WHO PAYS CHILD SUPPORT?

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According to New York Family Court Act (“FCA”) and Domestic Relations Law (“DRL”), a non-custodial parent is obligated to pay child support to a custodial parent until the child reaches the age of 21 or becomes emancipated (moves out of the parent’s home, works and supports himself, gets married or joins military service).

Child support guidelines are determining the amount of child support. The amount of support is 17% of income for one child, 25% for 2 children, 29% for 3 children, 31% for 4 children, at least 35% for 5 or more children. These calculations are applied to the income level up to $148,000 annually. Above that amount, the Court has the discretion to determine the child support amount. There are certain deductions from income, such as some taxes and Court-ordered support payments to other children.

Often in our practice, clients ask us how they can modify their child support obligations. As life circumstances change, people change jobs, their income may be reduced or their business may not do well, or they may start another family. So, it is completely understandable that people would try to adjust their child support payments.

First of all, it is very important to take the original agreement or stipulation regarding child support very seriously. Sometimes people get tired of going to Court, paying their lawyers, and they just want to get it over with. This is why some people who are caring for the child (custodial parents) may agree to a child support payment that is inadequate to finance properly raising the child, including his or her housing, schooling, extra-curricular activities, health-related expenses, food, clothing, vacations, summer camps, etc.

On another hand, sometimes non-custodial parents, who are obligated to pay child support, may agree to the excessive amount of support simply because they do not want to pay lawyers anymore or are tired of going to Court. They also may be under pressure while going through a divorce or domestic violence case (criminal), and lawyers or parties to the case may improperly influence their decision by conditioning the disposition of other aspects of divorce (such as custody and visitation or equitable distribution of property), domestic violence criminal case (agreeing to a non-criminal disposition and a limited order of protection) or custody and visitation case in a Family court when the parties are not married or did not file for divorce, on the amount of the child support. This approach is definitely near-sighted, since dependent on the child’s age, you may have continuing obligations for years to come and will end up overpaying tens of thousands of dollars.

Family Court Act (“FCA”) provides for three grounds for the child support modification petition that can be filed in Family court. FCA §451(3).

The first ground is a substantial change of circumstances. That must be something serious, beyond just a temporary reduction in income. For example, serious sickness and disability, leading to a substantial decrease in income, may constitute a substantial change of circumstances. Another example would be the incarceration of a non-custodial parent on a case not related to non-payment of child support or domestic violence against the child or another parent of the child. It is important to understand that change of circumstances must be involuntary and not caused by the prospective petitioner himself (e.g. person is resigning from a high-paying job and refusing to look for employment). Family Court Judge would expect the prospective petitioner to actively seek employment commensurate with his education, experience, professional training, and abilities. This ground for child support modification cannot be waived in a stipulation or agreement.

Another ground for child support modification is a reduction in income by 15 percent or more since the last time the order was issued, adjusted, or modified. This ground can be voluntarily waived by parties’ agreement or stipulation.

The third ground for the modification, which can also be voluntarily waived by parties’ stipulation, is that three years or more passed since the last time the order was issued, adjusted, or modified.

To file a proper petition for modification, the non-custodial parent must gather all relevant financial information, such as his pay stubs, income tax returns, bank statements, etc. Petitioner and respondent will be required to complete under oath and file in Court Financial disclosure affidavit. In that document, parties will have to disclose all of their income, assets, as well as document monthly living expenses. Please keep in mind that opposing attorneys, as well as Court, will closely examine such affidavits and if expenses are unrealistic or expenses are exceeding the income, most definitely would question the party who filed that Affidavit regarding the discrepancies.

One other aspect of the child support litigation that often comes up in conversations with our clients, is the definition of income according to the Family Court Act. It is possible that person may have very low income according to his or her Income tax return, the accountant would confirm the validity of that income tax return and IRS or NYS Department of Taxation would not question this return and consider it valid, and yet, Family Court Judge would recalculate the person’s income upwards in accordance with the Family Court Act’s definition of income.

Let’s see what might be different between the IRS’s definition of taxable income and the Family Court Act’s definition of income for the purposes of child support determination. As a baseline, according to FCA §413(5), income is defined as the sum of the following components with certain reductions as provided by law:

• Gross (total) income as should have been or should be reported in the most recent federal income tax return • Investment income with proper reductions • Workers compensation • Disability benefits • Unemployment benefits • Social security benefits • Veterans benefits • Pensions and retirement benefits • Fellowship and stipend • Annuity payments • Alimony or maintenance actually paid to a spouse who is a party to the case with proper adjustments

Moreover, in Court’s discretion, the Court may attribute or impute income from the following sources:

• Non-income producing assets • Meals, lodging, membership, automobiles, or other perks that are provided as part of the compensation for employment with certain limitations • Fringe benefits of employment • Money, goods, and services provided by friends and relatives • An amount imputed as income based upon the parent’s former resources or income, if the Court determines that the parent intentionally reduced his income to avoid paying proper child support • Entertainment and travel allowance from business with certain restrictions

As you can see, this expanded definition of income by FCA is drastically different than IRS’s definition of total income. Moreover, people should take notice, that if they operate a cash business and underreport their business gross income, the Court may conduct a hearing to determine whether business income is underreported. For example, some people claim a gross annual income of only $15,000 when they are self-employed, whereas their annual rent is higher than that amount. It is obvious in such situations that people underreport their income on purpose.

You should be aware that both parties and their respective attorneys are allowed to conduct discovery including serving subpoenas on financial institutions, such as banks and credit card companies. Detailed analysis of the returns of such subpoenas may cause the Court to re-examine the claimed income of the Petitioner or Respondent and recalculate the amount of child support.

We are urging everybody to consult with the experienced Family Court attorney dealing with child support cases before entering a final stipulation of settlement and agreeing to unfair or unrealistic child support payment