The most common questions I receive are about child support and spousal support (alimony).
How Is Child Support Calculated?
In 1982, the Michigan Friend of the Court Act required the Supreme Court Administrator’s Office to create a formula to be used as a guideline for recommending child support. A committee of family law attorneys, psychologists, public health officials and members of the general public studied the issue and, with input from economists, created Michigan’s child support formula, which went into effect in 1984. (Officially, the document is titled Michigan Child Support Formula, but it is much more commonly referred to as the child support “guidelines.”) The guidelines are based on the estimated costs of raising children in Michigan with consideration to the income of the parents and the number of children. In creating the guidelines, the committee assumes that a certain percentage of a family’s income is utilized for the support of the children; therefore the guidelines attempt to prorate these expenses between the two parents. These expenses include food, clothing, entertainment, and extra-curricular activities for the child. In addition, a portion of the child support amount also includes money for mortgage or rent, insurance, utilities and other expenses related to the maintenance of the household. The rationale is that it is necessary for the child to have shelter, so these expenses are factored into the Michigan.
Child Support Formula
Under Federal law, the guidelines are updated every 4 years and Michigan’s Child Support Formula was last revised in 2012. A committee continuously meets and presents their proposals to the Michigan Supreme Court, which ultimately issues the guidelines.
Can Child Support Be Modified?
Child Support in Michigan can be modified in two ways. First, each parent has the right to request the Friend of the Court investigate the amount of child support every three years. Second, a parent may petition the court to modify child support if there has been a significant change of circumstance. In the child support guidelines, a significant change of circumstances is defined as a 10% change of income. Therefore, if a parent has a 10% reduction in income or believes the other parent has had a 10% increase in income, they may petition for a modification. It is important to remember that the court cannot modify child support retroactively. The court will only modify child support from the date the motion is filed with the court. Therefore, if one of your patients has lost their job, it is important that they file a motion immediately. It is distressing to see someone incur a substantial arrearage simply because they waited a long time before contacting the court.
Does The Amount Of Parenting Time Have With A Child Factor Into The Amount Of Child Support?
Yes, the three primary factors in the child support calculation are the payor’s income, the payee’s income and the number of overnights of parenting time.
If One Of The Parents Has Remarried, Does The Income Of The New Spouse Impact The Child Support?
No, because Michigan’s child support guidelines are based on the proportion of income between the two parents, income from a new spouse are not factored into the guidelines. This can seem unfair if one of the parties marries someone with a significant income, but courts are reluctant to deviate from the child support guidelines for this reason.
What Happens If One Parent Quits Their Job To Avoid Paying Child Support?
Michigan courts are permitted to impute income to a party if they have quit their job or reduce their income to avoid paying child support. This means, for the purpose of calculating child support, the court will “pretend” that party earns the amount they were earning previously. Income can also be imputed to the recipient of child support if they are not earning to their full capacity.
How Is Child Support Collected And Disbursed?
With the ease and availability of electronic banking, the days of checks being mailed to and from the Friend of the Court are long gone. Under Federal law, child support must be administered by a statewide system. Therefore, Michigan created the Michigan State Disbursement Unit (MiSDU). If the payer earns a paycheck, the child support is withheld from their paycheck and sent directly to MiSDU. The money is then deposited into the payee’s bank account, usually the next day. If the payee does not have a bank account, MiSDU provides a debit card, in which the child support is “loaded.” If the payer does not receive a paycheck (own their own business, working under the table), they will have to mail the checks to MiSDU. The MiSDU system is online, allowing both parties to review all information regarding their account. However, even with the statewide payment system, if a party has a problem with their child support, they must go through the Friend of the Court.
Do The Parties Have To Pay Through MiSDU Or Use Friend Of The Court Services?
In Michigan, parties may “opt out” of the Friend of the Court if they want to make direct child support payments. However, it is an all or nothing decision. By “opting out,” the parties are waiving their right to utilize any FOC services for any purpose. Therefore, they will have no recourse if they have disputes related to the child support, parenting time and child custody. The parties always have the right to petition the court to “opt in” to the FOC. However, there are Judges that refuse to hear any issues that arose during the “opt out” period. Therefore, I strongly advise my clients not to “opt out” unless the children are in high school and there is little chance that FOC services will be needed.
What If One Of The Parties Is Hiding Income, Especially If They Own Their Own Business?
When the case is in court, the parties have subpoena power and can subpoena payroll records directly from an employer. However, cases become significantly more complicated if one of the parties owns their own business. The Michigan child support guidelines deal directly with some of the issues of the business owner, including adding deductions like depreciation (which is a tax benefit, but is not an actual expenditure) and expenses such as auto lease payments as income to the business owner.
Many cases involving business owners can be resolved by reviewing their tax returns and adding these expenses and deductions as income. However, in some cases, it is necessary to hire a forensic accountant who will review all of the business’ financial documents and calculate the owner’s true income.
What About Day Care Expenses?
Usually day care expenses are divided in proportion to the incomes of the parties. The court will also only mandate the payer contribute to child care that is necessitated by the payee’s work or school schedule. Usually, the amount of child care is included in the amount the payer pays through MiSDU, but is also common for the parties to pay their share to the child care provider directly.
Are The Costs Of Extracurricular Activities Covered By Child Support?
According to the Michigan’s child support guidelines, extracurricular activities are covered by child support. However, many parties agree to divide the costs of these expenses, in addition to the amount of child support, as long as the activities and expenses are approved by both parties.