected the method of calculating the abatement in order to make it applicable to cases in which the obligor's income was less than that of the child's custodian. The review team also decided that any nominal time the child spends with the custodial parent during the extended visitation period would not defeat the visitation credit. For example, the child could spend a night or so with the custodial parent and leave the obligor's credit intact. [ Alaska Memo, supra, at pp. 2 – 3.]

The Utah committee stated its recommendation without explanation. The proposal was to allow a 50-percent abatement in child support for any extended visitation period, even if the period were interrupted by a visit to the CP. [ Utah Report, supra, at p. 7.] Extended visitation is not defined.

The final State for inclusion is Tennessee. That State's material did not reference abatement; rather, it outlined a proposed amendment regarding the treatment of obligors who failed to exercise even basic visitation. Where the decisionmaker found that "the average visitation period of every other weekend from Friday evening to Sunday evening, 2 weeks during the summer and 2 weeks during the holiday periods throughout the year" is not being kept, an amount should be added to the child support obligation to compensate the custodian for the cost of providing care for the child during this extra time. [ Tennessee Rulemaking Hearing Rules, supra, at p. 6.] This proposal was passed.

Shared/Joint Custody

State materials presented some lengthy discussions about the handling of child support in joint- or shared-custody situations. By and large, the result was a recommendation either to incorporate a joint custody calculation method into the State guideline or to leave the matter to the discretion of the decisionmaker, essentially making this custodial arrangement a deviation criterion. Only one of the States seems to have decided to take no action regarding the issue.

Colorado's 1991 review included a great deal of discussion about what the State called "shared custody" (i.e., an arrangement in which each parent has the child for more than 25 percent of the year). This situation could also apply to a third party (e.g., a grandparent or other legal guardian) with whom the child's biological parent or parents share physical custody. For the purposes of this discussion, however, reference will be made only to theactual parents and not to other potential caregivers. [ 1991 Colorado Report, supra , at pp. 28 – 29.] Commenters had two major concerns with the State's practice: (1) some claimed that 25 percent was too high a threshold for shared custody and (2) there was an assertion that the change in the support rate was too drastic once that 25-percent threshold had been met.

Colorado reviewers, disagreeing with the 25-percent threshold, noted that even if a child stayed with a parent for the entire summer, the threshold would not be met; thus, it was too high. According to the committee's minority, the NCP incurs significant costs to provide a separate home for the child, even if it is for less than 25 percent of the year. The minority also believed that the threshold had become a real source of difficulty between parents. In fact, they noted such contentiousness that "visitation arrangements turn on the economic impacts of staying below151or rising above151the threshold. Thus, this statutory formula does not achieve its goals and has the effect of discouraging increased visitation for economic reasons." [ Id . at p. 31.]

In response to the concern over the threshold, the committee considered the complete elimination of a threshold. However, the majority rejected the idea, citing the potential for increased litigation and the likely manipulation of child support that would occur if a credit were given for every overnight with the NCP. The committee also evaluated the propriety of instituting a support abatement for periods beyond 1 month, when the NCP served as primary caregiver. The majority also rejected this alternative as procedurally impractical to implement due to the use of and need for wage assignments. Committee members felt that wage assignment would bar the use of abatements, since it would be difficult to temporarily suspend support with various employers. [ Id . at pp. 29 – 30.]

The committee's second concern was that support changed too significantly upon reaching the 25-percent threshold. Citing studies, the majority found that the NCP incurred roughly 50 percent of the child-rearing costs once visitation exceeded the threshold. To defray some of this expense, the guideline directed that the basic support amount was to be multiplied by 1.5 to produce an award amount in shared-custody cases. Therefore, the total award would be greater, and a larger amount would be allocated to each parent for his or her costs of care. Furthermore, the 1.5 multiplier would prevent a drastic drop in the support award once the threshold is reached and still give the obligor credit for household expenses. As stated above, however, many reviewers felt that the support drop-off was too drastic after meeting the threshold; in fact, even the majority reported a "cliff effect" at the threshold but found that no other satisfactory calculation method hadbeen presented. The minority opinion recommends the use of a 1.12 multiplier for support based on custodial arrangements in which the child spends more than 31 overnights with the NCP. According to this segment of the committee, this scheme produces the most gradual decline in support awards and thus would be acceptable to CPs. Alternatively, because it starts the support adjustment on the 31st night (an early though significant time commitment), it would find favor with NCPs faced with the costs of providing a home worthy of the child who visits. [ Id. at p. 32.]

While other multipliers were considered, the committee's majority noted that there was insufficient data to indicate that the resulting awards would meet the basic needs of the child. Furthermore, reviewers found that the elimination of a multiplier would result in significant support falloffs for CPs151an unacceptable outcome. Although discussed in another context in this section, Alaska's reviewers also discussed the calculation of support in shared-custody cases. [ Memorandum from Alaska Child Support Guidelines Review Committee to the Alaska Supreme Court (October 5, 1993), p. 1, hereafter referred to as the " Alaska Shared Custody Memo. "] Listing several separate factors, the committee decided not to recommend a change to the State's calculation method, which entailed use of a 1.5 multiplier: 149The committee noted that Alaska's guidelines produce support awards that are lower than the national average. Members felt that many parents fail to recognize this fact. In addition, the committee reminded readers that the State's guidelines placed a support obligation on both parents, not just on the NCP. [ Alaska Shared Custody Memo, supra, at p. 1.] 149The committee emphasized that the basic support obligation covered a range of custodial arrangements. The basic support award applied to cases that have NCP care up to 30 percent of a given year. [ Id. at pp. 1 – 2.] 149Members felt that commenters mistakenly asserted that the 1.5 multiplier made little difference to support. Rather, application of the multiplier substantially reduced payments. [ Id. at p. 2.] 149The committee found that the State rule accomplished several goals: (1) it recognized that the shared custody arrangement can increase the total costs to parents by as much as 50 percent, (2) it noted the importance of children being adequately supported in such arrangements, and (3) it encouraged joint custody by allowing thesupport reduction while also providing the CP "at least minimally adequate support." [ Id. at p. 3.]

149The committee responded that the Alaska shared custody scheme is more generous to the obligor than the plans of many States. [ Id .]

149The State's approach offered a rather simple support calculation process. The committee found this to be a critical point given the number of cases in which it would need to be applied. [ Id.]

Several other State reviews concluded that the handling of support in joint-custody situations should be left to the discretion of the decisionmaker. Nevada reviewers considered various factors concerning joint-custody situations. Among them were the following:

183Recent State case law;

183The unofficial State practice of permitting abatements for extended visitation (e.g., summers);

183Technical matters (e.g., the proper threshold for time-share arrangements);

183The appropriate ways to define time (e.g., clock hours, meals taken while in a parent's custody, and overnight stays); and

183The custodial arrangements incorporated into the basic child support award. [ Nevada Report, supra , pp. 34 – 36.]

The committee found abatements to be inequitable. Thus, abatements were to be used as an exception to, rather than the rule for, shared-custody situations. The committee stated the following:

The big problem in any sort of explicit connection between child support on the one hand and time share or visitation on the other is that the determination of visitation becomes a surrogate arena for disputes over the level of child support. Any such possibility should be avoided to the degree possible, for the benefit of the children involved, and must be acknowledged as a probable cost of any statutory abatement provision. [ Id. at pp. 36 – 37.]

There was a consensus that abatement must be supported by reasonably reliable data, showing an actual reduction in the primary custodian's expenses. Even then, however, the abatement should not exceed the actual expense amount. Because the committee felt that the overall data indicate that the reduction to the primary custodian's household is typically not appreciable, despite significant visitation periods with the NCP during which he may incur considerable expenditures, the conclusion was to avoid abatement. The committee also distinguished between a regular practice of weekly time-sharing and extended visitation (i.e., visitation for several weeks or months at a time). Recognizing the difference, several committee members favored abatement during extended visitation because these instances provide a set period of direct responsibility during which each parent would serve as the primary caregiver for the child. They also found a more demonstrable reduction in primary household expenses with extended visitation periods. [ Id. at p. 37.] However, because individual cases may present facts warranting different treatment, reviewers recommended that the handling of visitation, for any period more than 14 consecutive days, be left to the discretion of decisionmakers. [ Id. at pp. 37 – 38.]

While Nevada's committee report was by far the most detailed of those that ceded discretion to the child support decisionmaker, the conclusions of other State reviewers also are important to note. For example, Delaware reviewers recommended that in joint-custody situations where there is shared residence (i.e., an actual sharing of physical custody), each parent could retain half of the parent's respective child support obligation. [ 1994 Delaware Report, supra , at p. 11. " Shared residence " was defined roughly as an equal division of the child's time between his parents, either pursuant to a court order or agreement of the parties.] Connecticut followed the recommendation of its reviewers to make shared custody a discretionary deviation factor. That State's committee considered including a shared-custody adjustment in the guideline, but decided against it finding that "such adjustments should be based on the totality of circumstances in individual cases. To do so inevitably would be a more complex process than could be adequately incorporated into a rigid mathematical formula." [ 1991 Connecticut Guideline, supra, at p. 6.]

The Alabama guideline did not specifically address joint custody situations but instead allowed appropriate deviations on a case-by-case basis. [ Recommendations for Revision of the Alabama Child Support Guidelines Rule 32 (August 1993), p. 15, hereafter referred to as the " Alabama Report. " Discretion was warranted because guidelines were to cover the typical rather than the exceptional custodial arrangement.] The committee's decision was to retain this approach. In reaching this end, thecommittee found that joint custody best expressed the legal condition in which responsibility was held by both of a child's parents. However, shared physical custody would address the time that a child spends with either parent. For the latter concept, reviewers concluded that the possibilities for child support are endless. However, the committee rejected the processes utilized by "[m]any States...[that have] complicated formulae based on threshold time periods deemed in excess of normal visitation or other determinative factors." Leaving this decision with the trier-of-fact was seen as the most realistic alternative. [ Id. at p. 15.]

Two things seemed to motivate Missouri reviewers: the desire to avoid complexity and a belief that the custody issue exceeded the committee's scope. The State's review report notes that "[a]t risk of causing confusion, the Committee has included in the comments...an indication that where the NCP has significantly more physical custody of a child...than is normally observed in dissolution cases, an adjustment of the presumed child support amount may be appropriate." [ Missouri Report, supra, at p. 6.] However, reviewers were reluctant to set a blanket shared-custody procedure. They believed that a standard procedure might undermine the entire guideline approach by suggesting that a NCP should receive a reduction in support for any period spent with the child. Therefore, the decisionmaker in each case would make this determination.

This topic also engendered concern for Illinois reviewers. While they did not believe that decisionmakers were addressing the matter adequately, they felt that "if the Guidelines specify anything like the [expert] Report's recommendation, they may spawn even greater confusion." [ Illinois Report, supra, at p. 29.] As a result, the committee recommended that the matter of support in joint custody cases be left to the discretion of the decisionmaker. [ Id .]

Before moving to the next section, there is one final aspect of the joint custody arrangement that must be addressed. Alaska reviewers offered a recommendation for a child support calculation when a NCP fails to follow through with the ordered or agreed shared-custody scheme. The NCP may choose not to exercise his or her part of the ordered or agreed custody arrangement. However, reviewers found that this choice results both in higher expenses to the CP and less support. To rectify this inequity, the NCP's failure to visit or exercise custody as intended would be grounds for a modification of support. [ Alaska Memo, supra, at pp. 3 – 5.] However, the committee would specificallyprohibit a CP from benefitting if the parent had denied visitation to the other parent. [ Id .]

Split Custody

The concept of split or divided custody was a focus for a number of State review teams. In the words of the Alaska review committee, split or divided custody represents the situation in which "one parent has sole or primary physical custody of one or more children of the relationship, and the other parent has sole or primary custody of one or more other children of the relationship." This situation also could apply to a third party (e.g., a grandparent or other legal guardian) who has custody of one or more of the parents' children, even though the parent or parents have retained physical custody of one or more children. For purposes of this discussion, however, reference will be made only to split custody by the parents and not arrangements with other caregivers. [ Alaska Memo, supra, at p. 5; see also Alabama Report, supra, at p. 16.] States that dealt with this topic in their reviews considered the calculation of support in such cases and technical factors, such as the types of worksheets to be completed. First turning to the issue of support calculation in split-custody cases, the reviews of Illinois, Alabama, and Colorado are instructive.

Prior to the Illinois review, the guideline contained no mechanism for deciding support in split-custody cases. Reviewers recommended the calculation of separate support obligations for each household. The parent with the larger obligation would pay the difference between the two obligations. If there were any add-on expenses, these would be calculated separately and prorated between the parents in proportion to their incomes. [ Illinois Report, supra, at pp. 28-29.]

In Alabama, the review team found a common split-custody approach151calculating a single support order for all of the children and dividing that sum by the number of children present in each home151to be inequitable and impractical. Instead, this committee recommended the preparation of offsetting guideline calculations and the payment of the difference between the two as the support amount. [ Alabama Report, supra, at p. 16.]

Citing the increased frequency of split-custody cases and the often accompanying confusion, Colorado's team also rejected the joint computation/split allocation approach. However, the committee suggested a separate computation of support for each child. The amount per householdwould then be tallied, and the parent with the higher obligation would pay the difference to the other. [ 1991 Colorado Report, supra, at p. 21.]

The Ohio review addressed a practical matter related to split-custody cases: the way in which these cases are calculated on the guideline worksheet. Commenters suggested an amendment of the existing worksheet for split-custody information and calculations. By having all situations covered on one form, the parties would be able to use a single form for any scenario. Reviewers also were influenced by cost. The proposed worksheet would have doubled the length of each printed form, which would be an uneconomical outcome given the relatively small number of split-custody cases presented annually. The review team believed, and the legislature agreed, that it would be more fiscally responsible to develop a separate split-custody worksheet for use only in the relevant cases. [ Ohio Report, supra, at p. 11.]

State Custody

Up to this point, the visitation/custody discussion has focused on arrangements between the child's parents. [ The person with support responsibility may be a natural or adoptive parent. Some States also may include a legal guardian, if the duty of support follows from that position.] Another important matter was the determination of the child support owed to the State when a child is in State care because of abuse, neglect, delinquency, or other reasons.

Alaska's reviewers recommended total revision of the guideline provision on support in State custody cases. They found that the State's guideline only worked well for cases in which all of a family's children were in State custody; in those instances, the guideline would be applied, and the parents would pay the State the usual basic award. However, when the State had assumed control of one or more (but not all) of the children, application of the usual percentages produced inequities. To rectify this situation, the review team recommended that if all children go into State custody, the parents would owe a support obligation equal to their adjusted annual incomes, multiplied by a certain percentage. However, if the State were to take some (but not all) of a family's children, the obligation would be equal to the adjusted annual income, multiplied by the total number of children, multiplied by the number of children in State custody, and divided by the total number of children. The total only would apply to children placed with the State, children currently with the parent, or children in the parent's legal custody though located elsewhere and substantially supported by the parent. The parents' other children, such as those who have been adopted, would not be included in the total. [ Alaska Memo, supra, at pp. 17 – 19.]

Changes also were proposed to North Dakota's guideline provisions on support in foster care cases. Reviewers decided to simplify the calculation of support in these cases. If parents live together and owe no duty of support to other children, their incomes would be combined and a joint support award calculated. If the parents live separately, each parent would be considered a separate obligor for whom support would be determined accordingly. Each child in foster care would be an obligee for child support purposes. Furthermore, if the calculated support amount exceeds the foster care cost, support would be reduced to the level of foster care reimbursement. [ North Dakota Amendments, supra , at p. 35 (75-02-04.1-11).] Reviewers took this action based on comments and decided that the most appropriate response would be to treat all foster care cases as multiple family cases. [ Comments to Proposed Administrative Code Amendments, supra, at p. 22.]

Guideline Handling of Multiple Family Cases

As discussed previously, the existence of multiple families has raised a host of issues related to the determination of child support under a system of guidelines. [ For a discussion of multiple families as an income adjustment factor, see pp. 45 – 48, supra .] Some jurisdictions have decided to make support obligations to other dependents a way for a parent to reduce the income available for support. Other States either have incorporated such support obligations into the actual calculation of support for the child at issue or have left it to the discretion of the decisionmaker. The discussions of review teams regarding the latter two methods are addressed in the following sections.

Incorporating Multiple Families Into Guideline Formulae

Recognizing the frequency of multiple-family cases, Massachusetts reviewers recommended a change to that State's guideline. Prior to this amendment, the guideline only covered child support in simple cases. Support paid pursuant to an order secured by a prior family would be considered, whereas expenses for subsequent families would not be considered. If there were children from prior relationships who lacked established support orders or if subsequent children were involved, these cases would be left to the discretion of the child support decisionmaker. [ Massachusetts Report, supra , at p. 11.]

The Massachusetts committee recommended a guideline revision to the section on subsequent family expenses. Under the new provision, the regular child support schedule presumptively would permit the obligor to retain sufficient funds to support any child in the current household. In a modification proceeding brought by the CP, this presumption could be rebutted by proof that application of the guideline would place the obligor'shousehold at a lower standard of living than that available to the child at issue. If the obligor's argument were convincing, the decisionmaker could order a modified support amount that would put the two households at comparable standards of living. [ Id . Standards of living were to be computed using the entire household income and size on the basis of the most recent poverty-level data.] Decisionmakers were provided the following formula to assist in the calculation of a child support order:

(IO x WC) - (IC x WO)

WC + WO

where IO represents the gross weekly income of the obligor's household, IC is the gross weekly income of the child's household, WO is the weekly income standard for the obligor's household, and WC is the weekly income standard for the child's household. [ Id. at p. 12.]

Guidelines in North Dakota also were targeted for revision to better address multiple-family cases. Reviewers acknowledged that obligors have a duty to support all of their children. [ North Dakota Comments, supra, at p. 7.] Hence, reviewers recommended an amendment of the statutory language that would read as follows:

75-02-04.1-06.1. Determination of support amount in multiple family cases.

1.This section must be used to determine the child support amount presumed to be the correct amount of child support in all cases involving an obligor who:

a.Owes duties of support payable to two or more obligees; or

b.Owes a duty of support to at least one obligee and also owes a duty of support to a child living with the obligor who is not also the child of that obligee....

3.A hypothetical amount that reflects the cost of supporting children living with the obligor...and a hypothetical amount due to each obligee...must first be determined for the children living with the obligor and each obligee (whether or not the obligee is a party to the proceeding), assuming for purposes of that determination:

a.The obligor has no support obligations except to the obligee in question; and

b.The guidelines amount is not rebutted.

4.A hypothetical amount due to each obligee...must next be determined for each obligee who is a party to the proceeding, assuming for the purposes of that determination:

a.The obligor's net income is reduced by:

(1)The amount of child support due to all other obligees...and

(2)The cost of supporting a child living with the obligor, who is not also the child of that obligee....

b.The guidelines amount is not rebutted; and

c.Any support amount otherwise determined to be less than one dollar is determined to be one dollar.

5.For each obligee before the court, the support obligation presumed to be the correct amount of child support is equal to one half of the total of the two amounts determined, with respect to that obligee, under sections 3 and 4.

6.The fact, if it is a fact, that the obligor is required to pay, or pays, a different amount than the hypothetical amounts determined under subsections 3 and 4 is not a basis for deviation from the procedure described in this section. [ Proposed North Dakota Guidelines, supra, at pp. 16 – 18.]

Discretionary Treatment of Multiple Family Cases

Other State review teams felt that decisions regarding the setting of support in multiple-family cases were best left to the discretion of the decisionmaker. For example, Alabama reviewers found the multiple-family issue to be largely covered by case law. While reviewers did not feel responsible for recommending "a major doctrinal change...in the case law of [the] State," reviewers did suggest an amendment of the guideline comments regarding the treatment of second families. The proposal was to prohibit an income deduction for subsequent children but to permit the consideration of evidence regarding the amount of support paid for such children to rebut presumptive guideline awards in specific circumstances. [ Alabama Report, supra , at p. 18.]

The reviewers in Arkansas added support on behalf of dependent children, including the amount a parent actually pays, to the list of factors that couldprecipitate an adjustment to the child support obligation. The support payments mentioned above did not have to be made pursuant to a court order to be used in this way. [ In re Child Support Guidelines (petition to revise guidelines), Exhibit A (October 7, 1993), p. 7, hereafter referred to as the " Arkansas Guideline Petition. "] Furthermore, in Alaska the guideline review committee concluded that under normal circumstances the existence of subsequent families would not constitute a basis for varying from the guidelines. Whereas the child support award could be reduced if a trier-of-fact finds that a failure to reduce support would cause substantial hardship to the subsequent family, whenever substantial hardship is claimed, the decisionmaker would be permitted to consider income and potential income of both parents of that child in the obligor's home. [ Alaska Memo, supra, at pp. 6 – 7.] In addition, the committee specifically stated that income derived from a second job, which was taken specifically to meet the needs of a subsequent family, could be excluded from income in modification cases brought by the CP. [ Id .] Guideline Amount Add-Ons and Deviations

Once a basic guideline support amount is computed, there are several possible adjustments to that amount that would result in an award higher or lower than the strict guideline-generated amount (i.e., a deviation). Among those items are child care costs, health insurance premiums, costs of uninsured health care, and costs of postsecondary education. While some jurisdictions included these same factors as income adjusters, other States chose to treat them as below-the-line factors.

Child Care Costs

At least two State review bodies considered child care expenses a "below-the-line" adjustment to child support. Several States addressed the circumstances that prompted the child care expense. For example, Delaware approved reviewers' recommendations that only the actual expenses incurred by a working CP should be considered. [ 1990 Delaware Report, supra, at p. 7.] Utah's review team discussed the validity of expenses and recommended statutory revisions that would require the verification of amounts paid for and sources of any such child care. [ Utah Report, supra, at p. 7.] Furthermore, Colorado reviewers concluded that unemployed CPs only should be able to collect child care costs that are bona fide and actually work related (i.e., those incurred to enable that parent tofind or receive training for a job). [ 1991 Colorado Report, supra , at p. 15.] Reviewers in Colorado reasoned that child care costs are "a direct cost to the custodial parent and quite often...substantial....In many cases the custodial parent could not afford to work without contribution from the noncustodial parent for these costs." [ 1991 Colorado Report, supra , at p. 14.] State law provided for the following:

183Work-related child care costs to be an add-on to the basic child support order;

183A cap on those costs, set at the typical licensed child care cost within the State;

183The Federal income tax credit for child care to be subtracted from the actual cost in order to arrive at the net figure; and

183The division of this cost between the parents in proportion to their adjusted gross incomes. [ Id .]

The committee believed that this law offered "an uncomplicated method of equitably distributing the direct cost of work-related child care costs." [ Id. at p. 15.] Therefore, they recommended no change to the treatment of this aspect of support.

The Nevada report indicated that the current guideline did not presumptively include child care expenses. Instead, the law treated these costs as a specific factor to be resolved by the decisionmaker. [ Nevada Report, supra, at p. 20.] The committee agreed that "child care costs [were] not adequately reflected in the current statutory framework, especially not in cases where both parents are working and at least one child is not yet of school age." [ Id. at p. 21.] Experience showed that the State's decisionmakers seldom applied the child care cost deviation factor.

Reviewers noted a possible response: incorporating some amount into the guideline for child care costs so that it would be included to an extent in each order. Citing fairness, however, reviewers thought it "best not to presume the existence of such expenses...since in some cases the expense will be zero, while in others it might be considerable. The best approachwould be to leave child care factors outside of the formula and add them to the support obligation only when the facts of the case so warrant." [ Id. at p. 22.] Accordingly, the committee offered modification of the guideline to reflect this notion.

Medical Insurance Premiums

Medical insurance premiums also were accorded below-the-line treatment by some jurisdictions. For example, the review teams in both Idaho and Ohio recommended a guideline change; instead of constituting an income deduction for the paying parent, premium payments would be add-ons to the support award. [ Idaho Minutes, supra, at pp. 13 – 14; Ohio Report, supra , at p. 9.] Per the Ohio team, this change would be a more equitable way to address the expense. [ Ohio Report, supra, at p. 10.]

In 1993 Alabama reviewers were reluctant to make substantial changes regarding medical care costs and health insurance because of the anticipated changes at the Federal level. Nevertheless, they recommended an add-on approach to take the place of the adjustment-to-income method currently in use. "[T]he present method of allowing only a deduction from gross income for the cost of health insurance is not realistic when compared to the effect it has on the overall child support obligation." [ Alabama Report, supra, at p. 8.]

Health insurance was treated differently in Missouri. Reviewers recommended restructuring the guideline worksheet so that the presumptive child support amount would be raised automatically when the CP paid the insurance premiums. However, the NCP would receive a credit, thereby lowering the basic support amount, if the NCP paid the premium. The addition or reduction of support would be in the amount of the parent's pro rata share of the cost. [ Missouri Report, supra, at p. 4.]

Florida's legislature changed its guideline after the State's review. Under the new law, a parent could deduct all health insurance premiums from gross income, except those attributable to the child at issue. The premium for the instant child would be an add-on to the support amount. [ Laws of Florida 93-208(8).]

Extraordinary Medical Expenses

Treatment of extraordinary medical expenses was the subject of a great deal of discussion by review teams. Such expenses typically were relegated to a below-the-line position. Review materials focus on the following:

183The specific level of expenses to be considered extraordinary;

183The rationale for add-on treatment;

183The scheme for allocating these expenses between parents; and

183How payments to providers and/or reimbursements are to be made.

Extraordinary was defined either directly or indirectly by several review committees. Alaska reviewers proposed a provision regarding the treatment of a child's reasonable health care expenses which are beyond the coverage of insurance. [ Alaska Memo, supra, at p. 13.] In Missouri the review team defined extraordinary medical costs as expenses associated with a child's chronic health care needs. That committee offered $100 per illness per child as the level to distinguish chronic from routine care costs. [ Missouri Report, supra, at pp. 4 – 5.] In contrast, Alabama reviewers recognized that the guideline schedule included some medical expenses considered routine, such as nonprescription medications and well visits to doctors. These expenses were estimated at $100 per person annually. Anything above that amount would be considered extraordinary. [ Ohio Report, supra, at p. 9.]

A few State review materials indicated the rationale for below-the-line treatment of extraordinary medical expenses. For example, according to Ohio's expert, the guideline table provided for ordinary and necessary uninsured medical costs of $100 per year per child; therefore, some provision had to be made, apart from the guideline amount, for expenses which exceeded this level. [ Id .] Utah's rationale for below-the-line treatment was to reflect actual costs for the family in question; reviewers felt that this approach would not undermine the underlying goals of guidelines. [ Utah Report, supra, at p. 6.]

Reviews resulted in two alternative methods of allocating of these below-the-line expenses between parents: (1) States that opted for an even distribution of the costs between parents (e.g., Alaska and Utah) [ Alaska Memo, supra, at pp. 14 – 15; Utah Report, supra , at p. 6.] and (2) States that decided extraordinary medical expenses should be attributedto the parents in proportion to their respective incomes (e.g., Delaware, Idaho, and Missouri). [ 1990 Delaware Report, supra, at pp. 7 – 8; Idaho Report, supra, at p. 14; Missouri Report, supra, at p. 4.]

Some jurisdictions' reviews made recommendations for payment of these expenses. Per the Idaho materials, extraordinary expenses are to "be paid directly between the parties." [ Idaho Report, supra, at p. 14.] However, Washington's legislature recommended that CPs initially pay extraordinary expenses and then seek reimbursement from the NCP for the appropriate share. If the NCP failed to offer reimbursement, the recommendation followed that the CP could institute formal legal proceedings. However, the Governor vetoed this recommendation as unreasonably harsh. [ Washington Veto Message, supra , at pp. 57 – 58.]

Postsecondary Education

While postsecondary education received a great deal of attention by guideline review teams, only one State review report seems to suggest how such expenses should be incorporated into the support calculation process. Most reviews appear to raise different aspects of the postsecondary education issue. For example, Illinois reviewers rejected a blanket requirement that parents assume postsecondary expenses, citing the complex issues associated with such cases (e.g., who would receive the money and how parttime students should be treated). Instead, the matter was left entirely to the decisionmaker's discretion. [ Illinois Report, supra, at p. 26.]

In Ohio reviewers instituted a presumptive ceiling on the payment of higher education costs at age 18. The review committee viewed such decisions to be not only within the decisionmaker's discretion but also beyond the scope of the child support review committee's charge. [ Ohio Report, supra, at p. 9.]

Materials from a number of other States dealt with issues that arise once the jurisdiction has decided to permit some level of postsecondary education costs. For example, Colorado reviewers recommended that orders for postsecondary education expenses include medical insurance and extend through age 23. Although the State's legislature set the termination age at age 21, it approved the rest of the proposal. It also instituted the terms of an earlier statute, making such expenses a below-the-line factor applicable only to the portion of the award attributable to the child in college.

If there were an award for two children, one of whom was in college, the adjustment would apply only to the difference between the guideline amount for a single child and the actual expense amount. [ 1991 Colorado Report, supra , at pp. 3 – 4.] The Washington State legislature supported even more limited postsecondary education treatment by proposing an absolute ceiling on such expenses equal to the level of tuition charged to resident students by the Washington State university system. This recommendation was vetoed as unnecessarily infringing upon the discretion of child support decisionmakers and the educational options available to the State's children. [ Washington Veto Message, supra, at p. 58.] Alabama reviewers recommended that "[e]xpenses of college education incurred prior to a child's reaching the age of majority" would be considered as an appropriate reason for deviating from the support amount produced by the guideline. [ Alabama Report, supra, at p. 6.]

Related Issues

Up to this point, this report has focused on issues specifically related to the determination of child support. These were general topics that shaped States' choices of guideline model, determined the income deemed available for support purposes, outlined the calculation of a basic support award, and examined some of the typical factors that would alter that basic support award. Guideline reviews in many States broached issues beyond those associated with the determination of an award amount. This report concludes with a brief discussion of these matters.

Obligee Accountability

Guideline reviewers frequently heard obligor assertions that money paid as child support does not always go to meet the child's needs. Accordingly, some obligors have sought to have State guidelines formally incorporate the notion of CP accountability; they want some level of assurance that child support is used, exclusively or primarily, for the benefit of the children. The issue of accountability led to interesting debate and recommendations by review teams.

The materials from three States151Colorado, Nevada, and Utah151point to discussions of the topic. Colorado and Nevada reviewers rejected the addition of CP accountability to guidelines. Nevada reviewers stated the following:

There are some attractions to such a proposal. Precise accountings could show whether support being paid is excessive or inadequate in a particular case, whether or not child support is being utilized as a tax-free "hiddenalimony," and might provide peace of mind to a large number of Obligors who would then be more willing to pay the support ordered. On the other hand, the available data shows that a child's standard of living is inextricably intertwined with that of the child's primary custodian, so it may be impossible to show how the custodian's improved living standard is not, in fact, that of the child. Further, anecdotal accounts indicate that there is a significant "control" issue present in some of these cases, and a provision for accounting would be a further means for an Obligor to control by audit the actions of the Recipient. Additionally, a large record-keeping burden would be imposed on the Recipient. [ Nevada Report, supra, at p. 46.]

After weighing the options, a closely divided Nevada committee rejected the idea. In their opinion, the institution of an accounting requirement would open a "Pandora's Box." Any potential benefits of the accounting concept would be easily outweighed by "abusive litigation in the form of accounting requests." [ Id. at p. 47.]

Colorado's reviewers also decided to forego the adoption of an accounting provision for the child support guidelines. They felt that the problems associated with accounting surpassed the likely benefits to be achieved in a small category of cases. In support of this conclusion, the committee noted the following:

Already crowded dockets would be further burdened by petitions requesting accountability and by the need for review hearings after the accounting had been completed. Custodial parents would face the additional task of trying to account for the children's share of expenses such as housing, utilities, and transportation, which cannot be easily separated from that portion spent on others in the household. Problems also would arise after an accounting had been ordered. What should be the penalty imposed on a custodial parent if he or she fails to provide complete accounting or refuses to do it at all? What if the accounting shows that expenditures consistently do not add up to the total amount of support dictated by the guidelines? What if the expenditures exceed this figure? Are these grounds for an upward or downward modification of the support order? [ 1991 Colorado Report, supra, at pp. 23 – 24.]

Without explanation, Utah reviewers favored the institution of some mechanism for encouraging CP accountability for their child-related expenditures. [ Utah Report, supra, at p. 4.] It is unclear whether this recommendation was ever acted upon by the State legislature.

Guidelines and Award Modification

The role of child support guidelines in the modification of awards also was a subject considered by State review committees. Some jurisdictions considered whether and how guidelines could be used to modify a support order. The review materials indicate, following their reviews, that some States more clearly articulated the connection between guidelines and modification criteria.

Prior to its 1994 review, South Carolina employed a substantial change of circumstance standard for the modification of child support orders. It appears that the State's expert recommended that substantial change be interpreted in the context of the guidelines. Thus, rather than a subjective standard, the suggestion was to permit modification when application of the guideline would produce an award that differs at least 10 percent from the existing award. [ South Carolina Expert Report, supra, at pp. 64 – 66.] The expert report seems to use the terms modification and adjustment interchangeably. The expert refers to the Family Support Act's periodic review and adjustment requirement for child support orders, as well as to the permissible establishment of quantitative standards for the measurement of adjustments. However, it is not clear whether the expert's recommendations are made only with respect to adjustments or for traditional modifications. The State's 1994 guideline does not indicate whether this recommendation was adopted. [ Nebraska did amend its guideline in 1991 to create a rebuttable presumption of changed circumstances whenever the guideline varied at least 10 percent from the current support award. Nebraska Letter, supra, at p. 1.]

Materials submitted by Tennessee also show that reviewers intended guidelines to be used to modify child support. The team concluded that a variance between current support and the guideline calculation of at least 15 percent would justify modification of an order. [ This threshold would apply to all cases with current monthly support orders of at least $100. It also would apply unless a downward modification were sought by an obligor who was willfully or voluntarily unemployed or underemployed. Tennessee Rulemaking Hearing Rules, supra, at p. 2.]

Delaware reviewers spent a great deal of time on the modification issue. That State's 1990 review report recommended that the modification threshold be set at a specific dollar amount ($25 per month) rather than any percentage of the award. They reasoned that "[t]his language will avoid the problem of whether the changes in the formula are sufficient in and of themselves to warrant a modification of the order and the issuance of a modified wage attachment." [ 1990 Delaware Report, supra , at p. 9.] These reviewers also examined modification in light of second family expenses. They rejected an obligor's offensive useof such new expenses to decrease an existing support obligation, absent unusual circumstances, such as an unexpected and serious illness of a second family member. [ Id . at pp. 9 – 10.]

In 1994 Delaware reviewers made additional modification recommendations. They suggested that modification not be allowed within 2189 years of the last order, except where the moving party can prove that guideline application would produce an increase or decrease of at least 10 percent. Furthermore, reviewers noted that a decisionmaker should not be restricted by the moving party's upward or downward modification request, but the trier-of-fact would be expected to increase or decrease the order, as appropriate. [ 1994 Delaware Report, supra , at pp. 11 – 12.]

Alaska's review committee also considered modification in light of other family obligations and decided to permit support of a subsequent family as a defense to a motion for a support increase. [ Alaska Memo, supra , at p. 8.] Reviewers also recommended that health insurance premiums could be a modification factor. Therefore, premium cost not included in the existing order could be properly attributed to the requisite 15-percent material change in circumstances that would warrant modification. [ Id . at pp. 14 – 15.]

West Virginia reviewers found that a revision of the guideline formula, without more, would not be a sufficient ground for modification. Instead, a party requesting modification would have to show the following:

183There had been a change of circumstances, not contemplated by either party;

183The child's welfare required the requested modification; and

183Payments under the existing order were lower than 85 percent or higher than 115 percent of the amount under the revised guideline schedule. [ The third prong of the test would be omitted if there had been no guideline modification since the entry of the order in question. West Virginia Proposed Guidelines, supra , at p. 10.]

Both Arkansas and Massachusetts recommended the deletion of statutory language prohibiting modifications based on guideline formula revisions. The Massachusetts guideline provided that "[t]he guidelines, in and of themselves, do not constitute significant change of circumstances to warranta modification." [ Massachusetts Report, supra , at p. 16.] That language was "intended to reinforce the traditional rule that required parties to show a substantial change in the factual circumstances of the case before a modification of the support order will be granted." [ Id . (emphasis added).] Reviewers found that guidelines were presumed to provide appropriate child support in all modification cases. Furthermore, the changes prompted by periodic review and adjustment of child support orders required a departure from the sentiment that guidelines were insufficient to measure change of circumstances. [ Id .]

Arkansas reviewers noted that, when guidelines were adopted, there was concern that they would trigger "massive petitions for modification." Because this anticipated result never materialized due to changes in Federal regulations, the committee reevaluated the provision. The conclusion was that guidelines were to be used to both establish and modify awards. [ Arkansas Guideline Petition (committee recommendations), supra , at pp. 2 – 3.]

At least two State reviews also investigated the use of pro se modification processes. In Alaska the reviewers recommended the development of a simple modification process for pro se litigants. [ Alaska Memo, supra , at p. 16.] Nevada reviewers ultimately concluded that the matter was beyond their authority. Notwithstanding this decision, they reached a consensus that the implementation of low- or no-cost pro se modification procedures should be attempted. [ Nevada Report, supra , at p. 41.]

Automatic Award Adjustments

Several States considered whether child support awards should contain provisions for automatic adjustments due to cost-of-living increases and/or guideline changes. Automatic support adjustments based on cost-of-living changes were considered by Nevada reviewers. "The idea [was] to keep parties out of court longer by making awards reflect changing economic conditions so as to maintain the same amount of relative support irrespective of inflation....The goal [was] to save money for both the litigants and the system that they would otherwise have to expend to get a modification." [ Id . at p. 42.] The committee was split between those favoring anautomatic adjustment process and those opting for a pro se procedure. While they all agreed that some form of a streamlined adjustment procedure was necessary to incorporate cost-of-living changes, they could not agree on a process. Members preferred to pass the matter to the family courts for a decision regarding the propriety of legislative direction to resolve the impasse. [ Id . at p. 43.]

It appears that the Alaska court had developed an order form that encouraged automatic cost-of-living increases. However, reviewers recommended that the references to automatic cost-of-living increases be deleted from the orders because such increases had not been envisioned by the State rule. [ Alaska Memo, supra , at p. 20.] It appears the guideline authority approved this recommendation.

The Connecticut committee's 1991 report indicated that automatic adjustment clauses were not included in the guidelines due to the complexity of such provisions. According to reviewers, the issue would be best left to the discretion of support decisionmakers. [ 1991 Connecticut Report, supra , at p. 7.]

The Utah committee recommended the addition of statutory language to allow stipulations for the automatic adjustment of orders under certain circumstances. [ Utah Report, supra , at p. 7.] However, it did not appear that the committee authorized a blanket approval of automatic adjustments.

Retroactive Child Support

Retroactive child support is an engaging issue. It may be used in separation or out-of-wedlock birth cases, where the CP or the State seeks reimbursement for some of the expenses incurred on behalf of the child before the effective date of the child support order. Another application of retroactive support is in cases where the obligor seeks to delay proceedings interminably to avoid the child support obligation for as long as possible. When this occurs, the decisionmaker has the ability to order an award back to the date of the petition's filing or to some other reasonable time, thereby minimizing the negative fiscal impact of adversarial tactics on the child.

Not many States analyzed retroactive child support in their guideline reviews. However, there was some noteworthy discussion in the reports of those States that did. The retroactivity of temporary child support orders was the issue in Kentucky, whose 1991 reviewers recommended that temporary child support orders should be retroactive to the filing of theappropriate motion. They found that attorneys and judges generally did not follow the current law. Thus, the proposed retroactive support amendment, coupled with an amendment regarding ex parte temporary orders, would "provide for the early commencement of temporary child support while affording the adverse party acceptable notice and opportunity to be heard." [ First Report of the Kentucky Child Support Guidelines Commission (September 10, 1991), pp. 4 – 5, hereafter referred to as the " 1991 Kentucky Report. "] It appears that this recommendation was not enacted because it was offered again by 1993 reviewers. [ Second Report of the Kentucky Child Support Guidelines Commission (November 15, 1993), pp. 3 – 4, hereafter referred to as the " 1993 Kentucky Report. "] Kentucky's commission also considered the possibility of allowing child support to be obtained retroactively through age 19, as long as the child was in high school at the time the legislation was passed. However, members appear to have rejected this proposal because it is not included among the committee's final recommendations for that year's review. [ Kentucky Child Support Guidelines Review Commission Minutes (July 21, 1993), p. 1; see generally 1993 Kentucky Report.] Following Tennessee's review, a new provision was added to that State's guideline. Initial support orders had to include retroactive child support from the child's date of birth, the date of the parent's separation, or the date of abandonment, whichever is appropriate. That monthly retroactive amount would be calculated according to the guidelines, using the obligor's average income over the previous 2 years as the support basis, unless rebutted. The obligor would have a reasonable monthly amount added to the ongoing support order so that the arrears, related to the retroactive amount, could be reduced in a timely manner. [ Tennessee Rulemaking Hearing Rules, supra , at p. 6.] Alaska's reviewers recommended amendment of the rule regarding the retroactive modification of child support orders. They recognized the Federal prohibition on retroactive modification of awards but noted that Federal law would permit modification back to the date a motion for modification was served. The sentiment was that the State rule reflected the Federal legislation but had not allowed such retroactive award setting in administrative hearings. Thus, they proposed an amendment that also would apply to the administrative process. [ Alaska Memo, supra , at pp. 10 – 11.] Spousal Support

While most review topics specifically dealt with the calculation of child support, some teams also considered related matters such as spousal support. Colorado's 1991 review team deliberated the propriety of changing the child support calculation scheme to prevent alimony from being deducted from the income of the obligor and added to the obligee's income prior to the calculation of support. This was envisioned by some as a way to "symbolically place the child first in the allocation of parental income and...simplify the process for the court in allocating payments between child support and maintenance." [ 1991 Colorado Report, supra, at p. 15.] Alternatively, opponents of the change offered that it would "absolutely reduce the income available to pay child support, and it would introduce a perception of unfairness if that reduction in income were not reflected in the calculation. [It also] would...reduce benefits available to families by tax planning the allocation of payments between maintenance and child support." [ Id. at p. 16.] Based on their discussion, the committee rejected the change.

In Connecticut alimony payments to the other parent of the subject child would not be an income adjustment. Reviewers felt that child support should be established "either before the award of alimony or in conjunction with a coordinated plan for total family support, subject to the applicable deviation criterion." [ 1994 Connecticut Guidelines, supra , at p. 10.] The review team purposely declined to require the obligated parent to show that these alimony amounts were actually paid. There is a presumption that payment is made "in deference to the sanctity of a court order and in recognition that unpaid orders remain subject to enforcement and future collection." [ Id .] However, the guideline commentary did provide that whenever a trier-of-fact finds that payment is not being made, she has discretion to disallow the income deduction. Reliance on such discretion provides greater assurance that the family at issue would not be deprived of funds that the obligor has chosen to retain. Another reason for leaving the treatment of alimony to the discretion of the decisionmaker is that the review commission's mandate was limited to an analysis of child support and not spousal support. [ Id .]

Commenters in North Dakota attempted to have alimony treated in the same manner as child support for the parent's other children. However, reviewers declined to accord these obligations similar status, reasoning that such deductions were "policy determination[s]....It reflects a consideration ofthe significance of the obligor's responsibility to support all of the obligor's children. That support responsibility is more significant than the responsibility to a former spouse, and more significant than the responsibility to repay student loan debts." [ Proposed North Dakota Guidelines, supra , at p. 7 (emphasis in original).]

The South Carolina team made an interesting distinction between the handling of alimony for the obligee and alimony for a different former spouse. [ South Carolina did not send materials outlining the review that preceded the issuance of its 1990 guideline. This alimony distinction appears in the 1990 guidelines, but it is unclear from the submitted materials whether it is new to that version of the guideline or whether it existed previously.] Any existing child support order or alimony for a different spouse was to be protected; therefore, alimony actually paid to a former spouse other than the obligee constituted an adjustment to gross income. [ South Carolina Guidelines Handbook (May 1990), p. 5, hereafter referred to as the " 1990 South Carolina Guidelines. "] An alimony award between the parties is handled differently: such a payment would be deducted from the payor's gross income and added to the recipient's gross income. [ Lump sum rehabilitative or reimbursement alimony may be considered as a possible ground for deviation. Id . at pp. 4 – 5.] The committee supported this action by stating the following:Each parent's proportional share of total combined monthly income changes with the introduction of any alimony award between the parties. [Thus, equity requires] a sharing of the Total Combined Monthly Child Support Obligation based upon each parent's actual percentage share of the total combined monthly income, taking into consideration the financial impact of any alimony award between them rather than the parent's share of the total combined monthly income as it existed before any alimony award. [ Id. at p. 4.] Support Enforcement

Most State review materials reflect that the teams typically addressed matters specifically related to the establishment or modification of support orders. Few State reviews touched on such far-reaching matters as the enforcement of support. However, deliberations about enforcement (more specifically, income withholding) did appear in two State reports. Idaho reviewers debated whether income withholding should be formally incorporated into the State child support guideline. They concluded that atthe time income withholding was adequately covered by State statute; therefore, it did not need to be added to the guideline. [ Idaho Minutes, supra , at p. 5.]

In addition to guideline-related discussion, Ohio's team indicated that they also "expressed concern over the confusion caused by the wide variety of different income withholding orders in use by courts and [State child support agencies]." [ Ohio Report, supra , at p. 4.] To eliminate this confusion, the committee recommended that the State supreme court draft a uniform income withholding order for use by the courts and administrative tribunals. [ Id .]

Arrears

Another related issue that appeared in a small number of State review materials is the treatment of child support arrears. The materials from two States151Idaho and Connecticut151mentioned the topic. Idaho's discussion of arrears was very brief. One CP, who was a member of the review committee, suggested the system should not ask an NCP to delay proceedings for an interminable period, depriving the child of ongoing support, and also be responsible only for the payment of arrearages. In support of this assertion, the reviewer cited a personal situation in which a modification hearing was delayed for 2 years. The committee "explained...that this [was] the method of handling these cases, and...that theoretically the custodial parent might have to borrow money to support the child until the child support was increased so that the lump sum award for arrearages [would] not necessarily [be] a windfall to that parent." [ Idaho Minutes, supra , at p. 3.]

The 1991 Connecticut reviewers considered the determination of arrearage amounts, However, they decided that the matter was not within the scope of their function and accordingly took no action. [ 1991 Connecticut Report, supra , at p. 7.] By 1994 Connecticut's statute required the development of guidelines for arrearages, based on the obligor's ability to pay. [ 1994 Connecticut Report, supra , at p. xi. The committee interpreted this provision to apply only to periodic arrearage payments; thus, lump sum arrearage payments were not incorporated into the guidelines. Such payments were left to the discretion of the decisionmaker.] Reviewers cited six criteria for the arrearage guideline:

149Any arrearage guidelines had to "be fairly simple to understand and apply[.]" [ Id.]

149Arrearage payments should be based on a percentage of the current child support order. Reviewers selected 20 percent of the current order as reasonable for most cases. In cases without current orders, an arrearage amount would be imputed based on the regular child support guidelines.

149The team recognized that basing the arrearage determination on the current support order inherently implicates the obligor's ability to pay. However, they found that there should be a more indepth analysis of obligor ability to pay. For example, the arrearage payment scheme, combined with the periodic ongoing support award, should not exceed 55 percent of an obligor's net income. The obligor must be permitted to retain at least $145 per week, the minimum self-support reserve amount. If the obligor is considered "low income," he should be ordered to pay $5 per week for the arrearage, as long as that payment does not take his weekly income below the $145 self-support reserve amount.

149Recognizing that arrears may be owed to both the State and the family, reviewers decided that "the bulk of any arrearage payments should be paid to the family." [ Id . at p. xii.] In keeping with this sentiment, the State could retain only $5 of any arrearage, if monies were owed to both the State and the family.

149The committee decided that there should be special consideration given in cases of obligors who live with the child when the arrearage order is entered. Thus, in such cases, the $5 minimum would be assessed to any obligor whose income was less than 250 percent of the poverty level for the obligor's household size. Alternatively, if the obligor's income exceeded that amount, the guidelines would require a payment of 20 percent of the imputed support amount.

149When an obligor has been relieved of the support obligation because all children have reached the age of majority, the arrearage payment amount may be increased to 50 percent of the imputed current support obligation. [ Id .]