Child Support and High-Income Earners

Child Support and High-Income Earners

Child Support is Based on Net Monthly Income

In Texas, child support is calculated based on the payor’s (or obligor’s) net monthly income. The Texas Family Code states that net income is to be calculated by “subtracting from gross income social security taxes and federal income tax withholding for a single personal claiming one personal exemption.” Tex. Fam. Code §154.061(b). This means that simply attempting to calculate one’s child support obligation based on his or her take home pay is a mistake. Payments for monthly health insurance premiums, 401(k) contributions, and other payroll deductions not specified in the family code will be included for purposes of calculating one’s net monthly income. In addition to wages and salary, rental income, retirement and annuity income, disability, unemployment, and gifts are all considered income for purposes of calculating child support.

The Office of the Attorney General publishes tax charts each year to assist in determining net monthly income.

Applying the Child Support Guidelines

Once the obligor’s net monthly income is determined, the guideline child support percentage will be used to calculate the amount of child support owed each month. Those percentages are as follows:

1 child = 20%
2 children = 25%
3 children = 30%
4 children = 35%
5 children = 40%
6 or more children = not less than the amount for 5 children

The guidelines will be adjusted if the obligor has other children that are not before the court (for example, children from a previous relationship). Those percentages can be found here. The other parent’s income (or the other parent’s spouse’s income) has no impact on the child support calculation.

Income Cap on Max Child Support

If the obligor’s net monthly income exceeds $9,200 per month, the amount of monthly child support will be calculated as if the obligor only earns $9,200 per month. There is a cap on the maximum amount of guideline child support. Based on the percentages above, this means that obligors who earn $9,200 per month or more will pay: $1,840 per month for 1 child; $2,300 per month for 2 children; $2,760 per month for 3 children; $3,220 per month for 4 children; and $3,680 per month for 5 or more children.

Child Support Guidelines are Presumed Reasonable

Calculating child support according to the guidelines is presumed to be reasonable and in the best interest of the child(ren). Placing a cap on support may seem unfair when dealing with very high income earners, such as CEOs, executives and athletes. On rare occasions, a court may deviate from guidelines if it determines that guideline support would be “unjust or inappropriate.” Tex. Fam. Code §154.122. The Court can consider (among other things) the needs of the child, the periods of possession of the child by each parent, extraordinary educational or health care expenses for the child; or any travel expenses that must be paid in order to exercise possession periods. Tex. Fam. Code §154.123.

It’s best to keep in mind that child support is meant to support the needs of the child, not to maintain a certain lifestyle for the other parent. However, these two concepts are not mutually exclusive, as it is often in the child’s best interest for both parents to maintain a safe and comfortable living environment for the children. Requesting child support in excess of (or below) the guidelines is rare but not unheard of. If a Court is unlikely to deviate from the guidelines, there are other ways to seek additional support. However, absent an agreement or exceptional circumstances, the guideline support model will likely prevail.

Parents Can Agree to Deviate from the Guidelines

The parties can always agree to deviate from child support guidelines, whether above or below. If there is an agreement to deviate from guideline support, the parties should consider attending mediation and solidifying the agreement in a binding Mediated Settlement Agreement (MSA). A Court may reject an order that deviates from guideline support but is required to accept the order it is the result of a binding MSA.

Spousal Maintenance to Help with a Disabled Child

In Texas, spousal maintenance is generally not awarded unless the spouses have been married for at least ten years. An exception to this requirement is if the spouse requesting maintenance is the custodian of a child of the marriage who “requires substantial care and personal supervision because of a physical or mental disability that prevents the spouse from earning sufficient income to provide for the spouse’s minimum reasonable needs.” Tex. Fam. Code §8.051. To qualify for spousal maintenance under this section, the child of the marriage can be of any age.

Support for an Adult Disabled Child

A typical child support obligation ends when the child is eighteen years of age AND graduated from high school. A Court may order child support beyond that if a child requires “substantial care and personal supervision because of a mental or physical disability and will not be capable of self-support.” Tex. Fam. Code §154.302. The disability or cause of the disability must be known before the child’s eighteenth birthday.

No Control Over How Child Support is Spent

Most obligors have no objection to supporting his or her child but take issue with paying the funds directly to the child’s other parent due to fears that the funds will not be spent responsibly. If the child’s needs are being met a Court will likely not care how else the funds are being allocated. However, creative agreements can be made at mediation if this is a concern. For example, an obligor can offer to pay daycare expenses directly to the daycare facility in exchange for reduced guideline support. If the other party insists on guideline support, he or she will likely succeed.

How 50/50 Possession Affects Child Support

Many parents these days are moving from a standard visitation schedule to more of a 50/50 possession schedule. In these instances, there is no set standard for child support. An option is to calculate each parent’s Child support obligation to the other based on income and then the higher earner’s obligation is reduced or offset by the amount the lower earner would have paid. For example, if the higher earning parent would pay $2,000 per month and the lower earner would pay $1,500 per month, the higher earner pays $500 to equalize the amount. Sometimes, there is an agreement that no child support is paid, or that standard guideline support will be paid by the higher earner even if he or she has the children half the time.

The Custodial Parent Can Pay Child Support

In November 2019, the Dallas Court of Appeals upheld a trial court’s decision requiring the primary (or custodial) parent to pay child support to the non-primary parent. In re: A.R.W., Tex App – Dal, 2019 WL 6317870. Texas law requires parents to support their children. The court found that the child would have a better standard of living at both houses if the higher earning parent paid support to the other. The higher earner also had the child more time than the other. If other courts around the state follow suit, it will make for some very interesting changes in the child support arena.

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