Lower Income Individuals pay a Greater Percentage of Their Income as support
The non-custodial parent will pay about 20% of every extra dollar they earn at lower income levels. At higher income levels, they will only pay about 11% of every extra dollar. For this analysis all other factors affecting child support have been put at zero, which will allow us to see the changes in income due solely to changes in the “other parent” income.
Worksheet A – Lower Income Individuals
|
|
Custodial Parent |
Other Parent |
Combined |
|
1. Gross Monthly Income |
0 |
1000 |
1000 |
|
2. % of Total Income (Each parent's income divided by combined income) |
0% |
100% |
|
|
3. Number of Children |
|
|
1 |
|
4. Basic Support |
|
|
206 |
|
5. Health and Dental Insurance |
|
|
|
|
6. Work Related Child Care |
|
|
|
|
7. Additional Expenses |
|
|
|
|
8. Total Support (add lines 5, 6 and 7 for each parent and for combined column. |
|
|
206 |
|
9. Each Parents Obligation (Combined column Line 8 x each parent’s line 2) |
206 |
206 |
|
|
10. Enter Amount for each parent from line 8. |
|
|
|
|
11. Each Parent’s net obligation (subtract Line 10 from Line 9 for each parent) |
206 |
206 |
|
“Other parent” pays custodial parent $206.00 per month.
What happens if the “other parent” earns $100 more per month?
|
|
Custodial Parent |
Other Parent |
Combined |
|
1. Gross Monthly Income |
0 |
1100 |
1100 |
|
2. % of Total Income (Each parent's income divided by combined income) |
0% |
100% |
|
|
3. Number of Children |
|
|
1 |
|
4. Basic Support |
|
|
224 |
|
5. Health and Dental Insurance |
|
|
|
|
6. Work Related Child Care |
|
|
|
|
7. Additional Expenses |
|
|
|
|
8. Total Support (add lines 5, 6 and 7 for each parent and for combined column. |
|
|
224 |
|
9. Each Parents Obligation (Combined column Line 8 x each parent’s line 2) |
|
224 |
|
|
10. Enter Amount for each parent from line 8. |
|
|
|
|
11. Each Parent’s net obligation (subtract Line 10 from Line 9 for each parent) |
|
224 |
|
The Child Support here is $224 per month. The extra $100 earned by the “other parent” increases the child support obligation by $18. For lower income individuals, the marginal child support rate is about 18%. This means for every $100 in income, the child support obligation increases by about $18. Notice also that the child support is exactly 20% of the total income (224/1106=20%).
Now let’s do the same thing with higher income individuals.
Worksheet A – Higher Income Individuals
|
|
Custodial Parent |
Other Parent |
Combined |
|
1. Gross Monthly Income |
0 |
7900 |
7900 |
|
2. % of Total Income (Each parent's income divided by combined income) |
0% |
100% |
|
|
3. Number of Children |
|
|
1 |
|
4. Basic Support |
|
|
884 |
|
5. Health and Dental Insurance |
|
|
|
|
6. Work Related Child Care |
|
|
|
|
7. Additional Expenses |
|
|
|
|
8. Total Support (add lines 5, 6 and 7 for each parent and for combined column. |
|
|
884 |
|
9. Each Parents Obligation (Combined column Line 8 x each parent’s line 2) |
|
884 |
|
|
10. Enter Amount for each parent from line 8. |
|
|
|
|
11. Each Parent’s net obligation (subtract Line 10 from Line 9 for each parent) |
884 |
884 |
|
“Other parent” pays custodial parent $884 per month.
What happens if the “other parent” earns $100 more per month?
|
|
Custodial Parent |
Other Parent |
Combined |
|
1. Gross Monthly Income |
|
8000 |
8000 |
|
2. % of Total Income (Each parent's income divided by combined income) |
0% |
100% |
|
|
3. Number of Children |
|
|
1 |
|
4. Basic Support |
|
|
892 |
|
5. Health and Dental Insurance |
|
|
|
|
6. Work Related Child Care |
|
|
|
|
7. Additional Expenses |
|
|
|
|
8. Total Support (add lines 5, 6 and 7 for each parent and for combined column. |
|
|
892 |
|
9. Each Parents Obligation (Combined column Line 8 x each parent’s line 2) |
|
892 |
|
|
10. Enter Amount for each parent from line 8. |
|
|
|
|
11. Each Parent’s net obligation (subtract Line 10 from Line 9 for each parent) |
|
892 |
|
The Child Support here is $892 per month. When the “other parent” earns $100 more per month, the child support increases by $8. For higher income individuals, but below $8,000 in combined income, the marginal child support rate is about 8% of each new dollar earned. Notice also that the child support is exactly 11% of total income (11% = 892/8000). For families with combined incomes of greater than $8,000, the guidelines say you are to use a flat rate of 11% to calculate child support. Accordingly, the marginal child support rate for those individuals is 11%.