Recent blogs have addressed the child support calculations, the formula and guidelines for same, and what numbers are used to come to a child support calculation1. A recent case handed down by the Indiana Supreme Court has addressed the issue of which year’s formula to use when interpreting an agreement. This case in the Court of Appeals was discussed in a prior blog as well2.
As the economy and times change, so do the formulas and calculations for child support, as the goal/purpose of child support is to provide for the child(ren) as if the parents had remained married. As such, the formula needs to be altered, amended, and updated periodically to remain in line with this goal, and to provide current formulas to obtain this goal.
In Schwartz v. Heeter, the case involved parties who were married with two (2) children, and subsequently divorced3. In this matter, Father made income that was consistently in the six figures, and the parties came to an agreement as to child support, where Father would pay a lower amount of child and an annual lump sum to account for irregular income (i.e. bonuses, commissions, etc.).
Per the agreement, the parties worked out the numbers to be inputted into the child support worksheet, and each year, the parties would recalculate child support by taking their gross taxable income from their tax returns that year, dividing by 52 (to determine weekly gross income) and use that as the income number for the child support worksheet. The difference between this and what Father had paid in child support would then be paid as a lump sum. This was called a Distribution Clause.
However, what the agreement did not account for was what formula would be used. Per the federal law and the Indiana Child Support Rules and Guidelines, the Guidelines must be amended regularly, and have been in 1993, 1998, 2004, and 2010. This is to remain in line with the times, and provide support for the benefit of the children.
The trial court in this case found that the Guidelines in effect the year the recalculation was done should control. The Court of Appeals reversed and said the Guidelines in effect in 2009, when the agreement was made, should be used for each recalculation. The Indiana Supreme Court then granted transfer.
The difference between using the 2009 Guidelines versus the 2010 Guidelines was under 2009, Father would owe $6,344. Under the 2010 Guidelines, Father would owe $44,720. The Indiana Supreme Court held that the agreement was silent about which Guidelines would be used, and the recalculation each year was meant to address the children’s needs, the Guidelines at the time of the recalculation, as amended frequently, should be used to recalculate.
Child support calculations can ultimately be complex and multi-faceted, and agreements to same may have nuances, such as the agreement above, that may have unforeseen issues. Consulting an attorney may be helpful in reviewing potential issues related to child support. We hope that this blog post has been informative about the specific child support issue of changing Guidelines.
Ciyou & Dixon, P.C. practices throughout the state of Indiana. This blog post was written by attorney, Jessica Keyes.