Child Support Guidelines Commentary:
Section 50-13.4 of the North Carolina General Statutes requires the Conference of Chief District Judges to prescribe uniform statewide presumptive guidelines for determining the child support obligations parents, and to review the guidelines periodically (at least once every four years) to determine whether their application results in appropriate child support orders.
These revised guidelines are the product of the ongoing review process conducted by the Conference of Chief District Judges. The Conference conducted a public hearing to provide interested citizens an opportunity to comment on the guidelines and also considered written comments from agencies, attorneys, judges and members of the public.
Applicability and Deviation
North Carolina’s child support guidelines apply as a rebuttable presumption in all legal proceedings involving the child support obligation of a parent (including orders entered in criminal and juvenile proceedings, orders entered in UIFSA proceedings, and voluntary support agreements and consent orders approved by the court.) The guidelines do not apply to orders for “prior maintenance” (reimbursement of child-related expenses incurred prior to the date an action for child support is filed) or child support orders entered against stepparents or other persons or agencies who are secondarily liable for child support.
The guidelines must be used when the court enters a temporary or permanent child support order in a non-contested case or a contested hearing.
The court upon its own motion or upon motion of a party may deviate from the guidelines if, after hearing evidence and making findings regarding the reasonable needs of the child for support and the relative ability of each parent to provide support, it finds by the greater weight of the evidence that application of the guidelines would not meet, or would exceed, the reasonable needs of the child considering the relative ability of each parent to provide support, or would otherwise be unjust or inappropriate. If the court deviates from the guidelines, the court must make written findings (1) stating the amount of the supporting parent’s presumptive child support obligation determined pursuant to these guidelines; (2) determining the reasonable needs of the child and the relative ability of each parent to provide support; (3) supporting the court’s conclusion that the presumptive amount of child support determined under the guidelines is inadequate or excessive or that application of the guidelines is otherwise unjust or inappropriate; and (4) stating the basis on which the court determined the amount of child support ordered. (One example of a reason to deviate may be when one parent pays 100% of the child support obligation and 100% of the insurance premium.)
The guidelines are intended to provide adequate awards of child support that are equitable to the child and both of the child’s parents. When the court does not deviate from the guidelines, an order for child support in an amount determined pursuant to the guidelines is conclusively presumed to meet the reasonable needs of a child considering the relative ability of each parent to provide support, and specific findings regarding a child’s reasonable needs or the relative ability of each parent to provide support are therefore not required.
Regardless of whether the court deviates from the guidelines or enters a child support order pursuant to the guidelines, the court should consider incorporating in, or attaching to, its order, or including in the case file, the child support worksheet it uses to determine the supporting parent’s presumptive child support obligation under the guidelines.
Self-Support Reserve; Obligors With Low Incomes
he Guidelines include a self-support reserve that ensures that obligors have sufficient income to maintain a minimum standard of living based on the 2002 federal poverty level for one person ($738.00 net per month). For obligors with an adjusted gross income of less than $800, the Guidelines require, absent a deviation, the establishment of a minimum support order ($50). For obligors with adjusted gross incomes above $800, the Schedule of Basic Support Obligations incorporates a further adjustment to maintain the self-support reserve for the obligor.
If the obligor’s adjusted gross income falls within the shaded area of the Schedule and Worksheet A is used, the basic child support obligation and the obligor’s total child support obligation are computed using only the obligor’s income. In these cases, childcare and health insurance premiums should not be used to calculate the child support obligation. However, payment of these costs by either parent may be a basis for deviation. This approach prevents disproportionate increases in the child support obligation with moderate increases in income and protects the integrity of the self-support reserve. In all other cases, the basic child support obligation is computed using the combined adjusted gross incomes of both parents.
Determination of Support In Cases Involving High Combined Incomes
n cases in which the parents’ combined adjusted gross income is more than $25,000 per month ($300,000 per year), the supporting parent’s basic child support obligation cannot be determined by using the child support schedule.
In cases in which the parents’ combined income is above $25,000 per month, the court should, on a case by case basis, consider the reasonable needs of the children and the relative ability of each parent to provide support. The schedule of basic child support may be of assistance to the court in determining a minimal level of child support.
Assumptions and Expenses Included In Schedule of Basic Child Support Obligations
North Carolina’s child support guidelines are based on the “income shares” model, which was developed under the Child Support Guidelines Project funded by the U.S. Office of Child Support Enforcement and administered by the National Center for State Courts. The income shares model is based on the concept that child support is a shared parental obligation and that a child should receive the same proportion of parental income he or she would have received if the child’s parents lived together. The schedule of basic child support obligations is based primarily on economic research performed pursuant to the Family Support Act of 1988 [P.L. 100-485, § 128], which required the U.S. Department of Health and Human Services to conduct a study of the patterns of expenditures on children. The schedule has been updated based on changes in the consumer price index, changes in federal and state tax rates, and other date.
The child support schedule that is a part of the guidelines is based on economic data which represent adjusted estimates of average total household spending for children between birth and age 18, excluding child care, health insurance, and health care costs in excess of $100 per year. Expenses incurred in the exercise of visitation are not factored into the schedule.
The schedule assumes that the parent who receives child support claims the tax exemptions for the child. If the parent who receives child support has minimal or no income tax liability, the court may consider requiring the custodial parent to assign the exemption to the supporting parent and deviate from the guidelines.
The Schedule of Basic Child Support Obligations is based upon net income converted to gross annual income by incorporating the federal tax rates, North Carolina tax rates and FICA. Gross income is income before deductions for federal or state income taxes, Social Security or Medicare taxes, health insurance premiums, retirement contributions, or other amounts withheld from income.
(1) Gross income: “Income” means a parent’s actual gross income from any source, including but not limited to income from employment or self-employment (salaries, wages, commissions, bonuses, dividends, severance pay, etc.), ownership or operation of a business, partnership, or corporation, rental of property, retirement or pensions, interest, trusts, annuities, capital gains, social security benefits, workers compensation benefits, unemployment insurance benefits, disability pay and insurance benefits, gifts, prizes and alimony or maintenance received from persons other than the parties to the instant action. When income is received on an irregular, non-recurring, or one-time basis, the court may average or prorate the income over a specified period of time or require an obligor to pay as child support a percentage of his or her non-recurring income that is equivalent to the percentage of his or her recurring income paid for child support.
Specifically excluded are benefits received from means-tested public assistance programs, including but not limited to Temporary Assistance to Needy Families (TANF), Supplemental Security Income (SSI), Food Stamps and General Assistance.
Social security benefits received for the benefit of a child as a result of the disability or retirement of either parent are included as income attributed to the parent on whose earnings record the benefits are paid, but are deducted from that parent’s child support obligations.
Except as otherwise provided, income does not include the income of a person who is not a parent of a child for whom support is being determined regardless of whether that person is married to or lives with the child’s parent or has physical custody of the child.
(2) Income from self-employment or operation of a businses: Gross income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation, is defined as gross receipts minus ordinary and necessary expenses required for self-employment or business operation. Ordinary and necessary business expenses do not include amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expenses, investment tax credits, or any other business expenses determined by the court to be inappropriate for determining gross income. In general, income and expenses from self-employment or operation of a business should be carefully reviewed to determine an appropriate level of gross income available to the parent to satisfy a child support obligation. In most cases, this amount will differ from a determination of business income for tax purposes.
Expense reimbursements or in-kind payments (for example, use of a company car, free housing, or reimbursed meals) received by a parent in the course of employment, self-employment, or operation of a business are counted as income if they are significant and reduce personal living expenses.
(3) Potential or Imputed Income: If either parent is voluntarily unemployed or underemployed to the extent that the parent cannot provide a minimum level of support for himself or herself and his or her children when he or she is physically and mentally capable of doing so, and the court finds that the parent’s voluntary unemployment or underemployment is the result of a parent’s bad faith or deliberate suppression of income to avoid or minimize his or her child support obligation, child support may be calculated based on the parent’s potential, rather than actual, income. Potential income may not be imputed to a parent who is physically or mentally incapacitated or is caring for a child who is under the age of three years and for whom child support is being determined.
The amount of potential income imputed to a parent must be based on the parent’s employment potential and probable earnings level based on the parent’s recent work history, occupational qualifications and prevailing job opportunities and earning levels in the community. If the parent has no recent work history or vocational training, potential income should not be less than the minimum hourly wage for a 40-hour work week.
(4) Income Verification: Child support calculations under the guidelines are based on the parents’ current incomes at the time the order is entered. Income statements of the parents should be verified through documentation of both current and past income. Suitable documentation of current earnings (at least one full month) includes pay stubs, employer statements, or business receipts and expenses, if self-employed. Documentation of current income must be supplemented with copies of the most recent tax return to provide verification of earnings over a longer period. Sanctions may be imposed for failure to comply with this provision on the motion of a party or by the court on its own motion.
Pre-existing Child Support Obligations and Responsibility
for Other Children
Child support payments actually made by a parent under any pre-existing court order, separation agreement or voluntary support arrangement are deducted from the parent’s gross income. The court may consider a voluntary support arrangement as a pre-existing child support obligation when the supporting parent has consistently paid child support for a reasonable and extended period of time. A pre-existing support order is one that is in effect at the time a child support order in the pending action is entered or modified, regardless of whether the child or children for whom support is being paid were born before or after the child or children for whom support is being determined. Actual payments of alimony should not be considered as a deduction from gross income but may be considered as a factor to vary from the final presumptive child support obligation.
A parent’s financial responsibility for his or her natural or adopted children who currently reside with the parent (other than children for whom child support is being determined in the pending action) is deducted from the parent’s gross income. Use of this deduction is appropriate when a child support order is entered or modified, but may not be the sole basis for modifying an existing order.
A parent’s financial responsibility for his or her natural or adopted children who currently reside with the parent (other than children for whom child support is being determined in the pending action) is (a) equal to the basic child support obligation for these children based on the parent’s income if the other parent of these children does not live with the parent and children; (b) one-half of the basic child support obligation for these children based on the combined incomes of both of the parents of these children if the other parent of these children lives with the parent and children.
Basic Child Support Obligation
The basic child support obligation is determined using the North Carolina Schedule of Basic Child Support Obligations. For combined monthly adjusted gross income amounts falling between amounts shown in the schedule, the basic child support obligation should be interpolated.
The number of children refers to children for whom the parents share joint legal responsibility and for whom support is being sought.
Child Care Costs
Reasonable child care costs that are, or will be, paid by a parent due to employment or job search are added to the basic child support obligation and prorated between the parents based on their respective incomes.
When the gross monthly income of the parent paying child care costs falls below the amounts indicated below, 100% of child care costs are added.
1 child – $1,100
2 children – $1,500
3 children – $1,700
4 children – $1,900
5 children – $2,100
6 children – $2,300
At these income levels, the parent who pays child care costs does not benefit from the tax credit for child care. When the income of the parent who pays child care costs exceeds the amounts indicated above, only 75% of actual child care costs are added (because the parent is entitled to the income tax credit for child care expenses).
The amount that is, or will be, paid by a parent for health (medical, or medical and dental) insurance for the children for whom support is being determined is added to the basic child support obligation and prorated between the parents based on their respective incomes. Payments that are made by a parent’s employer for health insurance and are not deducted from the parent’s wages are not included. When a child for whom support is being determined is covered by a family policy, only the health insurance premium actually attributable to that child is added. If this amount is not available or cannot be verified, the total cost of the premium is divided by the total number of persons covered by the policy and then multiplied by the number of covered children for whom support is being determined.
The court may order that uninsured medical or dental expenses in excess of $250 per year or other uninsured health care costs (including reasonable and necessary costs related to orthodontia, dental care, asthma treatments, physical therapy, treatment of chronic health problems, and counseling or psychiatric therapy for diagnosed mental disorders) be paid by the parents in proportion to their respective incomes.
The court may order either parent to obtain and maintain health (medical or medical and dental) insurance coverage for a child if it is actually and currently available to the parent at a reasonable cost. Health insurance is considered reasonable in cost if it is employment related or other group health insurance, regardless of delivery mechanism. If health insurance is not actually and currently available to a parent at a reasonable cost at the time the court orders child support, the court may enter an order requiring the parent to obtain and maintain health insurance for a child if and when the parent has access to reasonably-priced health insurance for the child.
Other Extraordinary Expenses
Other extraordinary child-related expenses (including: (1.) expenses related to special or private elementary or secondary schools to meet a child’s particular educational needs, and (2.) expenses for transporting the child between the parents’ homes) may be added to the basic child support obligation and ordered paid by the parents in proportion to their respective incomes if the court determines the expenses are reasonable, necessary, and in the child’s best interest.
Child Support Worksheets
A parent’s presumptive child support obligation under the guidelines must be determined using one of the child support worksheets.
The child support worksheets must include the incomes of both parents, regardless of whether one parent is seeking child support from the other parent or a third party is seeking child support from one or both parents. The child support worksheets may not be used to calculate the child support obligation of a stepparent or other party who is secondarily liable for child support. Do not include the income of an individual who is not the parent of a child for whom support is being determined on the worksheets.
Use Worksheet A when one parent (or third party) has primary physical custody of all of the children for whom support is being determined. A parent (or third party) has primary physical custody of a child if the child lives with that parent (or custodian) for at least 242 nights during the year. Primary physical custody is determined without regard to whether a parent has primary, shared, or join legal custody of a child. Do not use Worksheet A when (1) a parent has primary custody of one or more children and the parents share custody of one ore more children [instead, use Worksheet B] or (b) when primary custody of two or more children is split between the parents [instead, use Worksheet C]. In child support cases involving primary physical custody, a child support obligation is calculated for both parents but the court enters an order requiring the parent who does not have primary physical custody of the child to pay child support to the parent or other party who has primary physical custody of the child.
Use Worksheet B when (a) the parents share custody of all of the children for whom support is being determined, or (b) when one parent has primary physical custody of one or more of the children and the parents share custody of another child. Parents share custody of a child if the child lives with each parent for at least 123 nights during the year and each parent assumes financial responsibility for the child’s expenses during the time the child lives with that parent. A parent does not have shared custody of a child when that parent has visitation rights that allow the child to spend less than 124 nights per year with the parent and the other parent has primary physical custody of the child. Shared custody is determined without regard to whether a parent has primary, shared, or joint legal custody of a child. Do not apply the self-sufficiency reserve incorporated into the shaded area of the schedule when using Worksheet B.
In cases involving shared custody, the parents’ combined basic support obligation is increased by 50% (multiplied by 1.5) and is allocated between the parents based on their respective incomes and the amount of time the children live with the other parent. The adjustment based on the amount of time the children live with the other parent is calculated for all of the children regardless of whether a parent has primary, shared, or split custody of a child. After child support obligations are calculated for both parents, the parent with the higher child support obligation is ordered to pay the difference between his or her presumptive child support obligation and the other parent’s presumptive child support obligation.
Use Worksheet C when primary physical custody of two or more children is split between the parents. Split custody refers to cases in which one parent has primary custody of at least one of the children for whom support is being determined and the other parent has primary custody of the other child or children. Do not use Worksheet C when the parents share custody of one or more of the children and have primary physical custody or split custody of another child [instead, use Worksheet B]. The parents’ combined basic support obligation is allocated between the parents based on their respective incomes and the number of children living with each parent. After child support obligations are calculated for both parents, the parent with the higher child support obligation is ordered to pay the difference between his or her presumptive child support obligation and the other parent’s presumptive child support obligation. Do not apply the self-sufficiency reserve incorporated into the shaded area of the schedule when using Worksheet C.
In a proceeding to modify an existing order that is three years old or older, a difference of 15% or more between the amount of the existing order and the amount of child support resulting from application of the Guidelines based on the parents’ current incomes and circumstances shall be presumed to constitute a substantial change of circumstances warranting modification. If the order is less than three years old, this presumption does not apply.