Whether a person is considering a divorce, paternity, or custody case, many people want to know how child support is calculated in Indiana. It is a somewhat complex calculation based upon several factors which are unique for nearly every case involving child support. The first factor depends upon the amount of children the parties to the case have in common. The more children you have in common, the higher the non-custodial parent’s support obligation will be. The next factor is the parties’ respective incomes.
Gross Weekly Income
Both parties’ gross weekly incomes are put into the equation. “Gross” means the income a person receives before taxes and other deductions are taken out as compared to “net,” which is the take-home amount after taxes and deductions. The Indiana Child Support Guidelines defines weekly gross income as “actual weekly gross income of the parent if employed to full capacity, potential income if unemployed or underemployed, and imputed income based upon “in-kind” benefits.” Gross weekly income of each parent includes income from any source, with a few exceptions, including income from salaries, wages, commissions, bonuses, overtime, partnership distributions, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workmen’s compensation benefits, unemployment insurance benefits, disability insurance benefits, gifts, inheritance, prizes, and alimony or maintenance received from other marriages. Also, Social Security Disability benefits paid for the benefit of the child is included in the disabled parent’s gross income; however, the disabled parent is entitled to a credit for the amount of the disability benefits paid for the benefit of the child.
Although you may not receive actual money or income from “in-kind” benefits from your employer, such benefits can still be considered income if they are significant and reduce personal living expenses. Such benefits may include a company car, free housing, or reimbursed meals.
Some situations are very easy to determine. For example, if a person’s only source of income is a salaried position, then you simply use his/her weekly gross salary. However, it becomes more complicated when you consider the section of the definition of gross weekly income that states, “if employed to full capacity.” This part of the definition keeps people from being able to reduce their support obligation by quitting their jobs. If a court finds a parent is voluntarily unemployed or underemployed without just cause, then a court can calculate child support based upon that party’s potential income. Determining a person’s potential income can be based upon a person’s prior work history, occupational qualifications, prevailing job opportunities, and earnings levels in the community.
Now there are 3 possible deductions from a person’s gross weekly income, which are Prior Born Children, Subsequently Born Children, and Alimony or Maintenance Paid.
Prior Born and Subsequently Born Children
The next factor taken into consideration is whether either or both of the parties have any children born prior to the children in common and also whether either or both have children born after the children in common. For subsequently born children, an adjustment is made to the party’s gross weekly income for the number of subsequent children. The more subsequent children a person has, the more his/her gross weekly income is reduced for child support purposes. If a person has any children born prior to the children in common, then it is handled differently than subsequently born children. If you have a child support obligation, or order, to pay child support for the prior born children, then the full amount of the child support you pay for the prior born children will be deducted from your gross weekly income for child support calculation purposes for the children in common. Similarly, if a person has prior born children and is the custodial parent, meaning he/she doesn’t have a child support obligation, that person can get a deduction for a “legal duty” to support those prior born children. Even though there is no court order for support, the parent can get a deduction from his/her gross weekly income for funds actually expended for the prior born children.
Alimony or Maintenance from Prior Marriage
The final deduction allowed from a person’s gross weekly income is for alimony or spousal maintenance ordered for prior marriages. Such alimony or maintenance deductions are allowed only if such payments result from a court order. Further, these deductions are only for payments classified as alimony or maintenance as periodic payments from a property settlement order are not included under this deduction.
Additions to the Basic Child Support Obligation
After determining both of the parties’ adjusted gross weekly income by taking into consideration the factors above, there are some other factors that can add on to, or subtract from, a person’s basic child support obligation. The first factor is work-related child care expenses. Child care costs that are incurred due to employment or searching for employment of both parents should be added to the basic obligation. This includes the separate costs of a sitter, day care, or similar care of a child while the parent works or actively seeks employment.
The next factor would be the cost of health, vision and dental insurance for the children. The weekly cost of such insurance premiums for the children’s only portion should be added to the basic child support obligation whenever either parent actually incurs the premium expense. So for example, if the custodial parent pays the premiums, then the non-custodial parent’s basic support obligation would increase and, on the flip side, if the non-custodial parent pays the premiums, then his/her basic support obligation to the other would decrease.
The last factor is the parenting time credit the non-custodial parent receives. The credit depends upon the amount of overnights of parenting time the non-custodial parent is awarded as determined on an annual basis. If the non-custodial parent has 51 or less overnights per year, then he/she will get no credit. The non-custodial parent would start getting a credit at 52 overnights or more per year and the credit gradually increases the more overnights that person has. The theory behind this credit is that the more overnights the non-custodial parent has, the more duplicated and transferred expenses will be incurred by the non-custodial parent and so he/she should get a credit for incurring those.
Whether you are going through a divorce, paternity, custody or child support case, it is important to discuss your case with a local attorney as each case is fact specific. Contact Adam S. Lutzke Law Offices at (317) 577-3888, or at [email protected], for a free consultation to discuss your case.