Docstoc

Child Support Discussion Points

Document Sample
Child Support Discussion Points Powered By Docstoc
					                     Child Support in Iowa 2010
                              by Patrick L. Wilson

www.iowasupportmaster.com
888-805-0363


I.     Rule 9.8 – QAD went from fixed $ amounts to percentage with caps.

II.    Rule 9.11 Variance/Discretion.

       <Rev>          9.11(2) Adjustments are necessary to provide for the needs
of the child and or to do justice between the parties, payor, or payee under the
special circumstances of the case. (Formerly “and”)

       <New>         9.11(4) The court shall not use earning capacity rather than
actual earnings unless a written determination is made that, if actual earnings
were used, substantial injustice would occur or adjustments would be necessary
to provide for the needs of the child or to do justice between the parties.

III.   Rule 9.4 Rebuttable Presumption.

       <Rev>         In ordering child support, the court should determine the
amount of support specified by the guidelines. There shall be a rebuttable
presumption that the amount of child support which would result from the
application of the guidelines prescribed by the supreme court is the correct
amount of child support to be awarded. That amount may be adjusted upward or
downward, however, if the court finds such adjustment necessary to provide for
the needs of the children or to do justice between the parties under the special
circumstances of the case. (Formerly “and”)

       <New>        The appropriate amount of child support is zero if the
noncustodial parent’s only income is from Supplemental Security Income (SSI)
paid pursuant to 42 U.S.C. 1381a.

       What is SSI vs. SSDI

        Supplemental Security Income (SSI) is paid by Uncle Sam to those who
have low income and few resources and are 65 or older or blind or disabled. SSI
is often confused with Social Security Disability Insurance (SSDI). SSI is a
“needs-based” benefit. It is a benefit paid to persons who are disabled of any
age, including children. SSI is also provided to people over age 65 whether or not
they are disabled. The key is “financial need" as the benefit is based on the
person’s lack of personal resources and income to meet necessities of life.
SSDI is a benefit paid to a person and certain members of their family if they are
"insured," meaning that the person worked long enough and paid Social Security
taxes. SSDI was created so workers who become disabled and unable to work to
their normal retirement age will be able to access their Social Security retirement
benefit early.

       In cases where the Obligor is on SSDI, the child should also be receiving
a benefit. In those cases, seek a dollar-for-dollar reduction in the child support
obligation.


IV.        Rule 9.12 Medical Support - Health Insurance/Cash Med


This is the “hot button” of the new guidelines.

Keep in mind:

      1.     The goal is to have the children covered under a plan of insurance.
      2.     The usual case is that the cost of the health insurance exceeds the
             “reasonable amount” standards and how do we handle this.

252E.1A – Must read. It is at the end of this outline.



       9.12(1) ….the court shall enter an order for medical support as required
by statute. For purposes of Iowa Code section 252E.1A, the table contained in
rule 9.12(4) is established for use by the courts of this state in determining
reasonable cost for a health benefit plan and a reasonable amount in lieu of a
health benefit plan (cash medical support). The sum certain dollar amount
determined shall be stated in the order, as an amount in addition to the child
support amount.

        9.12(2) Refer to the table in rule 9.12(4) to determine if the parent has
health insurance available at “reasonable cost”. Find the appropriate cell for the
parent’s net income (as determined by the guidelines) and for the correct number
of children. Multiply the parent’s gross income by the percentage in that cell. If
the amount is equal to or more than the cost of the child’s portion of the health
insurance premium (family cost minus single cost), it is available at “reasonable
cost”. For minimum orders (net incomes 0 – 850), “reasonable cost” is zero or no
cost.

      ORDERS: Every order must address health insurance or cash medical
support. It makes no difference if neither is ordered; the order must still address
same. See 252E.1A(1)
       Low-Income/CSRU Services: If the NCP is low-income and support is zero
or a minimum order and the child support recovery unit is providing services
under chapter 252B, the court must order the parent to provide a health benefit
plan when a plan becomes available. Section 252E.1A(7)(d).


What is health insurance? The federal regulations define health insurance to
include fee for service, health maintenance organization, preferred provider
organization and other types of coverage which is available to either parent
under which medical services could be provided to the dependent children.
45 CFR 303.31 (a)(2).

      The Iowa code defines health benefit plan using words "any policy.” Med
      support is defined to "meet needs of a dependent". See 252E.1 (7) and
      (9).

      252E.1A(2) The court shall order as medical support for the child a health
      benefit plan is available to either parent. A plan is available if the plan is
      accessible and the cost of the plan is reasonable

             Accessible means that the health services are provided at
             reasonable times and locations. A parent in Cedar Rapids should
             not have to drive the child to Davenport for health care. Contact the
             provider and ask what restrictions exist on who, what, when and
             where.

             Cost is Reasonable.

             a) You need to know what it will cost to cover the child.
             Family plan cost – Single plan cost = Cost to Cover Child

             b) You need to know the parent’s gross and net income. Once you
             know the parent’s net income, you apply the net to the “Medical
             Support Table” found at 9.12(4) as to the number of children in
             issue. This will provide you with the percentage of the parent’s
             gross income.

             If the cost to cover the child is equal to or less than the number
             produced, then the cost is reasonable.

             Example:
                 2 children in issue.
                 Family plan cost is currently $250 per month. The single plan
                  is $150 per month. The cost of covering the children is $100
                  per month or $1,200 per year.
                    The parent has a gross income of $27,000 per year. Their
                     net income is $1,800 per month.

              Using the table at 9.12(4), net income of $1,800 – 2 children shows
              4%.

              $27,000 X 4% = $1,080

              The cost of the health insurance is $1,200 per year. The cost of the
              health insurance exceeds the $1,080 reasonable amount limit,
              therefore, the cost is NOT reasonable and the parent may not be
              ordered to carry the coverage.

              If coverage is not ordered, the NCP will be required to pay cash
              medical support of $1,080 (note this is the amount calculated as the
              cap on cost of health insurance).


       Issue: A parent wishes to provide health insurance even though the cost is
not reasonable.

       Under 252E.1(A)(2)(a)(2), the court may order the unreasonable plan if
the parent consents or does not object to entry of that order.

      Negotiate a deal whereby the insurance is provided with the obligor
      receiving credit for the excess cost. Consider:
                  CP will have an uncovered obligation minimum of $250 per
                    child. Perhaps increase this threshold by some amount to
                    account for excess cost of the health plan.
                  Reduce the support obligation by some amount.

             Run the numbers using $1,080 as the cost of the health insurance,
              even though the actual cost is $1,200.
             Run the numbers using $1,200 as the cost of the health insurance.
             Run the numbers using no entry for health insurance (this will result
              in a calculation of cash medical support).

      Compare your results and be mindful of the consequences:
               If there is no health insurance on the child
                    o Cash Medical Support
                    o Uncovered medical expenses
                    o Are kids eligible for Title XIX or Hawk-I
               If there is health insurance on the child
                    o Uncovered medical expenses.
               NCP pays cash medical support
                    o How it may be used.
                                  Court may fashion the order to require that
                                   these funds be applied as “uncovered
                                   medical expenses.”
                                  If Title XIX, money goes to Iowa.
                                  If Hawk-I, money goes to CP.
                                  Court may direct CP to acquire health
                                  insurance.


Low Income Cheat Sheet

        Approximate NCP Low Income Thresholds Cheat Sheet – Net Income
          1 child - less than $1,551 per month (Gross $24,370 per year)
          2 - less than $2,001 per month ($30,230 year, each claim 1)
          3 - less than $2,251 per month ($32,570 year, NCP 2, CP 1)
          4 - less than $2,301 per month ($33,420 ear, each claim 2)
          5 or more - less than $2,351 per month.



        Split Care Calculations. In split care cases, 2 separate calculations must
        be run [Rule 9.14(4)] and in those calculations only 50% of the health
        insurance premium is used in each calculation under Rule 9.14(5)(d).

V.      Cash Medical Support:

        9.12(3) If neither parent has health insurance available at “reasonable
cost”, if appropriate according to Iowa Code section 252E.1A, the court shall
order cash medical support. Refer to the table in rule 9.12(4) to determine the
amount of cash medical support. Find the appropriate cell for the parent’s
preliminary net income (gross income minus all appropriate deductions other
than cash medical support in the pending matter) and for the correct number of
children. Multiply the parent’s gross income by the percentage in that cell to get
the cash medical support amount. For minimum orders (net incomes 0 – 850),
cash medical support is not ordered.

      Use the adjusted net income (preliminary net income minus the amount of
cash medical support in the pending matter) for the correct number of children on
the Schedule of Basic Support Obligations to find the appropriate amount of child
support. Once the adjusted net income has been determined, do not allow
another deduction for cash medical support.

       Notes:
      Cash medical support is always paid by the NCP to the CP. See
       252E.1A(3) which provides that cash medical support only applies to “the
       parent [singular] ordered to provide the monetary amount…” The
          exception might be in a case of shared care cases both parents could be
          assessed a cash medical support obligation if no health insurance is
          ordered. Iowa Support Master will provide you with these calculations.
          Look at the Analysis Page.
         This is an “add-on.”
         If CP has the children covered under Title XIX,this money will most likely
          be assigned to the state.
         If the children are covered under Hawk-I, this money will most likely go to
          the CP.
         It is in addition to Rule 9.12(5) Uncovered Expenses.
         Would it be cheaper to buy a health plan?
         Can change as the number of children changes.
         See the Analysis Page.
         Offset against Uncovered Medical Expenses Contribution.

Why not look for a plan?

       A.     The Wellmark “budget” plan is $34 per child. Limit of 3 doctor visits
per year per child with $30 co-pay. 4th visit and thereafter is subject to the
deductible of $3,000 per person per year. After meeting the deductible, there is a
25% maximum out of pocket to $5,000. Generic drugs are covered, brand name
are not. You will pay $8 or 25% of the cost of the generic drug, whichever
greater.
       B.     The middle-of-the-road plan is called “Enhanced 2500.” Cost
is $59 per child. The plan has a $2,500 deductible. No limit on office visits. You
must pay 20% per office visit. There is emergency room co-pay $150.00. Generic
and brand name drugs covered. It is a semi-complicated tier plan on the generic
and brand name drugs. Major hospital has a deductible of 20% and with a
maximum out of pocket of $3,500 per person.

VI.       9.12(5) “Uncovered medical expenses”

Means all medical expenses for the child not paid by insurance. The custodial
parent shall pay the first $250 per year per child of uncovered medical expenses
up to a maximum of $800 per year for all children. Uncovered medical expenses
in excess of $250 per child or a maximum of $800 per year for all children shall
be paid by the parents in proportion to their respective net incomes. “Medical
expenses” shall include, but not be limited to, costs for reasonably necessary
medical, orthodontia, dental treatment, physical therapy, eye care, including eye
glasses or contact lenses, mental health treatment, substance abuse treatment,
prescription drugs, and any other uncovered medical expense. Uncovered
medical expenses are not to be deducted in arriving at net income. (Formerly
$500).
VII.    Income

       9.5(10) …To determine gross income, the court shall not impute income
under rule 9.11 except: (a) pursuant to agreement of the parties, or (b) upon
request of a party, and a written determination is made by the court under Rule
9.11. (Variance).

       9.11(4) The court shall not use earning capacity rather than actual
earnings unless a written determination is made that, if actual earnings were
used, substantial injustice would occur or adjustments would be necessary to
provide for the needs of the child or to do justice between the parties.

The median income in Iowa for 2008: $49,007
2008 Median Earnings
Male full-time, year-round workers: $41,677
Female full-time, year-round workers: $31,903
(Two Internet Sources)

       Median income is the amount which divides the income distribution into
two equal groups, half having income above that amount, and half having income
below that amount. Mean income (average) is the amount obtained by dividing
the total aggregate income of a group by the number of units in that group. The
means and medians for households and families are based on all households
and families. Means and medians for people are based on people 15 years old
and over with income.
       (Source: http://en.wikipedia.org/wiki/Median_household_income

Average starting salary:
Teacher: $31,753
Police Officer: $46,000
Social Worker: $47,000

VIII.   Forms – including Income Withholding Order/State Statistical Report

IX.     Selected Case Scenarios.

        A.     The Notch.

        B.     Welfare Problem: While neither parent may be on welfare at the
        time of the resolution of the case, if a parent goes on it, the party with the
        obligation may be in for a surprise.

        Example: Shared Physical Care case, 2 kids. Decree says if Dad has
        custody, Mom pays $200 per month. Decree says if mom has custody,
        Dad would pay her $400 per month.Dad paying $200 per month on the
offset.

Change of plans, Mom goes on welfare. To be able to get welfare, mom
must assign child support to the state. State reads the decree and they
remove the offset and now want dad to pay the full $400 per month. The
State’s motion to remove the offset is appropriate because mom has
assigned her interest to the state.

Dad now pays full child support as if he did not have the kids to begin with.
He gets no credit for the time he has the kids in shared custody. The State
really wants $426 as that is what mom would be paid via welfare for 2
kids.

Assume dad loses his job. Dad has the kids half the time. If dad wants, he
can apply for welfare. Dad will be denied because mom is drawing the full
$426 per month. The administrative regulations do not discuss what to do
in shared custody. Dad may get food stamps.

Suggestions:

          1.     The Iowa administrative rules need to be amended to reflect
          that a parent should only be able to receive half the welfare benefits
          in shared custody cases.

          2.      You may want to include a provision in the Decree that if a
          party goes on welfare that this amounts to such a change that the
          other financial provisions of the decree are to be amended like
          buying clothing, school supplies, etc.


C.        Filing Status in Split Custody/Shared Care Cases

      If shared care, an unmarried parent shall be assigned head of
household. A married parent shall be assigned married filing separate.
Rule 9.6(3)

          Split custody?

          One child, who claims the child? Alternate?

      No health insurance, 9.12(5) – who pays what in uncovered
medical. Who wants to be custodial parent? Minimums apply. Put in the
decree the percentage shares of the parents and that they will pay the
same percentage share of non-covered.

          Ask the court to address how the cash medical may be applied.
X.    How to override certain entries in Iowa Support Master.

       Below is a screenshot of the calculation overrides feature of the software.
In the example below, I am showing you what you can do to override the cash
medical support calculation. This you would do, for example, when one of the
parents has the child covered under a health plan at no charge to that parent.
XI.   How to enter pre-tax health insurance in Iowa Support Master.

       You have a party who is paid $48,000 gross per year. Her employer
provides a health insurance plan paid with pre-tax dollars. The cost of the health
plan is $300.00 per month for a family plan for a total of $3,600 per year of pre-
tax income.

      See the image below.




What do you do about that portion that it costs to cover Johnny? Leave the
entries as they are then enter the cost to cover Johnny.
252E.1A ESTABLISHING AND MODIFYING ORDERS FOR MEDICAL SUPPORT.
This section shall apply to all initial or modified orders for support entered under chapter 234, 252A, 252C, 252F, 252H, 598, 600B,
or any other applicable chapter.


1. An order or judgment that provides for temporary or permanent support for a child
shall include a provision for medical support for the child as provided in this section.

2. The court shall order as medical support for the child a health benefit plan if
available to either parent at the time the order is entered or modified. A plan is
available if the plan is accessible and the cost of the plan is reasonable.

     a. The cost of a health benefit plan is considered reasonable, and such
amount shall be stated in the order, if one of the following applies:

       (1) The premium cost for a child to the parent ordered to provide the plan
does not exceed five percent of that parent's gross income.

       (2) The premium cost for a child exceeds five percent of the gross income of
the parent ordered to provide the plan and that parent consents or does not object
to entry of that order.

      b. For purposes of this section, "gross income" has the same meaning as gross
income for calculation of support under the guidelines established under section 598.21B.

        c. For purposes of this section, the premium cost for a child to the parent ordered
to provide the plan means the amount of the premium cost for family coverage to the
parent which is in excess of the premium cost for single coverage, regardless of the
number of individuals covered under the plan. However, this paragraph shall not be
interpreted to reduce the amount of the health insurance premium deduction a parent may
be entitled to when calculating the amount of a child support obligation under Iowa court
rule 9.5 of the child support guidelines.

3. If a health benefit plan is not available at the time of the entry of the order, the court
shall order a reasonable monetary amount in lieu of a health benefit plan, which amount
shall be stated in the order. For purposes of this subsection, a reasonable amount means
five percent of the gross income of the parent ordered to provide the monetary amount for
medical support. This subsection shall not apply in any of the following circumstances:

       a. If the parent's monthly support obligation established pursuant to the child
support guidelines prescribed by the supreme court pursuant to section 598.21B is the
minimum obligation amount.

           b. If subsection 7, paragraph "e" applies.

4. If the court orders the custodial parent to provide a health benefit plan under
subsection 2, the court may also order the noncustodial parent to provide a
reasonable monetary amount in lieu of a health benefit plan. For purposes of this
subsection, a reasonable monetary amount means an amount not to exceed the lesser
of a reasonable amount as described in subsection 3, or the premium cost of
coverage for the child to the custodial parent as described in subsection 2,
paragraph "c".

5. Notwithstanding the requirements of this section, the court may order provisions in the
alternative to those provided in this section to address the health care needs of the child if
the court determines that extreme circumstances so require and documents the court's
written findings in the order.

6. An order, decree, or judgment entered before March 1, 2008, that provides for the
support of a child may be modified in accordance with this section.

7. If the child support recovery unit is providing services under chapter 252B and
initiating an action to establish or modify support, all the following shall also apply:

       a. If a health benefit plan is available as described in subsection 2 to the
noncustodial parent, the unit shall seek an order for the noncustodial parent to provide the
plan.

        b. If a health benefit plan is available as described in subsection 2 to the custodial
parent and not to the noncustodial parent, the unit shall seek an order for the custodial
parent to provide the plan.

        c. If a health benefit plan is available as described in subsection 2 to each parent,
and if there is an order for joint physical care, the unit shall seek an order for the parent
currently ordered to provide a health benefit plan to provide the plan. If there is no
current order for a health benefit plan for the child, the unit shall seek an order for the
parent who is currently providing a health benefit plan to provide the plan.

        d. If a health benefit plan is not available, and the noncustodial parent does not
have income which may be subject to income withholding for collection of a reasona ble
monetary amount in lieu of a health benefit plan at the time of the entry of the order, the
unit shall seek an order that the noncustodial parent provide a health benefit plan when a
plan becomes available at reasonable cost, and the order shall specify the amount of
reasonable cost as defined in subsection 2.

       e. This section shall not apply to chapter 252H, subchapter IV.

				
DOCUMENT INFO