Changes to the 2017 Child Support Formula Including How to Treat a Parent that has No Income

The Michigan Child Support Manual has undergone a significant modification in 2017, which encompasses major changes since the 2013 edition.  The following are some of the areas that have undergone significant modification.

A. INCOME

Numerous changes, some minor and some significant have occurred in different areas, either in including or removing items from income. For example, employer contributions to retirement plans are no longer considered income and employee contributions to retirement plans are no longer subtracted from income.  Previously, employer contributions were income and employee contributions were deducted, so long as they were less than 5% of the payer’s gross income.  There have also been some adjustments as to what can be deducted, or what deductions are permitted for self-employed individuals and business owners. The changes generally reduce some of those deductions, particularly in the area of depreciation.

B. HEALTHCARE

There is a new deduction for a parent’s cost for mandatory health care coverage.  There is a new amount per child for the ordinary medical amount.  This has been increased from $357.00 to $405.00 per year, per child.  This, then, would increase the amount of uninsured medical expense that is the responsibility of the parent receiving child support and is otherwise responsible for the child’s medical care.  The definition of reasonable cost where an order requires a parent to provide medical insurance at a reasonable cost when available through his or her employer has increased from 5% to 6%.  There is more detailed information about how this cost is to be determined.

C. PARENT WITH NO INCOME – IMPUTATION OF INCOME

The child support formula includes answers to the question of how to deal with a parent who has no income.  Since the guidelines are driven largely by the income levels of the parents, there is a rule requiring that the Court in implementing the guidelines, may assign the non-earning parent an income based on numerous factors.  Simply stated, the fact that someone is earning nothing does not necessarily mean that a zero is plugged into the child support guideline calculation to determine the appropriate level of child support.  This imputing of income, as it is called, is basically a concept that allows the Court, to pretend that a parent has income when it is demonstrated to the Court that the parent is voluntarily unemployed or underemployed or has an unexercised ability to earn.  In the new version of the child support guidelines, there have been some changes in how the level of a non-income earning parent’s imputed income should be determined.  The new factors include taking into consideration the personal circumstances of the parent to whom income is being imputed, which is now to include an evaluation of life situations such as criminal record, ability to drive, access to transportation, etc.  Income includes the potential income that parent could earn subject to that parent’s actual ability to earn.  If your personal circumstances suggest this is part of what needs to be discussed, you should contact an attorney to assist you in determining what imputation of income is appropriate in your case.  Some of these factors were not previously considered but are part of the new Michigan Child Support Formula manual, which now contains clarification of the law dealing with imputing income.

D. OTHER MATTERS

As occurs every year, the child support calculation is modified in some small ways, but the modifications for 2017 are far more significant.

The Michigan Child Support Formula manual is available through the Friend of the Court bureau at the following link:

http://courts.mi.gov/Administration/SCAO/OfficesPrograms/FOC/Pages/Child-Support-Formula.aspx

Should you have questions about changes to the 2017 Child Support Formula and wish to discuss how they may impact your situation, please contact the law firm of Damon, Ver Merris, Boyko & Witte, PLC to speak to one of our Grand Rapids Divorce Attorneys.  We are here to help. – Curtis R. Witte / March 1, 2017