• Estate Planning

Child Support in Minnesota

In 2006, the Minnesota state legislature approved a drastic overhaul of the state’s child support guidelines based on an “income shares” model. (See Minn. Stat. 518A) The new child support guidelines were to be used for all new cases filed after January 1st, 2007, limited modifications in 2007, and for all cases after January 1st, 2008.

Whereas the old system used a fixed percentage of the obligor’s net income based on the number of kids (25% for 1, 30% for 2), the new law is a bit more complex and considers several different factors. The new law also looks at three distinct categories of child support; basic support, medical support, and childcare support.

PICS and Percentages

The basic premise behind the new law is that the income from both parents’ should be considered. By combining the gross monthly income of the parents, you get the parties’ PICS (combined parental income for determining child support), you also figure out what percentage of the combined income each parent has.

Basic Support

In the child support statute (518A.35, subd. 2) there is a child support guidelines chart. The legislators have somehow figured out that parents with a combined monthly income of $X, who have X number of children, spend (or should spend) $X amount a month on support for the children.

For example, lets say Alice and Bob have two kids and a combined monthly income of $4,600. The magic child support guideline number is $1,200.

So now we look at the percentage of income each parent has. If Bob and Alice each earn $2,300 a month, then they each have 50% of the income. If Bob earns $3,450 and Alice earns $1,150, then Bob has 75% of the income and Alice has 25%.

The basic child support number is $600 per month (50% of $1,200) if both parties earn $2,300 (no matter who has primary custody). If Bob earns $3,450 and Alice earns $1,150, the basic child support number is $900 per month (75% of $,1200) if Alice has primary custody and Bob pays child support or $300 per month (25% of $1,200) if Bob has primary custody and Alice pays child support.

But that is not the end of the calculation. The new law looks at the amount of time the parents spend with the children. If the parent paying child support spends 10-45% of the time with the children, there is a 12% reduction from the basic child support number. If the parent spends 45.1-50% of the time with the children, parenting time is presumed equal and there is a slightly different calculation for child support (518A.36, subd. 3).

Medical Support

Medical support is separate from basic support and includes both the cost of medical and dental insurance for the children as well as unreimbursed or out of pocket expenses. These costs will be shared according to the parties’ percentage of the income (i.e. Bob pays 75% and Alice pays 25%). If the party without the children covers the insurance, then the basic support obligation will be used to offset the custodial parent’s share of the insurance.

To figure out medical support, you will need to know what the health insurance costs are. But this is not as simple as looking at a paystub to see what is taken out. You need to know how much it costs just to cover the children. Some plans are $X for employee and $Y for employee + family, some are $X for employee, $Z for employee + spouse and family, $Y for employee + family, and others are $X for employee, $Z for employee + 1, $Y for employee +2, and so on. Get the benefits information from the employee and find out all of these costs. Then take the cost to cover the kids and subtract the costs to cover the employee ($Y – $X), this is the cost of health insurance for the children and this is the cost you will need to calculate medical support.

Childcare Support

Childcare support is for work or school related childcare expenses. Childcare expenses are also paid according to the parties’ percentage of income. But because there is a tax benefit to the parent claiming these expenses, the tax benefit is considered first, and then the cost is apportioned between the parties.

Determining Income

A tricky part to this is figuring out income. You need to know each parties’ gross (before taxes) monthly income. The new law also expects that (nearly) all parents can work full-time and allows the imputation of potential income for parents who are not working full-time. There are also different “discounts” for a parent’s income based on supporting other children or paying spousal maintenance.

Gross Income

Under the statute, gross income is defined by section 518A.29(a) as: “any form of periodic payment to an individual, including, but not limited to, salaries, wages, commissions, self-employment income under section 518A.30, workers’ compensation, unemployment benefits, annuity payments, military and naval retirement, pension and disability payments, spousal maintenance received under a previous order or the current proceeding, Social Security or veterans benefits provided for a joint child under section 518A.31, and potential income under section 518A.32.”

Potential Income (also known as imputed income)

The law now clearly states in section 518A.32 that: “If a parent is voluntarily unemployed, underemployed, or employed on a less than full-time basis, or there is no direct evidence of any income, child support must be calculated based on a determination of potential income. For purposes of this determination, it is rebuttably presumed that a parent can be gainfully employed on a full-time basis. As used in this section, “full time” means 40 hours of work in a week except in those industries, trades, or professions in which most employers, due to custom, practice, or agreement, use a normal work week of more or less than 40 hours in a week.”

Even if a parent does not work full-time, a full-time income will be used for purposes of calculating child support. And if a parent is underemployed (really is a highly skilled surgeon who used to make $500,000 a year, but is now working for minimum wage), child support will be calculated based on what that parent could be making. A parent will not be considered unemployed or underemployed if it is temporary and will ultimately lead to increased income (i.e. going to school), is a “bona fide career change that outweighs the adverse effect of that parent’s diminished income on the child”, or the parent is incapacitated or incarcerated. Potential income will not be used if a parent is the recipient of a temporary assistance to needy family cash grant (TANF/MFIP).

Potential income can be determined using one of three methods:

(1) the parent’s probable earnings level based on employment potential, recent work history, and occupational qualifications in light of prevailing job opportunities and earnings levels in the community;

(2) if a parent is receiving unemployment compensation or workers’ compensation, that
parent’s income may be calculated using the actual amount of the unemployment compensation or workers’ compensation benefit received; or

(3) the amount of income a parent could earn working full time at 150 percent of the current federal or state minimum wage, whichever is higher.

Spousal Maintenance

The IRS considers spousal maintenance deductible from the income of the party who pays it and included in the income of the party who receives. In calculating child support, spousal maintenance that is paid (to a former spouse or in the current action) is deducted from that party’s income. Spousal maintenance that is received is included in that party’s income. And this means spousal maintenance must be figured out before a final computation of child support can be done.

Nonjoint Children

When calculating child support, you also need to know the number of nonjoint children living with a parent and the amount of child support that is court-ordered to be paid (not received) for nonjoint children. A nonjoint child is a legal child of one of the parties, but not both of the parties. A stepchild is not considered a nonjoint child. When determining the monthly gross income available for child support, a parent receives a credit for nonjoint children living in their home (for a maximum of two nonjoint children) or for court ordered child support paid for a nonjoint child.

Using The Calculator

Although the statute does explain how to calculate child support under the new income shares model, the online Child Support Calculator provided by the Minnesota Department of Human Services is a lot easier and more user-friendly. There are jut 3 simple steps:

  1. Go to the website
  2. Enter the data, and
  3. Click “Calculate”.

The calculator has 20 different lines for information. Not every line is necessary, and not every line will be applicable in all cases. Almost all lines include a hyperlinked definition box, so if you do not understand what the calculator is looking for it is easy to figure out. While there is still room for argument on what numbers should be used to calculate child support, or what child support should be, the calculator is a quick and easy way to determine the guideline child support amount.


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