How to Calculate the Correct Presumed Child Support Amount | Paule, Camazine & Blumenthal, P.C.

By Bruce E. Friedman and Kathryn L. Dudley

In 1989, the Missouri Supreme Court adopted Rule 88.01 entitled Presumed Child Support Amount and Civil Procedure Form No. 14.1 Since then, both Rule 88.01 and Form 14 have been amended twice, most recently in 1998. Some judges and attorneys believe that the child support guidelines add a measure of certainty to the child support process and, as such, have a positive impact on the settlement of cases. It is debatable whether guidelines have reduced litigation or fees associated with negotiating child support. What is certain is that when the court or attorneys blindly follow Form 14, without considering its intricacies, the particular facts of each case, and all relevant factors, including those listed in sections 452.340 and 210.841, unjust results can and do occur. A thorough understanding of the directions for use, comments and assumptions underlying Form 14 is essential in order to properly calculate the correct presumed amount of child support prior to determining whether the result is unjust or inappropriate under the particular facts of each case. Moreover, it is critical that counsel gather adequate information for the proper completion of each line item on Form 14.

On October 1, 1998 the current version of Form 14 became effective. Substantial changes were made to the directions for completion and comments for use. In addition, the revisions included certain caveats and a list of factors and assumptions underlying the use of Form 14.

Line 1: Gross Income.

The 1998 revisions included a more detailed explanation of what constitutes Aincome. Nevertheless, line 1 is arguably the most fertile battleground regarding the completion of Form 14. This is because many cases have fact patterns that are not simple to determine and which do not easily fit within the four corners of the form. Notably, Comment A defines income as a financial benefit on money received that could have a positive impact on the parent's ability to support the parent's children.

The comments clarified that the court must first determine the maintenance award before calculating the presumed child support amount. Because there is no comparable guideline for determining the appropriate amount of maintenance, it is not unusual for counsel to prepare several Form 14's in order to calculate a range of possible child support amounts.

The directions also allow the court to consider overtime compensation (Comment B), bonuses (Comment D), secondary employment (Comment C), recurring capital gains (Comment E), prizes, retained earnings (Comment F) and significant employment related-benefits (Comment G) under appropriate circumstances. Often, however, counsel must persuade the court to include these items as income, as the argument can be made that the recipient may not have control over bonuses or overtime compensation or such income may be sporadic. The comments require the court to consider specific factors when determining if overtime compensation, bonuses, retained earning or capital gains should be included in the party's income. For each of these types of income, the comments indicate that the court must consider the amount of income received from these sources in the three years, or such time period as may be appropriate, prior to the beginning of the proceeding, as well as the realistic expectation that the income sources will continue to exist. It is therefore important to carefully investigate a party's earning history if the practitioner desires the inclusion or exclusion of this type of income. If there is a wide variance in the bonus or overtime compensation that a party received, the court may take an average of the party's income for the prior three years or some other period of time in determining the appropriate amount to include as income. A party seeking to prove that over overtime has been reduced may require testimony from the employer.

Another area of potential income that counsel must consider is the employment benefits received by a party. If a party's employer or company pays for his or her car, including payments, insurance, gas, repairs, cell phone, life insurance, meals, entertainment, health club membership, charitable donations, etc., then the cost of these items can be included in determining his or her income. Such benefits are often a hidden source of income, and counsel should seek the party's employment records, as well as examine tax returns, W-2 forms, and other documents in order to obtain this information. Special problems may be encountered when a party is a sole proprietor or owns a business entity since such individuals have more opportunity to pay for personal living expenses from the business.

In light of all of these factors, it is imperative that the attorney not rely solely on the information provided by the other party on a Statement of Income and Expenses when determining income. The counsel should obtain up-to-date income information from the party's employer or company regarding current income as well as bonuses and overtime compensation and employment-related benefits. The counsel should also carefully review the party's tax returns for a period of five years prior to the filing of the dissolution action to determine if the party has any other sources of income such as dividend income, capital gains, or secondary employment which the party has not disclosed.

As noted earlier, the definition of income in the directions and comments, is broad and not exhaustive. The comments require that a court consider all sources of income. Recently, the Southern District held that income includes all resources available to a parent, including where appropriate, a history of ongoing gifts received by a party.

Lines 2a-c.

Lines 2 a-c set forth certain adjustments that can be made to the income listed in Line 1. As these adjustments may increase or decrease a party's income, counsel should have a clear understanding of how to use these adjustments.

Line 2a allows for a party's income to be decreased by the amount of other court or administratively-ordered child support being paid. This adjustment means that if a party is actually paying child support for another child who is not the subject of the current proceeding, his or her income for purposes of determining child support in the current case is decreased by the amount of child support actually being paid.

However, if the current case involves a modification of a prior child support order, there are other factors to consider. The directions indicate that in a modification proceeding to increase or decrease the child support amount, the adjustment available to the moving party is the lesser of the adjustment to which the party was entitled for the particular child on line 2a or 2c when the existing order was entered, or the adjustment to which the parent was entitled for the particular child on line 2a as a result of an order in another action entered after the existing order.@ This language effectively prevents a party from using this adjustment to decrease his or her income in a modification proceeding if he or she is the moving party, based on a change in his or her responsibility to pay child support in another proceeding.

Line 2b sets forth the adjustment for maintenance being paid. We have previously discussed the impact of this adjustment on cases involving the current determination of both maintenance and child support in the same proceeding. However, a party is also entitled to this adjustment if he or she is paying maintenance as a result of a prior proceeding. The directions use similar language as set forth in the directions for line 2a with respect to the use of this adjustment in a modification proceeding. The party may also be entitled to use this adjustment for a maintenance award entered after the existing order for child support in a motion to modify child support if he or she is not the moving party.

Line 2c allows for an adjustment to gross income for other children in his or her primary physical care. This adjustment includes natural and adopted children but does not include step-children. The comments indicate children are considered to be in a parent's primary physical custody, despite their attendance at a school away from the parent's residence.

The amount of the adjustment is determined solely by calculating the child support amount on the parent's gross income and without any adjustments for other children for whom the parent is responsible. The adjustment can be reduced, however, by the amount that the parent is actually receiving in current support payments based on an existing court or administrative order. In modification proceedings, the directions yet again use language similar to the language set forth in the directions for line 2b so that this adjustment cannot be used to the advantage of the moving party in a modification proceeding.

Line 3.

After determining the proper adjustments to each party's income, the practitioner then calculates the adjusted gross monthly income for each party and determines the parties' combined monthly gross income and each party's proportionate share of this income. The combined adjusted income of the parties determines the basic child support amount according to the Schedule of Basic Child Support Obligations (the chart). Each party's percentage of the combined monthly income then determines his or her share of this amount. In Estrem v. Estrem, 984 S.W.2d 883 (Mo. Ct. App. 1999), the court found that even if one party's income exceeds the $15,000 monthly limit on the chart, the incomes of the party's must still be prorated as both parties have a duty to support the children. Determining the basic child support amount, however, does not end the process. Counsel must then consider if there are additional expenses which should be added to the basic child support amount as additional child rearing expenses. A major revision to Form 14 requires consideration of additional child rearing expenses for both the parent receiving support and the parent paying support. These expenses include reasonable work-related child care costs of each parent (line 6a-b), health insurance costs (line 6c) for the children who are subjects of the proceeding, uninsured extraordinary medical costs (line 6d), and other extraordinary child rearing costs, (line 6e). The consideration of these additional expenses provides a more realistic determination of the proper child support amount.

Line 6 a - e.

One of the expenses which may be added to the basic child support amount is the work related child care costs of the parent entitled to receive support. This expense is added on Line 6a of Form 14. In considering whether this expense should be added to the child support amount, the attorney must consider whether the costs are the actual work-related child care costs of the party. Furthermore, the expense may only be added if the income earned by the party during the time period in which the child care costs is incurred is included in the party's monthly income on Line 1 and his or her income exceeds the child care costs incurred. Due to the fact that child care costs often significantly increase the child support amount, counsel representing the payor spouse should obtain adequate documentation as to both the amount of this expense and whether they are actually incurred.

If a party incurs work-related child care expenses, such expenses must be included in the calculation of the child support chart. In Anderson v. Anderson, 4. S.W. 3d 639 (Mo. Ct. App. 1999), the appellate court found reversible error because the trial court did not include in its child support calculation the child care expenses but rather ordered father to pay a portion of these expenses off of the chart. The appellate court found that the chart must be calculated as directed, which requires the trial court to determine the day care expenses and include them on Form 14. After the proper calculation of Form 14, the court may then reject Form 14 as unjust and inappropriate under the circumstances and enter a different order regarding the payment of these expenses.

In calculating the appropriate child care costs, counsel must consider the child care tax credit that a party may receive. The tax credit is deducted from the child care costs before these costs are added to the basic child support amount. Another significant change to Form 14 in 1998 was the inclusion of the child care tax credit table on the chart itself. This table assists practitioners in determine the proper amount to deduct from the child care expense because of the tax credit.

Line 6b relates to the actual work-related child care costs of the parent obligated to pay support which are incurred during his or her periods of custody. The requirement still exists that the income earned during this time period must be included in the party's gross income on Line 1 and must exceed the child care expense. Furthermore, the comments indicate that another consideration in determining whether this expense should be included in the chart is whether the party who receives the child support must continue to pay for child care during the other party's periods of temporary custody and visitation.

Other additional child rearing expense which may be added to the basic child support amount is the cost of health insurance paid by a party for a child who is a subject of this proceeding as well as uninsured extraordinary medical expenses paid on behalf of a child. The inclusion of health insurance costs in the Form 14 is common and relatively simple as most parties are required to pay a certain, defined amount for insurance coverage for their children. On the other hand, the inclusion of extraordinary medical costs in the chart is much less common as most parties do not incur these expenses on a continuing basis requiring their inclusion in the chart. These expenses may only be included if agreed upon by the parties or ordered by the court.

Line 6e of Form 14 allows for the addition of other extraordinary child rearing costs. This item represents another fertile battleground for counsel due to the broad and non-exhaustive list of costs that may constitute other extraordinary costs. These costs, again, musts be agreed upon by the parties or ordered by the court. These expenses may include private or parochial school expenses that meet the particular educational needs of a child, or post-secondary educational expenses, as well as tutoring, lessons, extracurricular activities, camps, travel or other activities intended to enhance the athletic, social or cultural development of a child.

There is a relative paucity of authority on this point. Each case seems to be torn not only on its particular facts and proof, but also upon the trial court's discretion certain costs may appear to be insignificant, ordinary and routine in some cases and be this included on line 6e, whereas in other cases suit costs will be considered extraordinary, and included in line 6e. Without question, counsel must gather detailed information about lessons, activities, camps, etc. in order to include an appropriate amount on line 6e. Recently, in Bauer v. Bauer, No. 76387 (Mo. Ct. App., October 3, 2000), the Eastern District upheld the inclusion of a laundry list of camps, lessons, and extra-curricular activities, as well as the cost of parent's contribution to fund raisers, athletics, school pictures, PTO expenses and a school parents' association. The Appellate Court rejected the father's arguments that the inclusion of such costs undermined his authority as joint legal custodian and that he also had to duplicate some of the expenses, e.g. contributions and joining the associations.

After totaling the additional child rearing costs on Line 7 of Form 14, these costs are added to the basic child support amount. Each party's share of the total child support costs is then determined by multiplying his or her share of the parties' combined monthly incomes from line 4 by the total combined child support costs on line 7.

Line 10.

After determining each party's child support obligation, the payor parent's support obligation may be reduced. Line 10 provides the payor parent a credit for the additional child rearing costs paid or to be paid by that parent for items shown on lines 6a-3 and totals on line 7.

Line 11.

Perhaps the most controversial revision in 1998 was the inclusion of the so-called visitation credit. The payor parent may be entitled to an adjustment in his or her child support obligation based upon his or her rights of temporary custody and visitation.

The visitation credit is based upon the number of overnights of temporary custody or visitation that the party obligated to pay child support has with his or her children. The amount of the credit increases as the number of overnights increases. The assumptions underlying Form 14 provide that the chart is based upon expenses of an intact family and does not consider the costs incurred by the payor parent when that parent has custody. Further, the assumptions recognize that certain categories of expenditures may justify the visitation credit, whereas others may not. Since the credit on line 11 assumes that the percent's will exercise their respective periods of custody, a substantial failure to do so may be a basis for a motion to modify.

It should be noted that the table accompanying line 11 does not provide for a credit greater than 10%, the directions provide that if the parent obligated to pay support is or has been awarded periods of overnight visitation or custody for more than 109 days per year, the adjustment may be greater than 10%. Some judges are more willing than others to depart from the table and allow for a credit greater than 10%.

The directions also provide guidance for so-called split-custody arrangements and all indicate that deviation from the presumed child support amount may be appropriate when the children spend substantially equal time with both parents.

Line 12.

The presumed child support amount is shown on line 12. It is noteworthy that as the number of children entitled to support increases, the total amount payable for their support increases, but the increase per child is not at the same rate. It is assumed that children become emancipated oldest to youngest. The practitioner should carefully examine line 6a-e when calculating the sums for additional children in order to be certain that after child care costs are not inappropriately allocated.

The remaining comments under Form 14 provide a measure of guidance with respect to when a parent's Form 14 is rejected by the court and when a parent's Form 14 is rebutted. If both parent's forms are rejected by the court, the court must calculate its own Form 14. Several non-exclusive factors are provided as guidance for deviating from the presumed child support amount.

Although this article was not intended as a primer on how to rebut Form 14, the practitioner should always devote considerable attention to the directions, comments, caveats and assumptions contained with Form 14. The assumptions in particular provide numerous ideas for advocating a deviation from the guidelines if the facts of a particular case do not fall within the four corners of Form 14. Since many cases do not fall within the four corners, the opportunity exists for deviation if counsel gathers adequate information and devotes a measure of thought to the intricacies of Form 14.

The Southern District in Ledford v. Ledford, No. 23231 (October 5, 2000), reversed a trial court's deviation from Form 14 solely because the presumed amount would leave the payor payment with just over 38% of the total available net income of the parties. The court held that net income available to the respective parents was not, by itself, a relevant factor.

It should be noted that some courts give serious consideration to available funds or available net income. It remains to be seen whether the Southern District's decision alters this analysis by attorneys and trial courts.

Due to the general reluctance by courts to deviate from the presumed child support amount, it is incumbent upon the practitioner to prepare a correct Form 14 so as to properly protect the client's interests.