Failure to pay child support is an increasingly common problem during difficult economic times. In this age of stagnant incomes and fewer high paying jobs available in the marketplace, child support obligors may find themselves unable to pay their court ordered obligations.
Most often, the person who owes the money, the obligor, has a legitimate reason for their inability to pay, such as health problems, job loss or forced early retirement. Sometimes a little bit of investigation may show that the obligor’s reason for not paying their child support is not be legitimate
If the obligor suffers a significant drop in income through no fault of their own, resulting in a legitimate inability to pay the full amount of their child support obligation, the obligor can go back to court to obtain a court order for lower child support payments. In Minnesota, if the obligor’s financial circumstances would result in a basic child support order that was at least 20% lower (or higher) than the current order, the Court would consider that current order to be presumptively unfair.
When the obligor is fired or laid off from their job, resulting in significant income loss or reduction, the court will often reduce the basic child support payments if the obligor files a motion for modification. If the obligor engaged in deliberate misconduct that led to their dismissal, the court may refuse to lower the amount of child support.
If the obligor quits a higher paying job to take a job at lower pay, the person who receives child support, the obligee may stop the court from lowering a child support payment even though the obligor’s income has dropped enough to make the existing child support amount unfair. For example, an obligor quits their job as a computer programmer with a salary $150,000 per year and takes a job as an accountant earning $100,000 per year. A court would likely find the obligor chose to have their income drop by 33% and that obligor is “voluntarily underemployed.” Where the court finds voluntary underemployment it may impute income to the obligor at the level of his previous employment in the amount of $150,000 per year. Child support would therefore be based in part on the $150,000 level of income and so the current order stand, even though it is presumptively unfair under the law. This policy prevents people from temporarily taking a low paying positions for the purpose of lowering their child support and then returning to higher earning employment once the lower order is in place.
This same legal presumption works in favor of the obligee. If there is evidence available that obligor’s income has increased such that a recalculation of basic child support under the Minnesota Guidelines would result in a basic child support amount that is 20% higher, the existing order would be considered presumptively unfair. These circumstances would provide the grounds to return to court to modify basic child support to a higher amount.
We always recommend that when the parties are negotiating a settlement of a divorce or submitting proposed orders to a judge after a divorce trial, they include a provision in the Order that requires the parties to exchange income information each year including the last 3 pay stubs of the calendar year, their W-2, 1099, or K-1 forms and their tax returns. This information may provide the basis for a motion to modify child support based on obligor’s increase in income. Obligee’s income also has an effect on child support.
You should consult an attorney to determine whether it is the right time to file a motion to modify child support whether you are the obligor or the obligee.
This 20% presumption only applies to basic child support. Childcare support and medical care support are both based on the actual cost. In other words, if child care and medical insurance costs either increase or decrease in any amount, the obligee can still seek an order that would increase the obligor’s childcare support payment. Depending on the actual costs it may not be worth the attorney’s fees and time required to return to Court to get a higher payment. If there is only one child involved it probably would not be worth returning to court, but if there were 4 or 5 children involved the higher costs add up quickly and may justify filing a motion to modify.
We also recommend adding a provision in any divorce settlement or proposed order that provides for the parties to exchange childcare and health insurance costs each year and to modify child support payments to reflect any increased or decreased costs. We also recommend that the parties provide for ways to reimburse each other at the end of the year for childcare costs that might have significantly increased or decreased during the year in the normal course of the children’s activities.
Child support calculations may seem like simple math, but many different factors contribute to what the court might decide when the parties seek to modify child support. A local attorney can often provide a parent with a good recommendation on how to proceed after a brief consultation.
By: Senior Associate Attorney, Michael H. Fink