In 2005 and 2006, the Minnesota legislature passed a new child support statute, now codified at Minn. Stat. §518A.26, et al, resulting in significant changes to the methodology in calculating a non-custodial parent’s basic child support obligation , as well as each parents’ obligations pertaining to medical and dental support for minor children. Similarly, in 2006, the Legislature passed legislation codified at Minn. Stat. §518.175, subd. 3, affecting the removal of children from the state by the custodial parent. This article is not intended to be an exhaustive summary of all changes pertaining to the new child support and removal statutes, but will highlight the most significant changes which will be of interest to clients at potential clients.
The new child support statute became effective on January 1, 2007, for newly filed cases, or for existing cases in which a modification would be warranted as long as the basis for the modification is not the change in the child support statute. For most existing cases (cases where modification is not warranted under the old law), the new statute is effective January 1, 2008. It is important to note at the outset that the effect of the new law will in many cases result in a significant modification of an obligor’s support obligation but, conversely, there will be many instances were the new law will not change the support obligation and may even increase the obligation. Therefore, it is important that you consult with legal counsel to recalculate the support obligation under the new law before actually filing a motion.
Generally speaking, under the old law, child support was calculated as a percentage of the obligor’s net income depending upon the number of children for whom support was paid. Support calculations under the new law include the gross income of both parents, the sum of which is referred to as “Parental Income for Child Support” (PICS). The calculation then divides the non custodial parent’s income by the combined PICS to arrive at the non custodial parents “Percentage Share of Combined PICS”. The non custodial parent’s percentage share of combined PICS is multiplied against the “Combined Basic Support Obligation” (the combined PICS for each parent applied against the guidelines chart which is included in the new statute, factoring in the number of joint children), which results in the non custodial parent’s basic support obligation.
By using the gross income of both parents, the new statute eliminates the deductibility of income, social security and Medicare taxes, retirement contributions, and the like. For self employed individuals, the statute does allow certain deductions to arrive at “adjusted gross income”, such as a cost of goods sold and other strictly business related expenses.
Another important feature of the new law is that both parents (including the custodial parent) are rebuttably presumed to gainfully employed on a full time basis and, if the custodial parent is not employed on a full time basis, support must be calculated based on a determination of potential income. This has always been the case for the non custodial parent who has the obligation to support the child, but the old law did not factor in the custodial parent’s income or employability. The presumption that a custodial parent can be employed on a full time basis can in some cases be “rebutted” with the result that potential income will not be “imputed” to the custodial parent. However, it appears that the policy behind the new statute mandates the inclusion of potential income for a custodial parent, with rare exceptions.
The foregoing illustrates the calculation of a non custodial parent’s basic support obligation, but there are other features of the new statute which, when figured into the calculation, will change the amount of the basic support obligation. For example, non joint children who primarily reside in the parent’s home and for whom that parent is not obligated to pay basic child support is factored into the calculation as a “deduction” equal to 50% of the guideline amount of support for that child. The new law caps the number of non joint children that can be considered for each parent to two.
The last significant change with respect to the new child support law involves the parenting expense adjustment which basically adjusts the non custodial parent’s basic support obligation according to the amount of parenting time that parent has with the children. If the non custodial parent’s parenting time with the children is less than 10% (typically, but not exclusively, calculated as a percentage of overnights during the year), there is no adjustment. If the percentage of parenting time is between 10% and 45%, there is a 12% adjustment, and parenting time between 45.1% and 50% results in a presumption of equal parenting time and a corresponding adjustment. In such cases, a basic support obligation and a 50% adjustment is calculated for both parents, the support obligation is offset, and the party with the greater obligation pays support to the other party in an amount equal to the difference between that party’s obligation and the other party’s obligation.
The calculation of either parent’s share of child care expenses (daycare) under the new law is very similar to the calculations under the old law, as the old law contained a formula which in effect resulted in a PICS number after considering both parties’ income after the transfer of child support to the custodial parent. On the other hand, the determination of either party’s share of medical and dental insurance expenses under the new law is significantly different than the calculation under the old law, as both parties are obligated to contribute to those expenses according to their percentage share of combined PICS. For example, if the non custodial parent incurs medical and dental insurance expenses for one child in the amount of $300.00, and the custodial parent’s percentage share of combined PICS is 30%, the custodial parent will “owe” $90.00 resulting in a reduction of the non custodial parent’s basic support obligation is the amount of $90.00. With respect to unreimbursed medical and dental expenses, each parent’s share of those expenses correlates precisely to their percentage share of combined PICS. Typically, the parent who has not incurred the unreimbursed medical or dental expense is obligated to reimburse the other parent for a percentage of that expense. Importantly, under the new law, there is a retroactive two year statute of limitation for one party to collect the other party’s share of unreimbursed medical and dental expenses. In other words, even for those cases decided before the effective date of the new law, the court will now only go back two years when considering any motion for an order or judgment for unpaid medical and dental expenses.
The changes in the removal statute, effective August 1, 2006, substantially leveled the playing field with respect to the custodial parent’s right to move the children out of state. Briefly, under the old statute, it was presumed that a custodial parent could move out of state with the children, and the burden was on the non custodial parent to show that the move was not in the children’s best interest. The new statute places the burden of proof on the custodial parent who is requesting the move to show that the move is in the children’s best interest, and allows the court to consider several factors in determining the children’s best interest relative to the prospective move. However, if the parent requesting permission to move has been a victim of domestic abuse by the other parent, the burden of proof would be on the parent opposing the move. There are many in the legal community who believe that most courts will continue to side with the custodial parent requesting the move, but the new statute forces much stricter scrutiny of a prospective move and gives the non custodial parent a better chance of preventing a move.
The new child support statute is widely considered to be a more fair way of balancing each parent’s respective share of financial obligations for their children, but as I indicated earlier, it will not automatically result in a substantial change to a non custodial parent’s collective support obligation. It is recommended that those paying support under an existing order seek legal counsel to determine whether the new law will have a dramatic effect on their support obligation. For those experienced in implementing the new law and drafting worksheets under the new calculations, the process can be competed very efficiently and inexpensively.
For questions related to this article please contact Nic Wenner at 612-355-2202.