THE COURTS

 (iii) [In the event that the combined amount the parents are required to pay exceeds the cost of placement, the trier-of-fact shall deviate the support amount downward to reduce each parent's obligation in proportion to his or her share of the combined obligation.] If the basic child support obligation exceeds the placement's cost, the trier-of-fact shall:

 (A) deviate the basic child support obligation downward; and

 (b) Support [Amount] Obligation. The support [amount] obligation (child support, spousal support, or alimony pendente lite) awarded pursuant to the Pa.R.C.P. Nos. 1910.11 and 1910.12 procedures [must] shall be determined in accordance with the support guidelines, which consist of the guidelines expressed as the basic child support schedule in Pa.R.C.P. No. 1910.16-3, the Pa.R.C.P. No. 1910.16-4 formulas, and the operation of the support guidelines as set forth in these rules.

Rule 1910.16-2. Support Guidelines. Calculation of Monthly Net Income.

 Generally, the [support amount awarded] the basic child support, spousal support, or alimony pendente lite obligation is based on the parties' monthly net [income] incomes.

 (a) Monthly Gross Income. Monthly gross income is ordinarily based on at least a six-month average of a party's income. The support law, 23 Pa.C.S. § 4302, defines the term ''income'' and includes income from any source. The statute lists many types of income including, but not limited to:

 (1) wages, salaries, bonuses, fees, and commissions;

 (2) net income from business or dealings in property;

 (3) interest, rents, royalties, and dividends;

 (4) pensions and all forms of retirement;

 (5) income from an interest in an estate or trust;

 (6) Social Security disability benefits, Social Security retirement benefits, temporary and permanent disability benefits, workers' compensation, and unemployment compensation;

 (7) alimony if, in the trier-of-fact's discretion, inclusion of part or all of it is appropriate; and

 Since the reasons for ordering payment of alimony vary, the appropriateness of including it in the recipient's gross income must also vary. For example, if the obligor is paying $1,000 per month in alimony for the express purpose of financing the obligee's college education, it would be inappropriate to consider that alimony as income from which the obligee could provide child support. However, if alimony is intended to finance the obligee's general living expenses, inclusion of the alimony as income is appropriate.

 (8) other entitlements to money or lump sum awards, without regard to source, including:

 (i) lottery winnings;

 (ii) income tax refunds;

 (iii) insurance compensation or settlements;

 (iv) awards and verdicts; and

 Official Note: The trier-of-fact determines the most appropriate method for imputing lump-sum awards as income for purposes of establishing or modifying the party's support obligation. These awards may be annualized or averaged over a shorter or longer period depending on the case's circumstances. The trier-of-fact may [order] require all or part of the lump sum award escrowed to secure the support obligation during that period.

 (III) determine the basic child support [amount] obligation set forth in the Pa.R.C.P. No. 1910.16-3 schedule; and

 (IV) apportion the basic child support [amount] obligation between the parties based on the party's percentage of the combined monthly net income.

 (E) In equally shared custody cases, the party with the higher monthly net income, excluding the child's benefit, is the obligor.

 [(ii) If a child is receiving Social Security derivative benefits due to a parent's death:

 (A) The trier-of-fact shall determine the surviving parent's basic child support amount as follows:

 (I) The non-parent obligee's monthly net income shall include only those funds the obligee is receiving on the child's behalf, including the Social Security derivative benefit.

 (II) If the surviving-parent obligor receives the Social Security derivative benefit, the benefit shall be added to the parent's monthly net income to calculate child support.]

 (ii) If a child is receiving Social Security derivative benefits due to a parent's death, the trier-of-fact shall determine the surviving parent's basic child support obligation as follows.

 (A) The non-parent obligee's monthly net income shall include only those funds the obligee is receiving on the child's behalf, including the Social Security derivative benefit.

 Example 2. Two children live with Grandmother who receives $800 per month in Social Security death benefits for the children as a result of Father's death. Grandmother also receives $500 per month from a trust established by Father for the benefit of the children. Grandmother is employed and earns $2,000 net per month. Grandmother seeks support from the children's mother, who earns $2,000 net per month. For purposes of calculating Mother's basic child support obligation, Grandmother's income will be $1,300, the amount she receives on the children's behalf [of the children] in Social Security derivative benefits and the trust income [from the trust]. (If Mother were receiving the benefit on the children's behalf [of the children it], the benefit would be added to [her income such that] Mother's monthly net income and would be $2,800 [and]. Grandmother's monthly net income would be $500.) Therefore, Mother's and Grandmother's combined monthly net [incomes total] income totals $3,300. The basic child support [amount] obligation at the $3,300 monthly net income level for two children is [$1,115] $1,137. As Mother's monthly net income of $2,000 is 61% of the parties' combined monthly net income of $3,300, [her portion of the] Mother's basic child support obligation is [$680] $694. Since Mother's retirement or disability did not generate the child's derivative benefit, the benefit amount is not subtracted from [her portion of the] Mother's basic child support [amount] obligation, and Mother owes Grandmother [$680] $694. If Grandmother was not receiving the children's derivative benefits or trust income [from the trust, her], Grandmother's monthly net income for purposes of calculating Mother's basic child support obligation would be zero, and Mother would pay 100% of the basic child support [amount] obligation because Grandmother has no duty to support the children.

 Official Note: Care must be taken to distinguish Social Security from Supplemental Security Income (SSI) benefits. Social Security benefits are income pursuant to subdivision (a) of this rule.

 (c) Monthly Net Income.

 (1) Unless these rules provide otherwise, the trier-of-fact shall deduct only the following items from monthly gross income to arrive at monthly net income:

 (i) federal, state, and local income taxes;

 (ii) unemployment compensation taxes and Local Services Taxes (LST);

 (iii) F.I.C.A. payments (Social Security, Medicare and Self-Employment taxes) and non-voluntary retirement payments;

 (i) deduct from the obligor's monthly net income child support, spousal support, alimony pendente lite, or alimony amounts paid to children and former spouses, who are not part of this action; and

 (ii) include in a party's monthly net income alimony pendente lite or alimony received from a former spouse that was not included in the party's gross income, as provided in subdivision (a).

 Official Note: Since the reasons for ordering payment of alimony vary, the appropriateness of including it in the recipient's monthly net income must also vary. For example, if the obligor is paying $1,000 per month in alimony for the express purpose of financing the obligee's college education, it would be inappropriate to consider that alimony as income from which the obligee could provide child support. However, if alimony is intended to finance the obligee's general living expenses, inclusion of the alimony as income is appropriate.

 (d) Reduced Income or Fluctuating [Income] Earnings.

 (1) [Voluntary Reduction of Income. When either party voluntarily assumes a lower paying job, quits a job, leaves employment, changes occupations or changes employment status to pursue an education, or is fired for cause, there generally will be no effect on the support obligation.] Voluntary Income Reduction. The trier-of-fact shall not downwardly adjust a party's net income if the trier-of-fact finds that:

 (i) the party's income reduction resulted from the party willfully attempting to favorably affect the party's basic support obligation; or

 (2) [Involuntary Reduction of, and Fluctuations in, Income. No adjustments in support payments will be made for normal fluctuations in earnings. However, appropriate adjustments will be made for substantial continuing involuntary decreases in income, including but not limited to the result of illness, lay-off, termination, job elimination or some other employment situation over which the party has no control unless the trier of fact finds that such a reduction in income was willfully undertaken in an attempt to avoid or reduce the support obligation.] Involuntary Income Reduction. Incarceration. Earnings Fluctuations.

 (i) Involuntary Income Reduction. The trier-of-fact shall adjust a party's monthly net income for substantial continuing involuntary decreases in income due to an employment situation over which the party has no control, including, but not limited to, illness, lay-off, termination, or job elimination.

 (ii) Incarceration.

 (A) Except as set forth in subdivision (d)(2)(ii)(B), the trier-of-fact shall:

 (I) consider an incarcerated party's income reduction as an involuntary income reduction as set forth in subdivision (d)(2)(i); and

 (II) adjust the incarcerated party's monthly net income accordingly.

 (B) Exception.

 (I) A party's incarceration shall not constitute an involuntary income reduction when the incarceration is due to support enforcement purposes or a criminal offense in which the party's dependent child or the obligee was the victim; and

 (II) The trier-of-fact makes a written finding that downwardly adjusting the incarcerated party's monthly net income would be unjust or inappropriate and, in a child support action, takes into consideration the child's best interest.

 (iii) Earnings Fluctuations. The trier-of-fact shall not adjust a party's monthly net income due to normal or temporary earnings fluctuations.

 (4) Earning Capacity. [If the trier of fact determines that a party to a support action has willfully failed to obtain or maintain appropriate employment, the trier of fact may impute to that party an income equal to the party's earning capacity. Age, education, training, health, work experience, earnings history and child care responsibilities are factors which shall be considered in determining earning capacity. In order for an earning capacity to be assessed, the trier of fact must state the reasons for the assessment in writing or on the record. Generally, the trier of fact should not impute an earning capacity that is greater than the amount the party would earn from one full-time position. Determination of what constitutes a reasonable work regimen depends upon all relevant circumstances including the choice of jobs available within a particular occupation, working hours, working conditions and whether a party has exerted substantial good faith efforts to find employment.]

 (i) When a party willfully fails to obtain or maintain appropriate employment, the trier-of-fact may impute to the party an income equal to the party's earning capacity.

 (A) Earning Capacity Limitation. The trier-of-fact:

 (I) shall not impute to the party an earning capacity that exceeds the amount the party could earn from one full-time position; and

 (II) shall determine a reasonable work regimen based upon the party's relevant circumstances, including the jobs available within a particular occupation, working hours and conditions, and whether a party has exerted substantial good faith efforts to find employment.

 (B) The trier-of-fact shall base the party's earning capacity on the subdivision (d)(4)(ii) factors.

 (C) After assessing a party's earning capacity, the trier-of-fact shall state the reasons for the assessment in writing or on the record.

 (D) When the trier-of-fact imputes an earning capacity to a party who would incur childcare expenses if the party were employed, the trier-of-fact shall consider reasonable childcare responsibilities and expenses.

 (ii) Factors. In determining a party's earning capacity, the trier-of-fact shall consider the party's:

 (A) child care responsibilities and expenses;

 (B) assets;

 (C) residence;

 (D) employment and earnings history;

 (E) job skills;

 (F) educational attainment;

 (G) literacy;

 (H) age;

 (I) health;

 (J) criminal record and other employment barriers;

 (K) record of seeking work;

 (L) local job market, including the availability of employers who are willing to hire the party;

 (M) local community prevailing earnings level; and

 Official Note: See 45 C.F.R. § 302.56(c)(1)(iii) regarding earning capacity factors.

 [(1) Low-Income Cases.

 (i) If the obligor's monthly net income and corresponding number of children fall into the shaded area of the schedule set forth in Pa.R.C.P. No. 1910.16-3, the basic child support obligation shall be calculated initially by using the obligor's monthly net income only. For example, if the obligor has monthly net income of $1,100, the presumptive support amount for three children is $110 per month. This amount is determined directly from the schedule in Pa.R.C.P. No. 1910.16-3. Next, the obligor's child support obligation is calculated by using the parties' combined monthly net incomes and the appropriate formula in Pa.R.C.P. No. 1910.16-4. The lower of the two calculated amounts shall be the obligor's basic child support obligation.

 Example 1: The parties have two children. The obligor has monthly net income of $1,500, which falls into the shaded area of the schedule for two children. Using only the obligor's monthly net income, the amount of support for two children would be $472. Next, calculate support using the parties' combined monthly net incomes. The obligee has monthly net income of $2,500 so the combined monthly net income of the parties is $4,000. The basic child support amount at that income level for two children is $1,269. As the obligor's income is 38% of the combined monthly net income of the parties, the obligor's share of the basic support amount is $482. As the amount of support the obligor would pay using only the obligor's income is less than the amount calculated using the parties' combined monthly net incomes, the lower amount would be awarded, and the obligor's basic child support obligation would be $472.

 (ii) In computing a basic spousal support or alimony pendente lite obligation, the presumptive support amount shall not reduce the obligor's monthly net income below the Self-Support Reserve of $981 per month.

 Example 2: If the obligor earns $1,000 per month and the obligee earns $300 per month, the formula in Pa.R.C.P. No. 1910.16-4(a)(1)(Part B) would result in a support obligation of $213 per month (($1,000 × 33%) or $333 minus ($300 × 40%) or $120 for a total of $213). Since this amount leaves the obligor with only $787 per month, it must be adjusted so that the obligor retains at least $981 per month. The presumptive minimum spousal support amount, therefore, is $19 per month in this case.

 (iii) If the obligor's monthly net income is $981 or less, the trier-of-fact may award support only after consideration of the parties' actual financial resources and living expenses.

 (2) High-Income Cases. If the parties' combined monthly net income exceeds $30,000 per month, child support, spousal support, and alimony pendente lite calculations shall be pursuant to Pa.R.C.P. No. 1910.16-3.1.

 Official Note: See Hanrahan v. Bakker, 186 A.3d 958 (Pa. 2018)]

 (i) Self-Support Reserve (SSR).

 (A) The SSR is the minimum monthly net income reserved to the obligor to meet the obligor's basic needs.

 (B) The SSR amount is $ 1,063 per month.

 (A) The initial calculation is determined by using the obligor's monthly net income only, the schedule set forth in Pa.R.C.P. No. 1910.16-3, and the number of children.

 (B) The second calculation is determined by using the parties' combined monthly net income and the basic child support formula in Pa.R.C.P. No. 1910.16-4(a).

 (C) If the obligor's monthly net income is at or below the SSR, the trier-of-fact may award support only after consideration of the parties' actual financial resources and living expenses.

 (iii) Action for Spousal Support/Alimony Pendente Lite Only.

 (A) After calculating the spousal support or alimony pendente lite obligation as provided in Pa.R.C.P. No. 1910.16-4, the spousal support obligation shall not reduce the obligor's monthly net income below the SSR.

 (B) If the obligor's monthly net income after subtracting the spousal support or alimony pendente lite obligation is less than the SSR, the trier-of-fact shall adjust the spousal support or alimony pendente lite obligation downward by an amount sufficient for the obligor to retain the SSR amount.

 Example 2: The obligor has $1,200 monthly net income, and the obligee has $300 monthly net income. The formula in Pa.R.C.P. No. 1910.16-4(a)(1)(Part B) would result in a monthly spousal support obligation of $276 (($1,200 × 33% = $396) minus ($300 × 40% = $120) for a total of $276)). Since this amount leaves the obligor with only $924 per month, the trier-of-fact should adjust the support obligation so the obligor retains at least $1,063 per month. Therefore, the spousal support obligation is $137 per month ($1,200 - $1,063).

 (iv) Action with Child Support and Spousal Support or Alimony Pendente Lite.

 (A) The trier-of-fact shall calculate the spousal support or alimony pendente lite obligation as provided in Pa.R.C.P. No. 1910.16-4.

 (B) The trier-of-fact shall subtract the calculated spousal support or alimony pendente lite obligation from the obligor's monthly net income to determine the obligor's adjusted monthly net income.

 (C) When the obligor's adjusted monthly net income and the number of children in the action intersect in the Basic Child Support Schedule's shaded area as set forth in Pa.R.C.P. No. 1910.16-3, the trier-of-fact:

 (I) shall not award spousal support or alimony pendente lite; and

 (II) shall calculate child support as provided in subdivision (e)(1)(ii).

 Example 3: Obligor and obligee have monthly net incomes of $2,000 and $165, respectively, and have two children. Calculating spousal support under subdivision (e)(1)(iv)(A) results in a spousal support obligation of $450 ($2,000 × 25% minus $165 × 30%). Obligor's adjusted monthly net income ($2,000 minus $450) is $1,550. Obligor's adjusted monthly net income of $1,550 with two children is in the shaded area of the Basic Child Support Schedule, and as a result, the trier-of-fact shall not award spousal support. Instead, the trier-of-fact should award child support only as provided in subdivision (e)(1)(ii).

 (D) When the obligor's monthly net income and the number of children in the action do not intersect in the Basic Child Support Schedule's shaded area as set forth in Pa.R.C.P. No. 1910.16-3, the trier-of-fact shall calculate child support consistent with Pa.R.C.P. No. 1910.16-4.

 (I) The combined spousal support or alimony pendente lite and basic child support obligations shall not reduce the obligor's remaining monthly net income below the SSR.

 (II) If the obligor's monthly net income after subtracting the spousal support or alimony pendente lite and basic child support obligations is less than the SSR, the trier-of-fact shall adjust the support obligation downward by an amount sufficient for the obligor to retain the SSR amount.

 (2) High-Income Cases. If the parties' combined monthly net income exceeds $30,000, the trier-of-fact shall calculate child support, spousal support, or alimony pendente lite pursuant to Pa.R.C.P. No. 1910.16-3.1.

 Official Note: See Hanrahan v. Bakker, 186 A.3d 958 (Pa. 2018).

 (f) Child Tax Credit. In order to maximize the total income available to the parties and children, the trier-of-fact may award, as appropriate, the federal child tax credit to the non-custodial parent, or to either parent in cases of equally shared custody, and [order] require the other party to execute the waiver required by the Internal Revenue Code, 26 U.S.C. § 152(e). The trier-of-fact shall consider the tax consequences associated with the federal child tax credit [must be considered] in calculating the party's monthly net income available for support.

Explanatory Comment—2015

 The rule has been amended to provide that a party's support obligation will be reduced by the child's Social Security derivative benefit amount if that party's retirement or disability created the benefit and the benefit is being paid to the household in which the child primarily resides or the obligee in cases of equally shared custody. In most cases, payment of the benefit to the obligee's household will increase the resources available to the child and the parties. The rule is intended to encourage parties to direct that the child's benefits be paid to the obligee.

Explanatory Comment—2021

 The Self-Support Reserve is determined by the Federal Poverty Guideline for one person converted to a monthly amount—currently $1,063—for the year the Basic Child Support Schedule was derived.

 Subdivision (e)(1) addresses low-income cases and has been completely rewritten and identifies the current monthly Self-Support Reserve (SSR) amount as $1,063. The SSR is the amount of the obligor's monthly net income that is reserved to meet the obligor's basic needs. Subdivisions (e)(1)(ii)—(iv) adjust the methodology for calculating support when the obligor's monthly net income is at or near the SSR amount.

Rule 1910.16-3. Support Guidelines. Basic Child Support Schedule.

 The following schedule represents the amounts spent on children of intact families by combined monthly net income and number of children. Combined monthly net income is on the schedule's vertical axis, and the number of children is on the schedule's horizontal axis. This schedule determines the basic child support obligation. Unless these rules provide otherwise, the obligor's [share of the] basic child support obligation shall be computed using either the formula set forth in Pa.R.C.P. No. 1910.16-4(a)(1)(Part C) or [(2)(Part I)] (a)(2)(Part I).