Note: the following article drafted by Elisabeth Edwards was posted to the IndyBar Association website in November 2015 and included in the December 2, 2015 issue of the Indiana Lawyer.
On November 5, 2015, the Indiana Supreme Court issued an Order Amending the Indiana Child Support Guidelines (“Guidelines”). A redline copy is available at http://www.in.gov/judiciary/files/order-rules-2015-1105-child-support.pdf. Any attorney practicing family law should read the revised guidelines in full; however, a brief overview of the major changes is included in this post, as well as some information gleaned from the Family Law Section Fall Open Meeting held on November 17, 2015. Practitioners should consult the Order showing the redline changes which will take effect on January 1, 2016.
Prior versions of the Guidelines provided a deduction from income for spousal maintenance paid as a result of a former marriage. In like manner, alimony or maintenance received from other marriages was also counted as part of weekly gross income. The Guidelines have been revised to remove the limitation on maintenance only serving as a credit or income if paid or received from a prior or “other” marriage. Therefore, maintenance will be included as income or a deduction regardless of whether it involves the parties to the child support action or not.
Similarly, the revised Guidelines remove language prohibiting a deduction for support ordered as the result of a second or subsequent marriage. Therefore, it can now be argued that establishment of a support order in a second marriage may constitute a change in circumstance and modification of support in the first marriage.
Imputation of Income
Prior Guidelines included language that “regular and continuing payments made by a family member, subsequent spouse . . . that reduce the parent’s costs for rent, utilities, or groceries, may be the basis for imputing income.” The revised Guidelines take this concept one step further and include language providing, “If there were specific living expenses being paid by a parent which are now being regularly and continually paid by that parent’s current spouse or a third party, the assumed expenses may be considered imputed income to the parent receiving the benefit.”
Adjustment of Weekly Gross Income for Subsequent Children
Prior Guidelines included that the subsequent child multiplier should be applied for parents who had a legal duty or court order to support children naturally born or legally adopted subsequent to the existing support order. The new language provides that the adjustment shall be applied to “weekly gross income of parents who have a legal duty or court order to support children (1) born or legally adopted subsequent to the birthdate(s) of the child(ren) subject of the child support order.” This avoids a possibly confusing situation where a child is technically born after the child who is the subject of the child support order but perhaps before any child support order goes into effect.
Cost of Health Insurance for Children
The revised Guidelines add additional information as to how to calculate the child’s portion of health insurance costs. Specifically, the Guidelines provide that “only the amount of the insurance cost attributable to the child(ren) subject of the child support order shall be include, such as the difference between the cost of insuring a single party versus the cost of family coverage. In circumstances where coverage is applicable to persons other than the child(ren) subject of the child support order, such as other child(ren) and/or a subsequent spouse, the total cost of the insurance premium shall be prorated by the number of persons covered to determine a per person cost.”
Social Security Benefits
The revised Guidelines more clearly provide that benefits received by a custodial parent based upon the custodial parent’s disability are included in the custodial parent’s income for purposes of calculating child support AND are also a credit toward the custodial parent’s child support obligation.
Abatement of Support upon Emancipation of a Child
The revised Guidelines remove language permitting an automatic abatement of support (now revised for emancipation at age 19) upon the emancipation of a child if it is undisputed. Rather, parents “should seek to modify or terminate a support order when a child(ren) becomes emancipated under Indiana Law.”
Additions to Controlled Expenses
The revised Guidelines include additional language and examples of the “education” expenses which are the responsibility of the parent paying controlled expenses, such as “ordinary costs assessed to all students, such as textbook rental, laboratory fees, and lunches.” The Guidelines go on to provide that “the cost of participating in elective school activities such as sports, performing arts and clubs” – costs are that not assessed to all students – “as well as related extracurricular activities are ‘optional’ activities” and are designated as “Other Extraordinary Expenses” per the Guidelines.
The bulk of the changes to the Guidelines occurred in this area, incorporating the Affordable Care Act and eliminating the Health Insurance Premium Worksheet (HIPW). While they are too numerous to go into further detail here, Family Law practitioners are encouraged to read this section in total to ensure clients’ compliance with these new provisions.
Some of the changes include:
- Elimination of the “reasonable cost” calculation and new rebuttable presumption that parents have health insurance available at a reasonable cost due to the Affordable Care Act;
- Language regarding ways that presumption may be rebutted;
- A requirement that a parent shall provide the court with proof of existing public or private health insurance for the child through any source, and if the child is not covered, then proof of the cost or an exemption certificate; and
- Language allowing courts to order the parent providing health insurance to show proof of coverage and provide notice of any coverage changes or coverage termination and possible sanctions against a parent who fails to provide insurance as ordered or who fails to notify the other parent of changes in insurance status.
Parents and practitioners should carefully consider the health insurance tax subsidies or tax penalties under the Affordable Care Act when requesting exemptions, as only the parent providing the health insurance is eligible to receive the tax subsidy and exemption. Further, if a parent is ordered to provide health insurance and fails to do so, yet claims the child as an exemption, they will incur a tax penalty for not providing insurance. The tax penalty for failing to provide insurance follows the child and the exemption.
Post-Secondary Education Expenses
The Guidelines were revised to move the deadline for filing for post-secondary education payments to prior to the child turning 19 years of age, in line with the revised emancipation date. Further, additional language is included regarding the factors Courts should consider when determining whether or not to award post-secondary educational expenses, such as each parent’s income, earning ability, financial assets and liabilities. “If the expected parental contribution is zero under . . . FAFSA” or if “an award of post-secondary educational expenses would impose a substantial financial burden, an award should not be ordered.” A member of the committee responsible for the changes to the Guidelines indicated that this is a directive that it is preferable for parents to iron out their own agreements rather than bringing them to Court.
Courts are now required to specify in a child support order which parent may claim the child(ren) as dependents for tax purposes, and must include language in child support orders that “a parent may only claim the exemption if the parent has paid at least 95% of their court ordered support for the calendar year in which the exemption is sought by January 31 of the following year. “ The Guideline “recommendations” for Courts to consider to release exemptions are now required to be considered.
Finally, it was provided in the open meeting that these new Guidelines are similar to the revised Indiana Parenting Time Guidelines in that they are not automatically applied to already existing cases involving child support. Parties must opt in by requesting same with the Court after January 1, 2016.