370 Proposed amendments to Rules 1910.16-1--1910.16-5 relating to the supporting guidelines; recommendation 48
Title 231--RULES OF CIVIL PROCEDURE PART I. GENERAL [231 PA. CODE CH. 1910] Proposed Amendments to Rules 1910.16-1--1910.16-5 Relating to the Support Guidelines; Recommendation 48 [28 Pa.B. 1216] The Domestic Relations Procedural Rules Committee proposes the following amendments to the Rules of Civil Procedure governing the Support Guidelines. This proposal has not been submitted for review by the Supreme Court of Pennsylvania. The Committee solicits comments and suggestions from all interested persons prior to submission of these proposed amendments to the Supreme Court. Written comments relating to the proposed amendments must be received no later than Friday, May 8, 1998 and must be directed to: Sophia P. Paul, Esquire, Counsel, Domestic Relations, Procedural Rules Committee, 429 Forbes Avenue, Suite 300, Pittsburgh, Pennsylvania 15219, fax (412) 565-2336, e-mail spaul.supreme. court.state.pa.us.
The notes and explanatory comments following each Rule have been inserted to distinguish between the major changes that are being proposed by the Committee and the many technical changes that are also being proposed as part of an overall reorganization of the Rules relating to the support guidelines. A Committee Report has been included to highlight and explain the major changes that are being proposed. The explanatory comments and notes and the Committee Report do not constitute part of the rules. Nor will they be officially adopted or promulgated by the Court.
Introductory Comment
For the convenience and benefit of the practitioner, the Committee has reorganized all of the provisions in these Rules so that they more logically follow the sequence for calculating the overall support obligation. For example, since calculation begins with the computation of the parties' net incomes, Rule 1910.16-2 has been created to consolidate into one rule all of the income provisions that are currently scattered throughout Rule 1910.16-5. Rule 1910.16-2 is then followed by Rule 1910.16-3, the basic child support schedule; Rule 1910.16-4, the formula used in conjunction with the schedule to arrive at obligor's basic support obligation; Rule 1910.16-5, which sets forth the factors that the court must consider to determine if there should be a deviation from the basic support obligation; and Rule 1910.16-6, which consolidates into one rule all of the existing provisions for additional expenses that are typically added to the basic support obligation.
Although this reorganization constitutes a technical change only, publication of these proposed amendments requires that these changes be boldfaced in the same manner as the more substantive changes. Explanatory comments following each Rule have been inserted, therefore, to distinguish between the major changes that are being proposed by the Committee and the technical changes that have been made as part of the overall reorganization. A Committee Report follows these proposed amendments to highlight and explain the more substantive changes that are being proposed.
Annex A TITLE 231. RULES OF CIVIL PROCEDURE PART I. GENERAL CHAPTER 1910. ACTIONS FOR SUPPORT Rule 1910.16-1. Amount of Support. Support Guidelines.
(a) Applicability of the Support Guidelines. The support guidelines set forth the amount of support which a spouse or parent should pay on the basis of both parties' net monthly incomes as defined in Rule 1910.16-2 and the number of persons being supported. The support of a spouse or child is a priority obligation, so that a party is expected to meet this obligation by adjusting his or her other expenditures.
[(a)] (b) The amount of support (child support, spousal support or alimony pendente lite) to be awarded pursuant to the procedures under Rules 1910.11 and 1910.12 shall be determined in accordance with the support guidelines which consist of the guidelines expressed as [grids set forth in Rule 1910.16-2 and as a formula in Rule 1910.16-3] the child support schedule set forth in Rule 1910.16-3 and the formula set forth in Rule 1910.16-4 and the operation of the guidelines as set forth in [Rule 1910.16-5] these rules.
[Official Note: Orders for spousal support and alimony pendente lite shall not be in effect simultaneously.]
(c) Orders for spousal support and alimony pendente lite shall not be in effect simultaneously.
[(b)] (d) If it has been determined that there is an obligation to pay support, there shall be a rebuttable presumption that the amount of the award determined from the guidelines is the correct amount of support to be awarded. The support guidelines are a rebuttable presumption and must be applied taking into consideration the special needs and obligations of the parties. The trier of fact must consider the factors set forth in Rule 1910.16-5. The presumption shall be rebutted if the trier of fact makes a written finding, or a specific finding on the record, that an award in the amount determined from the guidelines would be unjust or inappropriate.
[(c)] (e) The guidelines shall be reviewed at least once every four years to insure that their application results in the determination of appropriate amounts of support.
Explanatory Comment to Rule 1910.16-1--1998 As part of the overall reorganization of the Rules relating to the support guidelines, the Committee proposes to amend this Rule only to incorporate the language which currently appears in Rule 1910.16-5(a) relating to the general applicability of the support guidelines. No substantive changes are intended by this change. The note which previously appeared in subdivision (a) has been made part of the actual rule to clarify that the prohibition on concurrent spousal support and alimony pendente lite orders is binding.
Rule 1910.16-2. Support Guidelines [Grids] Calculation of Net Income.
The amount of support to be awarded is based in large part upon the parties' monthly net income.
(a) Monthly Gross Income. Monthly gross income is ordinarily based upon at least a six-month average of all of a party's income. The term ''income'' is defined by the support law, 23 Pa.C.S. § 4302, and includes income from any source. The statute lists many types of income including, but not limited to:
(1) wages, salaries, bonuses, fees and commissions;
(2) net income from business or dealings in property;
(3) interest, rents, royalties, and dividends;
(4) pensions and all forms of retirement;
(5) income from an interest in an estate or trust;
(6) social security benefits, temporary and permanent disability benefits, workers' compensation and unemployment compensation;
(7) alimony if, in the discretion of the trier of fact, inclusion of part or all of it is appropriate; and
Official Note: Since the reasons for ordering payment of alimony vary, the appropriateness of including it in the recipient's gross income must also vary. For example, if obligor is paying $1,000 per month in rehabilitative alimony for the express purpose of financing obligee's college education and related child care expenses, it would be inappropriate to consider that alimony as income from which the obligee could provide child support. However, if alimony is intended to finance obligee's general living expenses, inclusion of the alimony as income is appropriate.
(8) other entitlements to money or lump sum awards, without regard to source, including lottery winnings, income tax refunds, insurance compensation or settlements; awards and verdicts; and any form of payment due to and collectible by an individual regardless of source.
(b) Treatment of AFDC and SSI Benefits. Neither public assistance nor Supplemental Security Income (SSI) benefits shall be counted as income for purposes of determining support.
Official Note: Care must be taken to distinguish Social Security from Supplemental Security Income (SSI) benefits. Social Security benefits are income pursuant to subdivision (a) of this Rule.
(c) Monthly Net Income.
(1) Unless otherwise provided in this Rule, the court shall subtract only the following items from monthly gross income to arrive at net income:
(A) federal, state, and local income taxes;
(B) F.I.C.A. payments and non-voluntary retirement payments;
(C) union dues; and
(D) alimony paid to the other party.
(2) The court shall subtract from gross monthly income any child support paid pursuant to a pre-existing order for the benefit of prior children. For purposes of this subsection, prior children are those born before the children who are the subject of the support action or, in computing a spousal support or alimony pendente lite obligation, children born before the marriage.
Official Note: Where there is no pre-existing order for prior children, but a party presents verification of an established pattern of direct payments for the benefit of these children, the court may consider those payments as a reduction from gross income if the party agrees to formalize the arrangement for the prior children through the entry of a new court order.
(3) In computing a spousal support or alimony pendente lite obligation, the court shall subtract from monthly gross income the amount of alimony or alimony pendente lite paid to a former spouse who is not the subject of the support action.
(4) In computing a child support obligation, the court may subtract from monthly gross income the amount of alimony, spousal support or alimony pendente lite paid to a spouse or former spouse who is not the subject of the support action.
(d) Reduced or Fluctuating Income.
(1) Voluntary Reduction of Income. Where a party voluntarily assumes a lower paying job, there generally will be no recomputation of the support payment. A party will ordinarily not be relieved of a support obligation by voluntarily quitting work or by being fired for misconduct.
(2) Involuntary Reduction of Income. No adjustments in support payments will be made for normal fluctuations in earnings. However, appropriate adjustments will be made for substantial continuing involuntary decreases in income.
(3) Seasonal Employees. Support orders for seasonal employees, such as construction workers, shall ordinarily be based upon a yearly average.
(4) Income Potential. Ordinarily, a party who wilfully fails to obtain appropriate employment will be considered to have an income equal to the party's earning capacity. Age, education, training, health, work experience, earnings history and child care responsibilities are factors which shall be considered in determining earning capacity.
(e) Net Income Affecting Application of the Child Support Guidelines.
(1) Low Income Cases.
(A) When the obligor's monthly net income and corresponding number of children fall into the shaded area of the Schedule set forth in Rule 1910.16-3, the basic child support obligation shall be calculated using the obligor's income only. For example, where obligor has monthly net income of $700, his or her basic monthly support obligation for three children is $184. This amount is determined directly from the schedule in Rule 1910.16-3.
(B) In computing a basic spousal support or alimony pendente lite obligation pursuant to the formula in Rule 1910.16-4, the presumptively correct amount of support shall not reduce the obligor's net income below $500 per month. For example, if obligor earns $600 per month and obligee earns $300 per month, the presumptively correct amount of spousal support is calculated as follows. Using the formula, multiply the net difference between the parties' incomes ($300) by .40 to arrive at $120 per month. Since this amount leaves the obligor with only $480 per month, it must be adjusted (reduced by $20) so that obligor retains $500 per month. The presumptive minimum amount of spousal support, therefore, is $100 per month.
(C) When the obligor's monthly net income is $500 or less, the court may award support, but only after consideration of the obligor's actual living expenses.
(2) High Income Child Support Cases.
When the parties' combined net income exceeds $15,000 per month, child support shall be calculated pursuant to Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984). The presumptive minimum amount of child support shall be obligor's percentage share of the highest amount of support which can be derived from the schedule for the appropriate number of children and using the parties' actual combined income to determine obligor's percentage share of this amount. The court may award an additional amount of child support based on the remaining combined income and the factors set forth in Melzer.
For example, where obligor and obligee have monthly net incomes of $17,000 and $4,000 respectively, the presumptive minimum amount of child support for three children is calculated as follows: using the formula in Rule 1910.16-4, determine the parties' percentage shares of income based on their actual combined income--81% and 19% respectively of $21,000. Using the schedule in Rule 1910.16-3, find the highest possible combined child support obligation for three children--$3,480. Obligor's percentage share of the combined obligation is 81% of $3,480, or $2,818. This is the presumptive minimum amount of child support that he or she must pay for three children. Since this amount is derived from the schedule in Rule 1910.16-3, which is limited to combined household income of $15,000, the court may award an additional amount of support based on the parties' remaining income of $6,000 and the factors set forth in Melzer.
Explanatory Comment to Rule 1910.16-2--1998 As part of the overall reorganization of the support guidelines, the Committee proposes to rescind current Rule 1910.16-2 as it relates to the Grids and substitute it with new Rule 1910.16-2 Calculation of Net Income. For the most part, this Rule simply consolidates all of the income provisions that are currently scattered throughout Rule 1910.16-5. See the Committee Report. Given the many other issues that had to be addressed in the four-year guideline review, the Committee plans to conduct a more comprehensive and substantive review of these income provisions at a later time.
1. Monthly Gross Income. New subdivision (a) incorporates existing Rule 1910.16-5(b) specifying what is gross income for purposes of calculating support. Only two substantive changes have been made to this existing provision, both of which were necessary so that the rule conforms to the recently expanded definition of ''income'' in 23 Pa.C.S. § 4302. The two changes are: 1) the addition of bonuses to the items of gross income that must be considered in establishing a support obligation; and 2) the inclusion of lottery winnings, income tax refunds, insurance compensation or settlements, awards or verdicts and any form of payment due and collectible regardless of source. The two changes appear in subsections (1) and (8) respectively and merely track the statutory language in this regard.
2. Treatment of AFDC and SSI Benefits. New subdivision (b) incorporates verbatim existing Rule 1910.16-5(p). No changes have been made here.
3. Monthly Net Income. (See the Committee Report). New subdivision (c) substantially incorporates existing Rule 1910.16-5(b) specifying the deductions that may be taken from gross income to arrive at net income. Several substantive changes have been made with respect to deductions. First, the deduction of health insurance premiums has been eliminated in accordance with the Committee's proposal that the cost of the premium be treated as an additional expense subject to allocation between the parties under Rule 1910.16-6.
Second, subsections (2) through (4) reflect the Committee's proposal to change the current multiple family calculation under Rule 1910.16-5(n) and (o) to an approach which gives priority to first born children and prior spouses. Subsection (2) requires a mandatory deduction from gross income of any child support paid pursuant to a pre-existing court order. This applies to both child and spousal support cases. When calculating a spousal support or APL obligation only, subsection (3) requires a further deduction from gross income of alimony or APL being paid to a former spouse who is not the subject of the support action. When calculating a child support obligation, however, subsection (4) provides that the court ''may'' deduct alimony, spousal support or APL payments being made to a former spouse. When construed together, these two provisions reflect the priority that a prior spouse must receive over subsequent spouses, and the priority that a prior spouse should, but may not always, receive over later born children.
4. Reduced or Fluctuating Income. New subdivision (d) incorporates existing Rule 1910.16-5(c). The only change here is the elimination of the provision permitting courts to exercise their discretion in determining whether bonuses should be included in gross income. This change is consistent with the recent amendment to the definition of ''income'' under 23 Pa.C.S. § 4302 to include bonuses as income that must be considered in establishing a support obligation.
5. Net Income Affecting Application of the Guidelines. (See the Committee Report). New subdivision (e) is a modified version of existing Rule 1910.16-5(d) with the following changes. Subsection (1)(A) reflects the incorporation of the Computed Allowance Minimum (CAM) in low-income child support cases. When the obligor's net monthly income falls into the shaded area of the schedule, the basic child support obligation can be derived directly from the schedule in Rule 1910.16-3. There is no need to use the formula in Rule 1910.16-4 to calculate obligor's support obligation because the CAM keeps the amount of the obligation the same regardless of obligee's income. Obligee's income is a relevant factor, however, in determining whether to deviate from the basic guideline obligation pursuant to Rule 1910.16-5 and in considering whether to require the obligor to contribute to any additional expenses under Rule 1910.16-6.
Since the support schedule in Rule 1910.16-3 reflects child support only, subsection (1)(B) is necessary to reflect the operation of CAM in spousal support and alimony pendente lite cases. It adjusts the basic guideline obligation that is calculated under the formula in Rule 1910.16-4 so that the obligor does not fall below $500 per month in these cases.
When the obligor has net income of only $500 per month or less, subsection (1)(C) provides that the court must consider the parties' actual living expenses before awarding support. The guidelines assume that at this income level the obligor is barely able to meet basic personal needs. In these cases, therefore, entry of a minimal order is appropriate. In some cases, it may not be appropriate to order support at all.
Subsection (2) reflects the limited application of Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984) to cases in which the guidelines cannot be used to establish the child support obligation because the parties' combined income exceeds $15,000 per month. The court must continue, however, to establish a presumptive minimum amount of child support using the guidelines to arrive at that amount. The formula for calculating the presumptive minimum amount has been modified slightly to clarify that the parties' percentage shares should be calculated using their actual combined income rather than (as the examples which are currently set forth in the guidelines suggest) theoretical combined income of only $15,000. This change eliminates many of the inequities and inconsistencies that arise in some cases from the application of the current method.
In addition, subsection (2) includes specific language directing the court to consider awarding an additional amount of support based on the parties' remaining combined income and the Melzer case. In considering the remaining income, the court must use the factors set forth in Melzer. It would be improper to apply the formula in Rule 1910.16-4 to this income and award the obligor's percentage share as additional support. Additional support, if any, may be more or less than the percentage share and must, therefore, be determined in accordance with the factors set forth in Melzer.
Rule 1910.16-3. Support Guidelines. [Formula] Basic Child Support Schedule.
[(a)] Rescinded and moved to new Rule 1910.16-4(a).
[(b) Chart of Proportional Expenditures.] Rescinded.
The following schedule sets forth the amounts spent on children in intact families by combined income and number of children. Combined income is on the vertical axis of the schedule and number of children is on the horizontal axis of the schedule. This schedule is used to find the basic child support obligation. Unless otherwise provided in these Rules, the obligor's share of the basic support obligation shall be computed using the formula set forth in Rule 1910.16-4.
Combined Net
One
Two
Three
Four
Five
Six Monthly
Child
Children
Children
Children
Children
Children Income 0-600 50 60 70 80 90 100 650 135 137 138 140 141 143 700 171 182 184 186 188 190 750 183 220 230 233 235 238 800 196 238 262 279 282 285 850 208 255 283 302 318 333 900 220 273 304 325 343 360 950 232 291 325 348 369 387 1000 244 308 346 371 394 414 1050 256 326 367 394 419 441 1100 268 391 463 511 554 593 1150 279 407 482 532 577 617 1200 291 423 501 553 600 642 1250 302 440 520 575 623 667 1300 313 456 539 596 646 691 1350 325 472 558 617 669 716 1400 336 489 578 638 692 740 1450 347 505 597 659 715 765 1500 359 521 616 681 738 789 1550 370 538 635 702 761 814 1600 381 554 654 723 784 839 1650 393 571 674 744 807 863 1700 404 587 693 766 830 888 1750 415 603 712 787 853 913 1800 427 620 731 808 876 937 1850 438 636 751 829 899 962 1900 449 652 770 851 922 987 1950 461 668 788 871 944 1010 2000 472 684 807 891 966 1034 2050 483 700 825 911 988 1057 2100 494 716 843 932 1010 1081 2150 505 732 862 952 1032 1104 2200 516 748 880 972 1054 1128 2250 528 763 898 993 1076 1151 2300 539 779 917 1013 1098 1175 2350 550 795 935 1033 1120 1198 2400 560 811 954 1054 1143 1223 2450 571 827 973 1075 1165 1247 2500 582 842 991 1095 1187 1271 2550 593 858 1010 1116 1210 1295 2600 603 874 1029 1137 1232 1319 2650 614 889 1048 1158 1255 1343 2700 625 905 1066 1178 1277 1367 2750 635 921 1085 1199 1300 1391 2800 641 929 1095 1209 1311 1403 2850 647 937 1104 1220 1322 1415 2900 653 945 1113 1230 1333 1427 2950 658 953 1122 1240 1345 1439 3000 664 961 1132 1251 1356 1451 3050 670 969 1141 1261 1367 1463 3100 676 977 1150 1271 1378 1474 3150 681 986 1160 1282 1389 1486 3200 686 993 1167 1289 1398 1496 3250 690 998 1172 1295 1404 1502 3300 693 1004 1177 1301 1410 1509 3350 697 1010 1182 1306 1416 1515 3400 700 1016 1187 1312 1422 1522 3450 704 1022 1192 1318 1428 1528 3500 708 1028 1197 1323 1434 1535 3550 711 1034 1203 1329 1440 1541 3600 715 1040 1208 1335 1447 1548 3650 724 1052 1223 1351 1465 1567 3700 733 1063 1238 1368 1483 1586 3750 742 1075 1252 1384 1500 1605 3800 750 1086 1267 1400 1518 1624 3850 759 1098 1282 1417 1536 1643 3900 768 1109 1297 1433 1553 1662 3950 777 1121 1311 1449 1571 1681 4000 786 1132 1326 1465 1588 1700 4050 794 1143 1339 1480 1604 1717 4100 801 1153 1351 1493 1619 1732 4150 808 1163 1363 1506 1633 1747 4200 815 1174 1375 1520 1647 1763 4250 822 1184 1387 1533 1662 1778 4300 829 1194 1399 1546 1676 1793 4350 836 1204 1411 1559 1690 1809 4400 843 1215 1423 1573 1705 1824 4450 850 1225 1435 1586 1719 1840 4500 857 1235 1447 1599 1734 1855 4550 864 1245 1459 1612 1748 1870 4600 872 1255 1471 1626 1762 1886 4650 879 1266 1483 1639 1777 1901 4700 886 1276 1495 1652 1790 1916 4750 892 1285 1506 1664 1804 1930 4800 899 1295 1518 1677 1818 1945 4850 906 1305 1529 1690 1832 1960 4900 913 1315 1541 1702 1845 1975 4950 920 1325 1552 1715 1859 1989 5000 927 1335 1564 1728 1873 2004 5050 934 1344 1575 1740 1887 2019 5100 941 1354 1586 1753 1900 2033 5150 948 1364 1598 1766 1914 2048 5200 954 1374 1609 1778 1928 2063 5250 961 1384 1621 1791 1941 2077 5300 968 1394 1632 1804 1955 2092 5350 975 1404 1644 1816 1969 2107 5400 982 1413 1655 1829 1983 2121 5450 989 1423 1667 1842 1996 2136 5500 996 1433 1678 1854 2010 2151 5550 1003 1443 1690 1867 2024 2166 5600 1010 1453 1701 1880 2038 2180 5650 1016 1463 1713 1893 2052 2195 5700 1023 1473 1724 1905 2065 2210 5750 1030 1483 1736 1918 2079 2225 5800 1037 1492 1747 1931 2093 2240 5850 1044 1502 1759 1944 2107 2254 5900 1051 1512 1771 1956 2121 2269 5950 1058 1522 1782 1969 2135 2284 6000 1065 1532 1794 1982 2148 2299 6050 1071 1542 1805 1995 2162 2314 6100 1078 1552 1817 2008 2176 2328 6150 1085 1561 1828 2020 2190 2343 6200 1092 1571 1840 2033 2204 2358 6250 1099 1581 1851 2046 2218 2373 6300 1106 1591 1863 2059 2232 2388 6350 1113 1601 1875 2071 2245 2403 6400 1120 1611 1887 2085 2260 2418 6450 1126 1621 1899 2099 2275 2434 6500 1133 1632 1912 2112 2290 2450 6550 1140 1642 1924 2126 2305 2466 6600 1147 1652 1937 2140 2320 2482 6650 1153 1662 1949 2154 2334 2498 6700 1160 1672 1961 2167 2349 2514 6750 1167 1682 1974 2181 2364 2530 6800 1174 1693 1986 2195 2379 2546 6850 1181 1703 1998 2208 2394 2561 6900 1187 1713 2011 2222 2409 2577 6950 1194 1723 2023 2236 2424 2593 7000 1201 1733 2036 2249 2438 2609 7050 1208 1744 2048 2263 2453 2625 7100 1215 1754 2060 2277 2468 2641 7150 1221 1764 2073 2290 2483 2657 7200 1228 1774 2085 2304 2497 2672 7250 1231 1779 2091 2311 2505 2680 7300 1235 1784 2098 2318 2513 2689 7350 1238 1790 2104 2325 2521 2697 7400 1242 1795 2111 2333 2529 2706 7450 1245 1800 2117 2340 2536 2714 7500 1249 1806 2124 2347 2544 2722 7550 1252 1811 2131 2354 2552 2731 7600 1256 1816 2137 2362 2560 2739 7650 1260 1822 2144 2369 2568 2748 7700 1263 1827 2150 2376 2576 2756 7750 1267 1832 2157 2383 2584 2764 7800 1270 1838 2163 2391 2591 2773 7850 1274 1843 2170 2398 2599 2781 7900 1277 1848 2177 2405 2607 2790 7950 1281 1854 2183 2412 2615 2798 8000 1284 1859 2190 2420 2623 2806 8050 1288 1865 2197 2428 2632 2816 8100 1296 1877 2211 2443 2648 2834 8150 1304 1888 2224 2458 2664 2851 8200 1312 1900 2238 2473 2680 2868 8250 1320 1911 2251 2487 2696 2885 8300 1328 1923 2265 2502 2712 2902 8350 1336 1934 2278 2517 2729 2920 8400 1344 1945 2291 2532 2745 2937 8450 1352 1957 2305 2547 2761 2954 8500 1360 1968 2318 2562 2777 2971 8550 1368 1980 2332 2576 2793 2988 8600 1376 1991 2345 2591 2809 3006 8650 1384 2003 2358 2606 2825 3023 8700 1392 2014 2372 2621 2841 3040 8750 1400 2026 2385 2636 2857 3057 8800 1408 2037 2399 2651 2873 3074 8850 1416 2049 2412 2665 2889 3092 8900 1424 2060 2426 2680 2905 3109 8950 1432 2072 2439 2695 2921 3126 9000 1440 2083 2452 2710 2937 3143 9050 1448 2095 2466 2725 2954 3160 9100 1456 2106 2479 2739 2970 3177 9150 1464 2117 2493 2754 2986 3195 9200 1472 2129 2506 2769 3002 3212 9250 1480 2140 2519 2784 3018 3229 9300 1488 2152 2533 2799 3034 3246 9350 1496 2163 2546 2814 3050 3263 9400 1504 2175 2560 2828 3066 3281 9450 1512 2186 2573 2843 3082 3298 9500 1520 2198 2586 2858 3098 3315 9550 1528 2209 2600 2873 3114 3332 9600 1536 2221 2613 2888 3130 3349 9650 1544 2232 2627 2903 3146 3367 9700 1552 2244 2640 2917 3162 3384 9750 1560 2255 2654 2932 3179 3401 9800 1568 2267 2667 2947 3195 3418 9850 1576 2278 2680 2962 3211 3435 9900 1584 2289 2694 2977 3227 3453 9950 1592 2301 2707 2991 3243 3470 10000 1600 2312 2721 3006 3259 3487 10050 1608 2324 2734 3021 3275 3504 10100 1616 2335 2747 3036 3291 3521 10150 1624 2347 2761 3051 3307 3539 10200 1632 2358 2774 3066 3323 3556 10250 1640 2370 2788 3080 3339 3573 10300 1648 2381 2801 3095 3355 3590 10350 1656 2393 2815 3110 3371 3607 10400 1664 2404 2828 3125 3387 3625 10450 1672 2416 2841 3140 3403 3642 10500 1680 2427 2855 3155 3420 3659 10550 1688 2439 2868 3169 3436 3676 10600 1695 2448 2879 3181 3449 3690 10650 1698 2453 2886 3188 3456 3698 10700 1702 2459 2892 3196 3464 3707 10750 1706 2464 2899 3203 3472 3715 10800 1710 2470 2905 3210 3480 3723 10850 1713 2475 2912 3217 3487 3732 10900 1717 2481 2918 3224 3495 3740 10950 1721 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[Continued from previous Web Page] Explanatory Comment to Rule 1910.16-3--1998 The Committee proposes to replace the existing grids and chart of proportional expenditures with this child support schedule. The schedule shows the amounts spent on children in intact families by combined income and number of children. It is used to find the parties' combined basic child support obligation. In turn, the obligor's share of this obligation is computed using the existing income shares formula in Rule 1910.16-4 which allocates the obligation in proportion to the parties' net incomes. (See the Committee Report).
Rule 1910.16-4. Support Guidelines. [Deviation] Calculation of Support Obligation. Formula.
(a) The following formula shall be used to calculate the obligor's share of the basic guideline child support, spousal support and/or alimony pendente lite obligation:
Child Support Obligor Obligee 1. Total Gross Income per pay period ______ ______ 2. Less Deductions ______ ______ 3. Net Income ______ ______ 4. Conversion to Monthly Amount (if pay period is other than monthly) ______ ______ 5. Combined Total Monthly Net Income ______
6. BASIC CHILD SUPPORT OBLIGATION
(Determine from Schedule in Rule 1910.16-3 based on number of children and the line 5 Combined Monthly Net Income)______
7. Total Support ______ 8. Net Income Expressed as a Percentage Share of Income (Divide line 3 (or 4) by line 7) % % 9. Each Parent's Monthly Share of the Basic Child Support Obligation (Multiply line 7 and line 8) ______ ______ Spousal Support or APL
With Dependent Children 10. Obligor's Monthly Net Income (Line 3 or 4) ______ 11. Less Obligee's Monthly Net Income (Line 3 or 4) ( ______ ) 12. Difference ______
13. Less Obligor's Total Child Support Obligation ( ______ ) 14. Difference ( ______ ) 15. Multiply by 30% x .30 16. AMOUNT OF MONTHLY SPOUSAL SUPPORT OR APL
______
Without Dependent Children 17. Obligor's Monthly Net Income (Line 3 or 4) ______
18. Less Obligee's Monthly Net Income (Line 3 or 4) ( ______ ) 19. Difference ______
20. Multiply by 40% x .40 21. AMOUNT OF MONTHLY SPOUSAL SUPPORT OR APL
______
(b) Shared Custody. When the child spends an equal amount of time with both parties, the obligor shall be the party with the higher net income.
(c) Order For More Than Six Children. When there are more than six children who are the subject of a single order, the child support obligation shall be calculated as follows. First, determine the appropriate amount of support for six children under the guidelines. Using the same income figures, subtract the support amount for five children from the amount for six children. Multiply the difference by the number of children in excess of six and add the resulting amount to the guideline amount for six children.
(d) Divided or Split Custody.
(1) When calculating a child support obligation, and one or more children reside with each party, the court shall offset the parties' respective child support obligations and award the net difference to the obligee as child support. For example, if the parties have three children, one of whom resides with Husband and two of whom reside with Wife, and their net monthly incomes are $1,500 and $800 respectively, Husband's child support obligation is calculated as follows. Using the schedule in Rule 1910.16-3 for two children and the formula, Husband's support obligation for the two children living with Wife is $508. Using the schedule in Rule 1910.16-3 for one child and the formula, Wife's support obligation for the child living with Husband is $188. Subtracting $188 from $508 produces a net support amount of $320 payable to Wife as child support.
(2) When calculating a combined child support and spousal or APL obligation, and one or more children reside with each party, the court shall offset the obligor's spousal and child support obligation with the obligee's child support obligation and award the net difference to the obligee as spousal and child support. In the example above, Husband's spousal and child support obligation to Wife and two children is $564. Wife's child support obligation for one child is $188. Subtracting $188 from $564 produces a net support amount of $376 payable to Wife as spousal and child support.
(3) The procedures set forth in this subdivision should not necessarily be followed where one party's income is minimal and the other party's income is significantly greater. For example, where the non-custodial parent's income is $2,000 and custodial parent has no income, the guideline for one child is $472. If the same numbers are used, but each parent has custody of one child, the guideline is still $472 because the parent without income is not liable for support which would reduce the $472 order. This result is inequitable, and therefore the formula set forth above should not be used in similar situations.
(e) Support Obligations When Custodial Parent Owes Spousal Support. Where children are residing with the spouse obligated to pay spousal support (custodial parent) and the other spouse (non-custodial parent) has a legal obligation to support these children, the guideline amount of spousal support shall be determined by offsetting the non-custodial parent's obligation for support of the children and the custodial parent's obligation of spousal support, and awarding the net difference to the non-custodial parent as spousal support.
The following example uses the formula to show the steps followed to determine the amount of the non-custodial parent's support obligation to the children and the effect of that obligation upon the custodial parent's spousal support obligation. The example assumes that the parties have two children and the non-custodial parent's net monthly income is $1,000 and the custodial parent's net monthly income is $2,600. First, determine the spousal support obligation of the custodial parent to the non-custodial parent based upon their net incomes from the formula for spousal support without dependent children, i.e., $640. Second, recompute the net income of the parties assuming the payment of the spousal support so that $640 is subtracted from the custodial parent's net income, now $1,960, and added to the non-custodial parent's net income, now $1,640. Third, determine the child support obligation of the non-custodial parent based upon the recomputed net incomes in Step 2 from the schedule and formula for two children, i.e., $468. Fourth, determine the recomputed support obligation of the custodial parent to the non-custodial parent by subtracting the non-custodial parent's child support obligation from Step 3 ($468) from the original support obligation determined in Step 1 ($640). The recomputed spousal support is $172.
(f) Allocation. Consequences. An order awarding both spousal and child support may be unallocated or state the amount of support allocable to the spouse and the amount allocable to each child. However, the formula provided by these rules assume that an order will be unallocated. Therefore, if the order is to be allocated, the formula set forth in this Rule shall be utilized to determine the amount of support allocable to the spouse. If allocation of an order utilizing the formula would be inequitable, the court shall make an appropriate allocation. Also, if an order is to be allocated, an adjustment shall be made to the award giving consideration to the federal income tax consequences of an allocated order as may be appropriate under the circumstances.
When the parties are in higher income brackets, the income tax considerations are likely to be a more significant factor in determining an award of support. A support award for a spouse and children is taxable to the obligee while an award for the children only is not. Consequently, in certain situations an award only for the children will be more favorable to the obligee than an award to the spouse and children. In this situation, the trier of fact should utilize the guidelines which result in the greatest benefit to the obligee.
When the obligee's net income is equal to or greater than the obligor's net income, the guideline amount for spouse and children is identical to the guideline amount for children only. Therefore, in cases involving support for spouse and children, whenever the obligee's net income is equal to or greater than the obligor's net income, the guideline amount indicated shall be attributed to child support only.
Explanatory Comment to Rule 1910.16-4--1998 As part of the overall reorganization of the support guidelines, the Committee proposes to rescind the Chart of Proportional Expenditures, which is currently used in conjunction with the income shares formula to establish the support obligation, and substitute it with the new schedule in Rule 1910.16-3. The formula itself is modified only to conform to the new schedule. Rule 1910.16-4 also consolidates the following provisions relating to use of the formula in special situations which currently appear throughout existing Rule 1910.16-5.
1. Shared Custody. (See the Committee Report). Subdivision (b) reflects the Committee's recommendation for establishing the basic support obligation in a 50-50 shared custody situation. When the child spends half of the time living with one parent and the other half living with the other parent, then for purposes of establishing the basic support obligation, the obligor is the party with the higher net income. If the parties' incomes are identical and custody time is equal, there should be no basic guideline amount awarded except in unusual circumstances. In these cases, however, either party may still seek contribution from the other party for any of the additional expenses that he or she incurs on behalf of the children (e.g., health insurance premiums, private school tuition and/or any other additional expenses which are not reflected in the amounts shown in the schedule).
2. Order for More than Six Children. Subdivision (c) incorporates existing Rule 1910.16-5(e). It has been changed only to reflect the expanded application of the guidelines from four to six children and the new schedule. No substantive changes are intended here.
3. Divided or Split Custody. New subdivision (d) incorporates existing Rule 1910.16-5(h). It has been rewritten only to update the examples so that they reflect the new levels of child support and the new schedule. No substantive changes are intended here.
4. Support Obligations When Custodial Parent Owes Spousal Support. New subdivision (e) incorporates existing Rule 1910.16-5(j). It has been rewritten only to update the examples so that they reflect the new levels of child support and the new schedule. No substantive changes are intended here.
5. Allocation. Consequences. New subdivision (f) incorporates verbatim existing Rule 1910.16-5(f). No changes were made here.
Rule 1910.16-5. Support Guidelines. [Operation] Deviation.
(a) If the amount of support deviates from the amount of support determined by the guidelines, the trier of fact shall specify, in writing, the guideline amount of support, and the reasons for, and findings of fact justifying, the amount of the deviation.
Official Note: The deviation applies to the amount of the support obligation and not to the amount of income.
(b) In deciding whether to deviate from the amount of support determined by the guidelines, the trier of fact shall consider:
(1) unusual needs and unusual fixed obligations;
(2) other support obligations of the parties;
(3) other income in the household;
(4) ages of the children;
(5) assets of the parties;
(6) medical expenses not covered by insurance;
(7) standard of living of the parties and their children;
(8) in a spousal support or alimony pendente lite case, the length of the marriage; and
(9) other relevant and appropriate factors, including the best interests of the child or children.
(c) [Reduced or Fluctuating Income.] Moved to Rule 1910.16-2(e). No deviation from the support obligation shall be made for the amount of time that each parent spends with the child or children.
[(d) Net Income Affecting Application of the Guidelines.] Moved to Rule 1910.16-2(f).
[(e) Orders for More Than Four Children.] Moved to Rule 1910.16-4(b).
[(f) Allocation; Consequences.] Moved to Rule 1910.16-4(e).
[(g) Mortgage Payment.] Moved to Rule 1910.16-6(e).
[(h) Divided or Split Custody of Minor Children.] Moved to Rule 1910.16-4(c).
[(i) Child Care Expenses.] Moved to Rule 1910.16-6(a).
[(j) Support Obligations When Custodial Parent Owes Spousal Support.] Moved to Rule 1910.16- 4(d).
[(k) Determination of Post-Secondary Educational Expenses.] Rescinded. See Curtis v. Kline, 542 Pa. 249, 666 A.2d 265 (1995).
[(l) Private School Tuition. Summer Camp. Other Needs.] Moved to Rule 1910.16-6(d).
[(m) Direct Contributions of Noncustodial Parent.] Moved to Rule 1910.16-5(c).
[(n) Awards of Child Support When There are Multiple Families.] Rescinded. See 1910.16- 2(c)(1)(D) and (2).
[(o) Awards of Spousal Support When There are Multiple Families.] Rescinded. See Rule 1910.16-2(c)(1)(D) and (2).
[(p) Unreimbursed Medical Expenses.] Moved to Rule 1910.16-6(c).
[(q) Treatment of AFDC and SSI Benefits.] Moved to Rule 1910.16-2(b).
Explanatory Comment to Rule 1910.16-5--1998 As part of the overall reorganization of the rules relating to the support guidelines, new Rule 1910.16-5 incorporates existing Rule 1910.16-4 setting forth the factors for deviation. The Committee proposes that two substantive changes be made to this provision. Subdivision (b)(8) is added to permit the court to consider the length of the marriage in a spousal support or alimony pendente lite case. Subdivision (c) is added to expressly prohibit deviation based on the amount of time that each parent spends with the child or children. The Committee's rationale for recommending these changes is set forth in detail in the Report. (See the Committee Report).
Rule 1910.16-6. Support Guidelines. Adjustments to the Basic Support Obligation.
(a) Child care expenses. Reasonable child care expenses paid by the custodial parent, if necessary to maintain employment or appropriate education in pursuit of income, are the responsibility of both parents. These expenses shall be allocated between the parties in proportion to their net incomes and obligor's share added to his or her basic support obligation.
(1) Except as provided in subsection (2), the total child care expenses shall be reduced by 25% to reflect the federal child care tax credit available to the custodial parent, whether or not the credit is actually claimed by that parent, up to a maximum annual cost of $2,400 per year for one child and $4,800 per year for two or more children. For example, where the custodial parent incurs $7,000 per year of reasonable child care expenses for two children, the net child care expenses subject to allocation between the parties is calculated as follows. Multiply the first $4,800 of these expenses by .75-$3,600. Add the remaining child care expenses of $2,200 to this amount for a total of $5,800. Divide this amount by 12 months for a total of $483 per month of net child care expenses that are subject to allocation between the parties in proportion to their net incomes.
(2) The federal child care tax credit shall not be used to reduce the child care expenses subject to allocation between the parties if the custodial parent's gross income (before considering any support) falls below $1,200 per month for one child, $1,600 per month for two children, $1,800 per month for three children, $2,000 per month for four children, $2,300 per month for five children and $2,500 per month for six children.
(b) Health Insurance Premiums.
(1) A party's payment of a premium to provide health insurance coverage on behalf of the other party or the children shall be allocated between the parties in proportion to their net incomes, including the portion of the premium attributable to the party who is paying it. If the obligor is paying the premium, then obligee's share is deducted from the obligor's basic support obligation. If the obligee is paying the premium, then obligor's share is added to his or her basic support obligation. Employer-paid premiums are not subject to allocation.
(2) When the health insurance covers other persons or children who are not the subject of the support action, the portion of the premium attributable to them must be excluded from allocation. In the event this portion is not known or cannot be verified, it shall be calculated as follows. First, determine the cost per person by dividing the total cost of the premium by the number of persons covered under the policy. Second, multiply the cost per person by the number of persons who are not the subject of the support action. The resulting amount is excluded from allocation.
For example, if Husband pays $200 per month for a health insurance policy which covers himself, Wife, the parties' child, and two additional children from a previous marriage, the portion of the premium attributable to the additional two children, if not otherwise verifiable or known with reasonable ease and certainty, is calculated by dividing $200 by five persons and then multiplying the resulting amount of $40 per person by the two additional children, for a total $80 to be excluded from allocation. Subtract this amount from the total cost of the premium to arrive at the portion of the premium to be allocated between the parties--$120. Since Husband is paying the premium, Wife's percentage share of $120 is deducted from Husband's support obligation. If Wife had been providing the coverage, then Husband's percentage share would be added to his basic support obligation.
Official Note: Pursuant to 23 Pa.C.S. § 4326, the non-custodial parent bears the initial responsibility of providing health care coverage for the children if it is available at a reasonable cost on an employment-related or other group basis.
(c) Unreimbursed Medical Expenses. Unreimbursed medical expenses of the obligee or the children shall be allocated between the parties in proportion to their respective net incomes and obligor's share added to his or her basic support obligation.
(1) For purposes of this subdivision, medical expenses are annual unreimbursed medical expenses in excess of $250 per person which are recurring and can be reasonably predicted by the court at the time of establishment or modification of the support order. Medical expenses include insurance co-payments and deductibles and all expenses incurred for reasonably necessary medical services and supplies, including but not limited to surgical, dental and optical services, and orthodontia. Medical expenses do not include cosmetic, chiropractic, psychiatric or psychological services unless specifically directed in the order of court.
(2) If there are annual medical expenses in excess of $250 per person which are unpredictable or non-recurring, the court may order that such expenses, if incurred, be allocated in proportion to the parties' net incomes. The court may direct obligor to pay his or her share either to the obligee or directly to the health care provider.
(3) An annual limitation may be imposed when the burden on the obligor would otherwise be excessive.
Official Note: If the trier of fact determines that the obligee acted reasonably in obtaining services which were not specifically set forth in the order of support, payment for such services may be ordered retroactively.
(d) Private School Tuition. Summer Camp. Other Needs. The support schedule does not take into consideration expenditures for private school tuition or other needs of a child which are not specifically addressed by the guidelines. If the court determines that one or more such needs are reasonable, the expense thereof shall be borne by the parties in reasonable shares. The obligor's reasonable share may be added to his or her basic support obligation.
(e) Mortgage Payment. The guidelines assume that the spouse occupying the marital residence will be solely responsible for the mortgage payment, real estate taxes, and homeowners' insurance. Similarly, the court will assume that the party occupying the marital residence will be paying the items listed unless the recommendation specifically provides otherwise. If the obligee is living in the marital residence and the mortgage payment exceeds 25% of the obligee's net income (including amounts of spousal support, APL and child support), the court may direct the obligor to assume up to 50% of the excess amount as part of the total support award.
Explanatory Comment to Rule 1910.16-6--1998 As part of the overall reorganization of the rules, New Rule 1910.16-6 consolidates the existing provisions in Rule 1910.16-5 relating to the additional expenses that warrant an adjustment to the basic support obligation. Substantive changes are noted as follows.
1. Child Care Expenses. (See the Committee Report). New subdivision (a) substantially incorporates existing subdivision (i) of Rule 1910.16-5 with two substantive changes. First, it changes the method of allocation from one of equal shares to proportionate shares based on the parties' net incomes. Second, it reflects the federal child care tax credit that is available to the custodial parent. Although this tax credit ranges from 20-30% depending on the custodial parent's income, the Committee has chosen to simplify the calculation for purposes of establishing or modifying a support obligation by adopting the average of 25%. At higher income levels, the court should consider that the credit gradually begins to decrease to the point where it reaches the minimum rate of 20%. In terms of reducing the overall support obligation, however, the difference is negligible.
There are two important limitations on the use of this tax credit. First, it applies only to the first $2,400 per year ($200 per month) for one child or $4,800 per year ($400 per month) for two or more children. Only child care expenses incurred up to these amounts, therefore, are reduced by 25% before allocating them between the parties. Any remaining expenses are allocated between the parties without adjustment. Second, since the tax credit may be taken only against taxes owed, it cannot be used when the custodial parent does not incur sufficient tax liability to fully realize the credit. For this reason, subsection (2) provides that no adjustment to the total child care expenses may be made if the custodial parent's gross income falls below the thresholds set forth therein. The income thresholds are based on 1997 tax rates.
2. Health Insurance Premiums. (See the Committee Report). New subdivision (b) reflects the Committee's proposal to treat the cost of health insurance premiums as an additional expense to be allocated between the parties in proportion to their net incomes. In addition, the Committee proposes to permit allocation of the portion of the premium attributable to the party who is paying it as well as the portion attributable to the other party or children. Subsection (2) provides for proration of the premium when the health insurance covers other persons who are not the subject of the support action.
3. Unreimbursed Medical Expenses. (See the Committee Report). New subdivision (c) substantially incorporates existing Rule 1910.16-5(p) with four changes. First, since the first $250 of medical expenses per year per child is built into the basic guideline amount in the child support schedule, only medical expenses in excess of $250 per year per child are subject to allocation under this Rule as an additional expense to be added to the basic support obligation. Second, the Committee has chosen to draw this same line with respect to spousal support so that the obligee-spouse is expected to assume the first $250 per year of these expenses and may seek contribution under this Rule only for unreimbursed expenses which exceed $250 per year. The third proposed change is to amend the definition of ''medical expenses'' to include insurance co-payments, deductibles and orthodontia, and to exclude chiropractic services. The fourth proposed change is to distinguish between medical expenses which are recurring and predictable and those which are not. When the expenses are recurring and predictable, the court may establish a monthly amount for these expenses and add it to the basic support obligation so that it is collectible through a wage attachment.
4. Private School Tuition. Summer Camp. Other Needs. New subdivision (d) incorporates existing Rule 1910.16-5(l) and modifies the language only to conform to the new schedule.
5. Mortgage Payment. New subdivision (e) substantially incorporates existing Rule 1910.16(g), and has been changed only to provide some uniformity on what constitutes an unusually high mortgage payment that may justify an upward adjustment to the basic support obligation. The change is intended only for the benefit of the obligee living in the marital residence. There is no adjustment if the obligor is living there.
Committee Report The Family Support Act of 1988 [P. L. 100-485, 102 Stat. 2343 (1988)] requires that the child support guidelines be reviewed every four years to ensure that their application results in the determination of an appropriate child support award. With the assistance of Dr. Robert Williams, the developer of the Income Shares model, the Committee reviewed the most recent economic studies on child-related expenditures in intact households and assessed State guideline adjustments for low income, additional dependents, shared custody, child care, medical expenses and other factors that are considered in establishing or modifying a support award. Based on this review, the Committee proposes to recommend to the Supreme Court that it approve these proposed amendments to Pennsylvania Rules of Civil Procedure 1910.16-1 through 1910.16-5 relating to the support guidelines.
This Report highlights the major changes being proposed by the Committee.
1. Updating the Levels of Child Support1
The current levels of child support are based on economic estimates of intact household expenditures derived from national data dating back to the 1972-1973 Consumer Expenditure Survey conducted by the U. S. Bureau of Labor Statistics. In 1990, more recent economic estimates became available. These estimates are reflected in the proposed child support schedule in Rule 1910.16-3 and, pursuant to Federal and State law, must be adopted to ensure that children continue to receive adequate levels of support.
The more recent studies now consider households of up to six children. The support guidelines have been expanded, therefore, from four to six children. The newer studies also consider households with combined monthly net income of up to $12,600. Allowing for inflation, the model can be extended to families with monthly net income of up to $15,000. The Committee has chosen to do this so that the support guidelines will apply to more cases.
2. Elimination of the Grids and Chart of Proportional Expenditures2
In lieu of the existing grids and chart set forth in Rules 1910.16-2 and 1910.16-3(b) respectively, the Committee proposes to adopt a basic child support schedule as the method for presenting the new economic estimates. The schedule is a step between grids and a chart, but has significant advantages over both in its accommodation of the proposed amendments to the guidelines. While the grids may be easier to use and reflect amounts for both child and spousal support, they have limited coverage of combined income ranges. Further expansion of these ranges would produce grids that are too unwieldy and cumbersome to work with, particularly in light of the extension of the guidelines to combined monthly net income of $15,000.
Although the chart of proportional expenditures is more comparable to the schedule, the schedule provides a smoother mechanism for eliminating the gaps in support obligations that would otherwise exist as the result of the economic studies indicating that the proportion of net income spent on children declines as income increases, even though the level of spending (i.e., actual dollars) on children increases as income increases. The schedule also has the advantage of eliminating two steps in the calculation of support pursuant to the formula in Rule 1910.16-4.
3. Incorporation of a Computed Allowance Minimum (CAM)3
The Committee proposes to incorporate a Computed Allowance Minimum (CAM) so that low-income obligors retain sufficient income to meet their basic needs and maintain the incentive to continue working so that support can be paid. The CAM is built into the child support schedule in Rule 1910.16-3 and adjusts the basic support obligation so that obligor's net income does not fall below $500 per month. Since the schedule does not reflect amounts of spousal support or APL, proposed Rule 1910.16-3(e)(1)(B) requires a similar adjustment in these cases so that the obligor's net income does not fall below $500 per month in these cases.
The 1997 Federal poverty guideline is $658 per month. Income levels set by other states range from as little as $430 in Colorado to as much as $710 in Vermont. The Committee chose $500 per month as the level necessary to maintain a minimum standard of living, and invite comment on whether this is too high or too low.
4. Multiple Families4
The Committee proposes to simplify the calculation of support obligations in multiple-family situations. The premise of existing Rule 1910.16-5(n) governing multiple child support obligations is that all of the party's children should have equal access to his or her resources. While this may be a laudable goal, the Rule has proven extremely difficult in practice because it requires separate calculations for each family before an order can be established for the children who are the subject of the support action. It does not result in an accurate order, therefore, unless all of the families are present at the same hearing. This is not feasible in many cases, particularly when one or more families reside in different states. Nor does it work well in cases where a pre-existing child support order for other children has already been entered by another county or state and the amount of the order does not conform to the amount which would be theoretically calculated under the Rule.
To address these problems, the Committee proposes to rescind Rule 1910.16-5(n) and to recommend what is commonly described as the ''first mortgage, second mortgage'' approach. This approach requires a deduction from the party's gross income for any child support being paid pursuant to a pre-existing court order entered on behalf of first born children who are not the subject of the support action. While it gives some priority to these children over later born children, many Committee members felt strongly that a parent should be required to meet his or her obligations to the first family before incurring new ones, and that children from a prior marriage or relationship should be protected from the adverse financial consequences of the parent's decision to remarry or to have more children. Essentially, the second family takes the obligor as they find him or her--with an existing obligation. While it is true that the children of this second family had no choice in the matter, the majority of Committee members felt that these children are entitled only to the standard of living established by their two parents, and not the standard of living that may have existed earlier in the first family.
For many of these same reasons, the Committee also proposes to rescind Rule 1910.16-5(o) relating to multiple spousal support obligations and to recommend deducting from gross income the amount of alimony, spousal support or alimony pendente lite being paid to a prior spouse. Under the existing Rule, second and subsequent spouses do not receive priority over any children, including children born outside of or after the marriage. The Rule provides no guidance on the priority between a first spouse and later children. In examining the stated rationale for (o)-- ''unlike children who have no choice about the family situation into which they were born, these later spouses had an opportunity to investigate a potential spouse before committing themselves'' --the Committee concluded that this rationale did not apply to the first spouse, whose ''investigation'' before the marriage would not have revealed these children. If, however, this spouse were to receive priority over later children then, for the same reasons, second and subsequent spouses should also receive priority over children born outside of or after their marriages as well.
The proposed approach reorders the priorities in multiple-family situations. First born children subject to a pre-existing order receive priority over later born children and later spouses. A spouse receives priority over later spouses and may receive priority over children born after the marriage. This approach, which is used by the majority of Income Shares states, eliminates the practical problems associated with multiple-family calculations under Rule 1910.16-5(n) and (o). Since it effectively transforms the calculation into an issue of net income, it appears in proposed Rule 1910.16-2(c)(2) and(3) relating to the calculation of net income.
5. Shared Custody5
Under the existing guidelines, there is no formula or procedure for deviating from the basic support guideline when custody is shared equally or the non-custodial parent has substantial partial custody. Rule 1910.16-5(m) provides that a non-custodial parent's support obligation should be reduced only if that parent spends ''an unusual amount of time with the children.'' There have been several decisions rejecting deviation even if the non-custodial parent spends almost 50% of the time with the children. See e.g., Anzalone v. Anzalone, 449 Pa. Super. 201, 673 A.2d 377 (1996)(40% of time spent with father was not an unusual amount of time justifying deviation absent evidence of additional expenditures incurred as a result of that time with the child); Dalton v. Dalton, 409 Pa. Super. 258, 597 A.2d 1192 (1991) (average of 43% of time was not sufficient to warrant deviation).
The general assumption, however, is that in a case of 50-50 shared custody, there would be some reduction in the support obligation. Courts and hearing officers struggling with this issue have adopted various approaches, some on an ad-hoc basis, with varying degrees of success. While there is no reliable survey of the various methods being used, anecdotal evidence suggests that the most common method for addressing support in shared custody cases is to use the offset method for split or divided custody cases under Rule 1910.16-5(h), which involves determining what each parent would owe if the other parent were the primary custodian and then subtracting the difference. A common additional step is to then divide that difference in half. While this has the beauty of simplicity, it often produces inequitable, sometimes absurd, results. For example, under the present guidelines, if obligor has net income of $4,300 per month and obligee has net income of $2,900 per month, obligor's support obligation for three children is $1,114 per month. If, however, the parties shared custody 50-50, and support was calculated under the divided custody rule, and then further divided in half, the support payment drops to $181 per month.
As one can see, an increase in the non-custodial parent's time by as little as 7% (i.e., from 43% to 50%) can result in a reduction in the support obligation by almost 85%. Although not all income scenarios provide an example as stark as this one, in virtually every case the support reduction under this method is out of proportion to the increase in custody time.
The Committee has frequently been asked to provide some kind of guidance for a uniform approach to shared custody cases. The issue, however, is far from simple. Around the country, only 28 states have addressed support obligations in the context of shared custody. Some states are silent (like Pennsylvania has been until now). The states that do address it approach it in many different ways. None of the methods are mathematically simple and some are extremely complex and confusing. All of them produce anomalous results under some income or custody scenarios.
With the assistance of Dr. Williams, the Committee spent considerable time and effort examining seven separate methods. The Committee felt strongly that if there was to be an adjustment to the support obligation for an unusual amount of time spent with the child--for example, beginning at 30% and up to 50% of the time--the method must recognize that the custodial parent continues to incur fixed costs for the child even when the child is with the other parent. The Committee also felt strongly that the method should not create a strong financial incentive for the non-custodial parent to seek shared custody. If there was to be an adjustment, it must be a gradual one that is rationally tied to the gradual increase in time spent with the child and one which does not produce the enormous reduction in support at some point in time. Unfortunately, none of the models met all of these objectives. Some were better at some income levels or income differentials between the parties while others were better under other circumstances. All of them, however, resulted in inconsistencies or anomalies under some scenarios.
The Committee rejected the option of concluding that there was no perfect solution and that the rules should remain unchanged. If at all possible, guidance should be provided for shared custody situations.
The last option, and the one selected for recommendation by the Committee, is not to permit any deviation from the basic support obligation based on the amount of time that each parent spends with the children. This option eliminates the strong financial incentive to seek shared custody. While we considered that this option may also have the opposite effect of discouraging a party from seeking shared custody, even when it may be in the best interests of the children, we concluded that there is little difference between the parent who seeks shared custody in order to reduce the support obligation and the parent who is unwilling to spend more time with the children unless it means a reduction in the support obligation (or the parent who is reluctant to let the children spend more time with the other parent if it means a reduction in the support obligation). Financial considerations should not be relevant to a parent's decision to spend more or less time with the children. The proposed approach accomplishes this by removing the financial incentive altogether so that it doesn't factor either way into this decision.
Even in the vast majority of cases in which parties are not motivated by financial incentives, the Committee considered that the amount of time spent with the non-custodial parent, even if substantial, results in little savings to the custodial parent, who continues to incur fixed expenses relating to the children-- e.g., housing, furniture, and school-related expenses--even when the children are spending time with the other parent. Conversely, even though the non-custodial parent may incur additional costs as the result of more time spent with the children, many of these costs merely duplicate the costs already being incurred by the custodial parent.
In reaching a determination that there will be no deviation from the basic support obligation, the Committee had to determine who should be the obligor for purposes of support in a 50-50 shared custody situation. The Committee recommends that the obligor be the parent with the higher income so that the total available income is more evenly distributed between the two households. If the parties' incomes are identical, there should be no basic support obligation except in unusual circumstances. In these cases, however, either party may still seek contribution from the other party for any additional expenses incurred on behalf of the children which are typically added to the basic support obligation--e.g., health insurance premiums, child care, private tuition and other expenses that are not built into the basic support amounts set forth in the schedule.
This is a very short synopsis of a very lengthy, difficult and complex analysis. We do not expect this recommendation to be received with unanimous acceptance, but we believe it to be better than the present void. We recognize the possibility that there may be better solutions. The Committee invites comment from the bench and bar and all interested persons. Specific suggestions, formulas, and mathematical models are welcome. Expressions of general dissatisfaction, without more, are also welcome but are not helpful to an ultimate resolution of the problem.
6. Calculation of the Presumptive Minimum Amount of Child Support in High Income Cases6
Under the existing guidelines, the presumptive minimum amount of the child support obligation in high income cases is calculated as if the parties' only had $10,000 combined income. The parties' percentage shares of the obligation are also based on this theoretical income. The Committee proposes to alter the calculation so that the parties' percentage shares are calculated using their actual income rather than theoretical income.
There are several problems with calculating the parties' percentage shares using theoretical rather than actual combined income. For example, in the second illustration which appears in existing Rule 1910.16-5(a), where the obligor and obligee have monthly net incomes of $15,000 and $3,000 respectively, the presumptive minimum amount of support of $2,410 for three children is calculated using only $8,000 of obligor's income and $2,000 of obligee's income. The obligor's obligation of $1,948 is calculated as if his or her percentage share is 80% of $10,000 when, in reality, his or her percentage share is 83% of $18,000. This is economically unfair to the obligee and the three children, and is remedied by using actual combined income to determine the parties' percentage shares.
Another problem with using theoretical income is that the calculation uses only 53% of obligor's actual income ($8,000 of $15,000) while using 66% of obligee's monthly income ($2,000 of $3,000). This is also unfair to the obligee and the three children, and would be corrected by using all of the parties' income to determine their respective shares.
A third problem is that the income limitation of $2,000 per month for obligee results in the same presumptive amount of support for a family in which obligee earns only $2,000 as it does for a family in which the obligee earns substantially more than that, all other things being equal. This is unfair to the obligor and would be remedied as well by using the parties' actual combined income. If, for example, in the above illustration the obligee earned $9,000 rather than only $2,000, the obligor's percentage share would be reduced to 62% of $2,410, which effectively reduces the obligor's obligation to $1,494.
7. Calculation of Spousal Support7
Pursuant to the existing guidelines formula in Rule 1910.16-4, the presumptively correct amount of spousal support or APL is calculated as a straight percentage of the net difference between the parties' incomes (after considering child support). If no children are involved, the percentage is 40%; if children are involved, the percentage is 30%. The Committee has been asked repeatedly to clarify whether this formula is intended to apply to all spousal support and APL cases or whether, in cases where the parties' combined net income exceeds $15,000 per month, the court may disregard the formula and use a reasonable needs analysis like the one used in Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984) for child support. The issue has received even greater attention recently in light of Karp v. Karp, __ Pa. Super. ____, 686 A.2d 1325 (1996), which analyzed the needs and lifestyle of the parties in fashioning an appropriate APL and child support order, and Terpak v. Terpak, __ Pa. Super. ____, 697 A.2d 1006 (1997), which implicitly approved York County's use of the formula for calculating a spousal support obligation even though the parties' combined income exceeded the guideline amount, and held that a lack of need on the part of the obligee was not a basis for deviation (Terpak did not address the obligor's needs because it was not an issue raised in the case).
Neither the existing rules nor the case law provide any authority for going outside of the guidelines formula and using Melzer to calculate a spousal support or APL obligation. The Committee considered, however, whether the rules should permit this in cases where the parties' combined income exceeds $15,000 per month. Ultimately, however, we concluded that drawing a line at this income level, or any income level, would be purely arbitrary. The only reason that a court must shift from the guidelines to Melzer in child support cases is because the economic studies underlying the Income Shares model for child support do not, and cannot, consider intact households with combined income beyond $12,600 per month. There are no statistically significant numbers available for these households to support an extension of the model beyond this income level (inflation allows extension only to $15,000). In the absence of any comparable model for spousal support based on studies of spousal-related spending in intact households, there is no economic or theoretical basis to warrant the same shift from the guidelines to Melzer in spousal support cases when the parties' combined income reaches a certain level.
Of course, it is precisely the lack of any theoretical model for spousal support that has prompted some members of the bench and bar to question the fairness of using a formula which calculates the support obligation as a straight percentage of income. This raises a very different issue altogether, however,--namely, whether the formula should be used at all in any spousal support case. It is not just an issue which affects only high income cases because if, as the theory goes, a flat percentage of income bears no relationship to the parties' actual needs and circumstances, then it would be just as unfair to award it in lower and middle income cases as well. A family's needs and financial resources should be given the same consideration by the court regardless of whether that family has combined income of $5,000 per month or $15,000 per month.
The Committee concluded that the formula itself is not inherently unfair because it is used only to establish the presumptively correct amount of spousal support or APL. Proposed Rule 1910.16-1(d) clearly states that the support guidelines create a rebuttable presumption only and must be applied taking into consideration the special needs and obligations of the parties and the deviation factors set forth in Rule 1910.16-5. Any unfairness, therefore, results from the failure to consider unusual factors in arriving at an appropriate amount of support, and not from the use of the formula in establishing a presumptive amount of support.
Although the presumption is always susceptible to becoming the rule itself when mechanically applied without regard to the permitted deviations, this is true of any presumption and merely reflects an erroneous application of the support guidelines. When they are properly applied, they essentially provide a Melzer-type model for spousal support and APL. The Committee is not aware of a better model that would not involve an elaborate and complicated restructuring of the support guidelines. The alternative--no formula at all--does not address the existing problem in larger counties which are confronted daily with a large number of these cases. While there appears to be no better solution, the Committee invites comment on ways to improve the guidelines so that there is more meaningful deviation from the presumptive formula in spousal support and APL cases.
The Committee recommends that courts be permitted to consider the length of the marriage as a factor for deviation in spousal support or APL cases. The purpose of this provision is to prevent the perceived unfairness that arises in a short-term marriage when the obligor is required to pay support over a substantially longer period of time than the parties were married. The Committee considered more specific language which would have limited the duration of the support order to a period of one year or less in cases where the parties had been married for less than two years. We ultimately rejected this language as arbitrary and somewhat unrealistic in light of the fact that some divorce proceedings last much longer than two years. We invite comment on this issue as well.
8. Child Care Expenses8
Current Rule 1910.16-5(i) provides for equal sharing of child care expenses. The Committee proposes to adopt proportionate sharing based on the parties' net incomes so that child care expenses are divided in the same manner as other expenses which are typically added to the basic support obligation. The proposed Rule also reflects the availability of the Federal child care tax credit which can be claimed by the custodial parent. This credit essentially reduces the total expenses subject to allocation. For tax purposes, the actual credit can range anywhere from 20 to 30 percent depending on the custodial parent's income. For support purposes, the Committee has chosen to simplify the calculation by assuming an average tax credit of 25 percent. Although the court may always look at the actual tax rate that applies in a particular case, it will have very little impact on the overall support award.
The explanatory comment also sets forth the limitations on the use of this credit. First, the credit applies only to the first $2,400 per year for one child or $4,800 per year for two or more children. Thus, only child care expenses incurred up to these amounts are reduced by 25%. The remaining child care expenses, if any, are allocated between the parties without adjustment.
Since the tax credit may be taken only against taxes owed, it cannot be used when the custodial parent does not incur sufficient tax liability to fully realize the credit. For this reason, the proposed Rule does not permit any adjustment to child care expenses if the custodial parent's gross income falls below the income thresholds set forth in the Rule.
9. Health Insurance Premiums9
Current Rule 1910.16-5(b) permits a deduction from gross income of the portion of health insurance premiums benefitting the other party or the children. The Rule provides little incentive for either party to obtain or maintain health insurance coverage for the benefit of the other family members. If the obligor is paying for the insurance, it reduces the basic support award only marginally. If obligee is paying for the insurance, he or she receives virtually no financial credit at all in terms of a higher support award. Given the importance of health insurance coverage, the Committee proposes to maximize the value for the party paying the premium by treating it as an additional expense subject to allocation between the parties in proportion to their net incomes. This more accurately reflects the costs of carrying such insurance and also ensures that the obligee receives some financial credit for carrying the insurance.
The proposed Rule also permits allocation of the entire premium, including the party's portion of the premium, when the insurance benefits the other party or the children. This provides further incentive for parties to obtain health insurance for the benefit of the other party and the children.
10. Unreimbursed Medical Expenses10
The Committee proposes several changes to the treatment of unreimbursed medical expenses. Since the first $250 per year per child of these expenses is already built into the basic child support obligation reflected in the schedule, only medical expenses which exceed this amount are subject to allocation between the parties as an additional expense to be added to the basic support obligation. The proposed Rule reflects this distinction.
The Committee has also chosen to draw this same distinction with respect to spousal support so that the obligee-spouse is expected to meet the first $250 per year of his or her own unreimbursed expenses before seeking contribution from the obligor for any additional expenses.
To reduce the number of contempt cases involving unreimbursed medical expenses, the Committee proposes further to distinguish between those expenses which are predictable and recurring and those which are not. When the expenses are predictable and recurring, the court may establish a monthly amount for those expenses and add it to the basic support obligation. This permits the monthly amount to be collected more easily through wage attachment. When the expenses are not predictable or recurring, and thus not conducive to routine wage attachment, the court may nonetheless order the defendant to pay his or her percentage share of these expenses.
Finally, the Committee also proposes to amend the definition of ''medical expenses'' to include insurance co-payments and deductibles, and to include orthodontia and exclude chiropractic services.
HON. MAX BAER,
Chairperson
Domestic Relations Procedural
Rules Committee[Pa.B. Doc. No. 98-370. Filed for public inspection March 6, 1998, 9:00 a.m.] _______
1 See Proposed Rule 1910.16-3.
2 See Proposed Rule 1910.16-3.
3 See Proposed Rules 1910.16-2(e)(1) and 1910.16-3.
4 See Proposed Rule 1910.16-2(c)(2)--(3).
5 See Proposed Rules 1910.16-4(b) and 1910.16-5(c).
6 See Proposed Rule 1910.16-2(e)(2).
7 See Proposed Rules 1910.16-1(d), 1910.16-3 (formula) and 1910.16-5(b)(8) (deviation).
8 See Proposed Rule 1910.16-6(a).
9 See Proposed Rule 1910.16-6(b).
10 See Proposed Rule 1910.16-6(c).
