What’s New? The 2011 Child Support Guidelines
Article Date: Wednesday, March 02, 2011
Written By: Elise Morgan Whitley
Change is the law of life.
~ John F. Kennedy
Love them or hate them, the North Carolina Child Support Guidelines play a major role in any domestic practice. And, just when you thought you knew them inside and out, they have been modified.
Federal law requires every state that receives Temporary Assistance for Needy Families to establish child support guidelines. In 1987, North Carolina, by and through the Conference of the Chief District Court Judges (“the Conference”), adopted advisory guidelines and three years later implemented the first set of mandatory presumptive guidelines. Since that time, the guidelines have been modified six times, most recently with the 2011 Child Support Guidelines that went into effect on Jan. 1, 2011.
The Conference meets twice annually and is composed of four district court judges from around the state of North Carolina. Prior to the adoption of the 2011 Guidelines, in April 2010, the Conference held a public hearing in Raleigh that was attended by approximately 30 individuals. In addition to the comments from the public meeting, the Conference received input from a variety of other sources, including judges, individuals involved with child support enforcement and IV-D offices, and the NCBA Family Law Counsel to name a few.
So, what’s new with the 2011 guidelines? The short answer is a lot! There are many differences between the 2006 and the 2011 Guidelines. In the four years between the 2006 and 2011 guidelines there were significant Court of Appeals opinions that directly impacted the guidelines and which the 2011 Guidelines have been modified to reflect. In addition, the guidelines have been impacted by the financial and economic collapse of the past several years. The economic climate has affected the underlying data used to determine support obligations. The changes to the underlying data used in the 2011 Guidelines resulted in changes to the basic support obligations which in turn have changed the calculations, especially those on the extreme end of the income scale, in significant ways.
This article will briefly address the following major differences between the 2006 and 2001 Guidelines:
1. Retroactive Child Support. Methods of
determination of retroactive support and
changes to the guidelines taken from
Carson v. Carson;
2. Income. Exclusions from income from
Caskey v. Caskey and Dillon v. Rains;
3. Basic Support Obligations. Changes to
the basic support schedule from new
data and the effect on low-income and
high-income parents; and
4. Pre-existing Support Deduction.
Clarification regarding exclusion of
arrearage payments and changes to the
deductions used and to the calculation
of child support when multiple child
support obligations are involved.
This article is by no means includes an exclusive list of all of the changes from the 2006 to the 2011 Child Support Guidelines. In addition to the changes referenced above, there are other changes including language regarding the applicability of the Guidelines to domestic violence (50-B) matters and clarification to the language regarding social security benefits.
Retroactive Child Support:
Prospective child support is support from the time of filing of a claim forward and it is presumptively determined by the application of the North Carolina Child Support Guidelines. In order to seek retroactive child support, child support during the (up to) three-year period before the filing, a claim must be made for retroactive child support. The 2011 Guidelines feature two changes concerning the issue of retroactive child support.
Retroactive Child Support – Two Major Changes:
The first change is the implementation of the holding from the 2009 Court of Appeals decision of Carson v. Carson which dealt with the determination of retroactive child support when there is an unincorporated support agreement. The second change clarifies which guidelines to use when calculating retroactive support.
The 2006 Guidelines gave the trial court two methods to determine retroactive support. The first method was the retroactive application of the guidelines. The second method, which was long the standard, was the determination of retroactive support based upon the obligated parent’s fair share of the expenses actually paid by the custodial period on behalf of the child during the (up to) three-year period immediately prior to the filing.
Retroactive Support – Practical Issues:
The court still has the choice between basing retroactive awards on the guidelines or on the fair share of actual expense paid model. What this means for you is that you will have to prepare both analyses for the trial court’s consideration. While the guidelines do not require the court to consider both methods, we should be prepared to argue both in the event the court is inclined to reject one method. Also, practically, the determination of the paying parent’s fair share based on the actual expense paid by the custodial parent is a much more difficult and paper-intensive method of establishing retroactive support.
Retroactive Support When an Unincorporated Agreement is in Place:
The Court of Appeals holding in Carson v. Carson, 680 S.E.2d 885, 2009 N.C.App. LEXIS 1378 (2009), limited the circumstances in which retroactive child support could be determined by the two previously enumerated methods. In reaching their conclusion, the Court of Appeals in Carson provided an in-depth examination of the issues of retroactive support and the case law concerning the issues of support in unincorporated agreements.
In Carson, the trial court ordered retroactive child support in an amount inconsistent with the parties’ unincorporated agreement and did so without finding an emergency on which to alter the amount in the parties’ agreement. In reversing the trial court, the Carson opinion specifically holds that the Conference, in establishing the 2006 Guidelines, overstepped their authority. The court held that the Conference was not authorized to override existing case law agreement (specifically, Fuchs v. Fuchs, 260 N.C. 635, 133 S.E.2d 487 (1963)) concerning retroactive support where there is an unincorporated separation agreement in their formulation of the Guidelines.
Consistent with Carson and Fuchs, under the 2011 Guidelines, it is clear that when parents have established a child support obligation in a valid unincorporated contract then the contract conclusively determines the child support obligation during the time before a child support action is filed. The Court of Appeals opinion did leave the caveat to rebut this rule when it is shown that the custodial parent has incurred emergency expenses for a child in which the other parent should share. However, absent the emergency exception, a trial court cannot enter a retroactive child support order in an amount other than the contractually agreed upon amount.
The Guidelines include the Carson holding by specifically inserting the following language: “if a child’s parents have executed a valid, unincorporated separation agreement that determined a parent’s child support obligation for the period of time before the child support action was filed, the court shall not enter an order for retroactive child support or prior maintenance in an amount different than the amount required by the unincorporated separation agreement.” (2011 Child Support Guidelines.)
Which Guidelines to
Use in Retroactive Calculations:
If the trial court determines that retroactive support should be ordered, finds that there is no unincorporated agreement for support, and decides to use the guidelines to make the calculation, which guidelines should the trial court use? To alleviate any confusion that may exist in calculating retroactive support by the guidelines, the 2011 Guidelines state that retroactive calculation should be made “by determining the amount of support that would have been required had the guidelines been applied at the beginning of the time period for which support is sought.” This clarification should obviate the need in most cases to provide the trial court with numerous varied calculations for the retroactive period at issue.
Income: New Exclusions from Income:
The Guidelines have long provided a broad definition of income. The 2011 Guidelines include new exclusions from that broad list based on two Court of Appeals opinions.
The first exclusion removes from the income definition funds that are received by a parent as support for a child who is not the child at issue in the determination. This exclusion was added in response to the 2008 decision of New Hanover Child Support Enforcement on behalf of Dillon v. Rains, 193 N.C. App. 208, 666 S.E.2d 800 (2008). The court in Dillon held that child support received by a parent for another child (that is the child not at issue in the determination before the tribunal) must be included as income because, based on a statutory construction argument, the 2006 Guidelines did not exclude such payments.
The Court of Appeals in recognizing the inequity of this result specifically urged the Conference to examine the definition of income and to exclude the payments received by a parent for another child or other children residing in the home. The Court states: “Despite our holding, we are inclined to agree with defendant that including child support payments received for one child as income when calculating the support obligations for another child effectively reduces the amount of income available to the child for whom child support is received. . . . We would urge the Conference to closely consider the effects of including child support payments received on behalf of a child residing in the home as income and clearly indicate in the Guidelines how child support payments should be addressed when calculating payments for another child residing outside of the home.” Dillon, 193 N.C. App. at 213, 666 S.E.2d at 803.
The 2011 Guidelines, in response to the Dillon opinion, exclude from the definition of income the amounts of child support payments received by a parent for another child in the home.
The second exclusion removes from income the amounts paid by employers directly to third parties on behalf of an employee. The 2010 Court of Appeals opinion in Caskey v. Caskey, 698 S.E.2d 712, 2010 N.C.App. LEXIS 1650 (September 7, 2010), includes an in depth multi-jurisdictional analysis of the treatment of monies paid by employers on behalf of employees and the impact those monies have on the income determination in child support.
After a detailed analysis, the court in Caskey held that “contributions made by an employer to an employee’s retirement accounts, including any 401(k) accounts, and insurance premiums, may not be included as income for the purposes of the employee’s child support obligations unless the trial court, after making the relevant findings, determines that the employer’s contribution immediately support the employee in a way that is akin to income. We place particular relevance on a determination concerning whether the employee may receive an immediate benefit from the employer’s contribution, such that the employee’s present ability to pay child support is thereby enhanced.” Caskey, 698 S.E.2d at 718, 2010 N.C. App. LEXIS 1650, **19.
The 2011 Guidelines adopt a more streamlined version of the Caskey holding and now state specifically, “amounts that are paid by a parent’s employer directly to a third party or entity for health, disability or life insurance or retirement benefits and are not withheld or deducted from the parent’s wages, salary or pay.” (2011 Child Support Guidelines.)
A Fundamental Change: The Economy and the Basic Support Obligations:
The schedule of basic child support obligations used by the 2011 Guidelines has been updated to include the most current economic data including updated estimates of child-rearing expenditures, 2010 price levels, 2010 federal and state tax rates and FICA, and the2009 poverty level determination. All of these changes have resulted in adjustments to the basic child support obligation and have created significant changes on low and high end of the guideline income range.
Low Income Parents and Self-Sufficiency Reserve Cases:
The updated 2009 federal poverty level results in an increase to the self-sufficiency reserve. Under the 2011 Guidelines, the self-sufficiency reserve increased from $816 per month to $902.50 per month. Also, if an obligor parent has an adjusted gross income of $999 or less (previously $950 or less), that parent, absent deviation, is only going to be required to pay minimum support of $50 per month.
In addition, the 2011 Guidelines provides that self-sufficiency reserve cases should not, absent deviation, include childcare and health insurance premiums in the calculation of the basic support obligation. Payment of childcare, health insurance premiums and extraordinary expenses, may however be the basis for a deviation. It is important to note that the 2011 Guidelines specify that low income parents and self-sufficiency reserve cases are not excluded from the guideline language which allows the trial court to apportion responsibility for uninsured medical and dental payments in excess of $250 between the parties.
Sample Comparisons between 2006 and 2011 Basic Child Support Obligations:
Below is a chart that reflects the impact that the changes to the basic support obligation have on the ultimate amount of support to be paid. As is evidenced by the percentage of change from the 2006 to the 2011 Guidelines, obligor parents on the lower end of the income scale are paying far less under the new guidelines than they were under the old and obligor parents on the higher end are paying more. (See chart below.)
|| One Child
| Two Children
| Three Children
Table borrowed with permission from UNC School of Government Family Law Bulletin, 2011 Revisions to the North Carolina Child Support Guidelines, Sheryl Daniels Howell
Source: 2011 North Carolina Child Support Guidelines: Schedule of Basic Child Support Obligations
Pre-Existing Support Obligations and Responsibility for Other Children:
There are also changes to the section of the guidelines entitled “Pre-Existing Support Obligations and Responsibility for Other Children.” In situations where a parent is paying child support for the support of two families, it is often difficult to balance all the interests involved to arrive at an equitable result. Recognizing this difficulty, the 2011 Guidelines stress that deviation may be the only way in which to determine the appropriate amount of support in a case. The 2011 Guidelines bolds the following language in this section: “The fact that a parent pays child support for two or more families under two or more child support orders, separation agreements, or voluntary support arrangements may be considered as a factor warranting deviation.” (2011 Child Support Guidelines.) In addition to stressing the idea of deviation in these cases, the 2011 Guidelines include additional clarifications and changes.
It has long been allowable for parties to deduct the amount of child support they are paying pursuant to a preexisting order or agreement from their income. In addressing this deduction from income, the 2011 Guidelines specifically exclude from the deduction the payment of arrears. With this clarification, a paying parent can no longer benefit from a higher deduction from their income as a result of a failure to pay child support in another action.
Secondly, the 2011 Guidelines address and make changes in the method used to determine a party’s financial responsibility for children who live with them, for whom they owe a duty of support, and who are not involved in the case at issue. When dealing with these matters, the 2006 Guidelines provided two methods for determining the amount of the obligation of the paying parent and the resulting deduction. The first was that that parent’s financial responsibility was “equal to the basic child support obligation for these children based on the parent’s income if the other parent of these children does not live with the parent and the children.” (2006 Child Support Guidelines.) The second alternative was that the financial responsibility was “equal to one-half of the basic child support obligation for these children based on the combined incomes of both of the parties of these children if the other parent of these children lives with the parent and children.” (2006 Child Support Guidelines.)
The 2011 Guidelines removes this second method of determination in its entirety. Under the 2011 Guidelines, when a parent who is obligated to pay support has another child living with them or for which they owe a duty of support (by order or agreement) the sole method for determining the deduction for their pre-existing responsibility is to be based on the obligated parent’s income alone. The income of the other person responsible for that child (if any), such as a new spouse or other parent, will not be considered absent deviation from the guidelines.
The changes from the 2006 Guidelines to the 2011 Guidelines are numerous and not all of the changes are obvious at first glance. The application of the new guidelines with the changes to the Guidelines as written and with the changes to the underlying data will often yield a very drastic result than what would be found under the 2006 Guidelines.
In addition to the changes discussed in this article, there are several other differences between the 2006 and the 2011 Guidelines. I encourage each of you to read Cheryl Howell’s excellent detailed analysis of all of these changes. Her Family Law Bulletin on this subject published by the UNC School of Government can be found at www.sog.unc.edu/pubs/electronicversions/pdfs/flb24.pdf. Additional information concerning the underlying figures used to determine the basic support obligation and the analysis used to create the 2011 Guidelines can be found in the document entitled “North Carolina Child Support Guidelines Review Preliminary, Updated Schedules” submitted by Jane Venohr, Ph.D. of the Center for Policy Research (Denver, CO) to the North Carolina Administrative Offices of the Courts Legal and Legislative Services, dated June 2, 2010. A copy is available from the North Carolina Administrative Office of the Courts.
Elise Morgan Whitley is a Board Certified Specialist in Family Law and a member of Tash & Kurtz, PLLC in Winston-Salem. She can be reached at email@example.com.
Views and opinions expressed in articles published herein are the authors' only and are not to be attributed to this newsletter, the section, or the NCBA unless expressly stated. Authors are responsible for the accuracy of all citations and quotations.