THE COURTS
PART I. GENERAL
[231 PA. CODE CH. 1910]
Order Amending Rules 1910.16-1, 1910.16-2, 1910.16-3, 1910.16-4, 1910.16-5, 1910.16-6 and 1910.16-7; No. 442 Civil Procedural Rules; Doc. No. 5
[35 Pa.B. 5643]
Order Per Curiam:
And Now, this 27th day of September, 2005, Rules 1910.16-1, 1910.16-2, 1910.16-3, 1910.16-4, 1910.16-5, 1910.16-6 and 1910.16-7 of the Pennsylvania Rules of Civil Procedure are amended as follows.
This order shall be processed in accordance with Pa. R.J.A. 103(b) and shall be effective four months from the date of this order.
Annex A
TITLE 231. RULES OF CIVIL PROCEDURE
PART I. GENERAL
CHAPTER 1910. ACTIONS FOR SUPPORT Rule 1910.16-1. Amount of Support. Support Guidelines.
(a) Applicability of the Support Guidelines.
(1) Except as set forth in subdivision (2) below, the support guidelines set forth the amount of support which a spouse or parent should pay on the basis of both parties' net monthly incomes as defined in Rule 1910.16-2 and the number of persons being supported. [The support of a spouse or child is a priority obligation so that a party is expected to meet this obligation by adjusting his or her other expenditures.]
(2) In actions in which the plaintiff is a public body or private agency pursuant to Rule 1910.3, the amount of the order shall be calculated under the guidelines based upon each obligor's net monthly income as defined in Rule 1910.16-2, with the public or private entity's income as zero. In such cases, each parent shall be treated as a separate obligor and a parent's obligation will be based upon his or her own monthly net income without regard to the income of the other parent.
(i) The amount of basic child support owed to other children not in placement shall be deducted from each parent's net income before calculating support for the child or children in placement, including the amount of direct support the guidelines assume will be provided by the custodial parent.
Example 1. Mother and Father have three children and do not live in the same household. Mother has primary custody of two children and net monthly income of $1,500 per month. Father's net monthly income is $3,000. The parties' third child is in foster care placement. Pursuant to the schedule at Rule 1910.16-3, the basic child support amount for the two children with Mother is $[1,235] 1,216. As Father's income is 67% of the parties' combined monthly net income, his basic support obligation to Mother is $[827] 815 per month. The guidelines assume that Mother will provide $[408] 401 per month in direct expenditures to the two children in her home. The agency/obligee brings an action against each parent for the support of the child in placement. Father/obligor's income will be $[2,173] 2,185 for purposes of this calculation ($3,000 net less $[827] 815 in support for the children with Mother). Because the agency/obligee's income is zero, Father's support for the child in placement will be 100% of the schedule amount of basic support for one child at the $[2,173] 2,185 income level, or $[505] 545 per month. Mother/obligor's income will be $[1,092] 1,099 for purposes of this calculation ($1,500 net less $[408] 401 in direct support to the children in her custody). Her support obligation will be 100% of the schedule amount for one child at that income level, or $[268] 284 per month.
Example 2. Mother and Father have two children in placement. Father owes child support of $500 per month for two children of a former marriage. At the same income levels as above, Father's income for determining his obligation to the children in placement would be $2,500 ($3,000 less $500 support for two children of prior marriage). His obligation to the agency would be $[842] 853 per month (100% of the schedule amount for two children at the $2,500 per month income level). Mother's income would not be diminished as she owes no other child support. She would owe $[521] 544 for the children in placement (100% of the schedule amount for two children at the $1,500 income level).
(ii) If the parents reside in the same household, their respective obligations to the children who remain in the household and are not in placement shall be calculated according to the guidelines, with the parent having the higher income as the obligor, and that amount shall be deducted from the parents' net monthly incomes for purposes of calculating support for the child(ren) in placement.
Example. Mother and Father have four children, two of whom are in placement. Mother's net monthly income is $4,000 and Father's is $2,000. The basic support amount for the two children in the home is $[1,532] 1,359, according to the schedule at Rule 1910.16-3. As Mother's income is 67% of the parties' combined net monthly incomes, her share would be $[1,026] 911, and Father's 33% share would be $[506] 448. Mother's income for purposes of calculating support for the two children in placement would be $[2,974] 3,089 ($4,000 less $[1,026] 911). She would pay 100% of the basic child support at that income level, or $[961] 1,029, for the children in placement. Father's income would be $[1,494] 1,552 ($2,000 less $[506] 448) and his obligation to the children in placement would be $[521] 560.
(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 to reduce each parent's obligation in proportion to his or her share of the combined obligation.
(3) The support of a spouse or child is a priority obligation so that a party is expected to meet this obligation by adjusting his or her other expenditures.
(b) Amount of Support. The amount of support (child support, spousal support or alimony pendente lite) to be awarded pursuant to the procedures under Rules 1910.11 and 1910.12 shall be determined in accordance with the support guidelines which consist of the guidelines expressed as the child support schedule set forth in Rule 1910.16-3, the formula set forth in Rule 1910.16-4 and the operation of the guidelines as set forth in these rules.
(c) Spousal Support and Alimony Pendente Lite. Orders for spousal support and alimony pendente lite shall not be in effect simultaneously.
(d) Rebuttable Presumption. If it has been determined that there is an obligation to pay support, there shall be a rebuttable presumption that the amount of the award determined from the guidelines is the correct amount of support to be awarded. The support guidelines are a rebuttable presumption and must be applied taking into consideration the special needs and obligations of the parties. The trier of fact must consider the factors set forth in Rule 1910.16-5. The presumption shall be rebutted if the trier of fact makes a written finding, or a specific finding on the record, that an award in the amount determined from the guidelines would be unjust or inappropriate.
(e) Guidelines Review. The guidelines shall be reviewed at least once every four years to insure that [their] application results in the determination of appropriate amounts of support.
[Explanatory Comment--1998 Introduction
Federal and state law require the use of guidelines to establish child and spousal support orders. Using the guidelines promotes (1) similar treatment of persons similarly situated, (2) a more equitable distribution of the financial responsibility for raising children, (3) settlement of support matters without court involvement, and (4) more efficient hearings where they are necessary. The Pennsylvania Rules of Civil Procedure governing actions for support set forth the basic child support schedule and formula as well as the explanatory text.
A. Income Shares. The child support guidelines are based on the Income Shares Model developed by the Child Support Guidelines Project of the National Center for State Courts. The model is based on the idea that the child of separated or divorced parents should receive the same proportion of parental income that she or he would have received if the parents lived together. A number of authoritative economic studies provide estimates of the average amount of household expenditures for children in intact households. These studies show that the proportion of household spending devoted to children is directly related to the level of household income and to the number and ages of the children. The basic support amounts reflected in the child support schedule in Rule 1910.16-3 represent average marginal expenditures on children for food, housing, transportation, clothing and other miscellaneous items that are needed by children and provided by their parents, including the first $250 of unreimbursed medical expenses incurred annually per child.
B. Statutory Considerations. The federal statute, 42 U.S.C. § 467(a), requires that the guidelines be reviewed every four years. In addition, the Pennsylvania statute, 23 Pa.C.S. § 4322, states:
''. . . Child and spousal support shall be awarded pursuant to a Statewide guideline as established by general rule by the Supreme Court, so that persons similarly situated shall be treated similarly. The guidelines shall be based upon the reasonable needs of the child or spouse seeking support and the ability of the obligor to provide support. In determining the reasonable needs of the child or spouse seeking support and the ability of the obligor to provide support, the guidelines shall place primary emphasis on the net incomes and earning capacities of the parties, with allowable deviations for unusual needs, extraordinary expenses and other factors, such as the parties' assets, as warrant special attention.''1. Reasonable Needs and Reasonable Ability to Provide Support. The guidelines make financial support of a child a primary obligation. They assume that parties with similar net incomes will have similar reasonable and necessary expenses. After the basic needs of the parents have been met, the child's needs shall receive priority. The guidelines assume that if obligor's net income is less than $550, he or she is barely able to provide for basic personal needs. In these cases, therefore, entry of a minimal order is appropriate after considering the party's living expenses. In some cases, it may not be appropriate to order support at all.
In most cases, however, a party's living expenses are not relevant in determining his or her support obligation. Rather, as the statute requires, the obligation is based on the reasonable needs of a dependent spouse or child and the reasonable ability of the obligor to pay. For example, in setting the amount of child support, it should be of no concern to the court that one obligor chooses to live in a one-room apartment and rely solely on public transportation, while another obligor, earning the same salary, chooses to live in a five-bedroom apartment and drive a new car. Both are obligated to give priority to the needs of their children. What they choose to do with their remaining income is not relevant to a support claim.
2. Net Income. The guidelines use the net incomes of the parties, and are based on the assumption that a child's reasonable needs increase as the combined net income of the child's parents increases. Each parent is required to contribute a share of the child's reasonable needs proportional to that parent's share of the combined net incomes. The custodial parent makes these contributions entirely through direct expenditures for food, shelter, clothing, transportation and other reasonable needs. In addition to any direct expenditures on the child's behalf, the non-custodial parent makes contributions through periodic support payments.
3. Allowable Deviations. The guidelines are designed to treat similarly situated parents, spouses, and children in the same manner. However, when there are unavoidable differences, deviations must be made from the guidelines. Failure to deviate from these guidelines by considering a party's actual expenditures where there are special needs and special circumstances constitutes a misapplication of the guidelines.
C. Four-Year Review. The Family Support Act of 1988 (P. L. 100-485, 102 Stat. 2343 (1988)) requires that the child support guidelines be reviewed every four years to ensure that their application results in a determination of an appropriate child support award. With the assistance of Dr. Robert Williams, the developer of the Income Shares model, the Committee reviewed the most recent economic studies on child-related expenditures in intact households and assessed state guideline adjustments for low income, additional dependents, shared custody, child care, medical expenses and other factors which are considered in establishing or modifying a support award. Based on this review, Rules of Civil Procedure 1910.16-1 through 1910.16-5 relating to the guidelines have been amended and new Rules 1910.16-6 and 1910.16-7 have been added as follows.
1. Reorganization of the Rules. The rules have been reorganized so that they more logically follow the sequence for calculating the overall support obligation. Since the calculation begins with the computation of the parties' net incomes, new Rule 1910.16-2 consolidates all of the income provisions that formerly appeared throughout Rule 1910.16-5. Rule 1910.16-2 is followed by Rule 1910.16-3, the basic child support schedule; Rule 1910.16-4, the formula used in conjunction with the Schedule to arrive at obligor's basic support obligation; Rule 1910.16-5, which sets forth the factors the court must consider in determining whether to deviate from the basic support obligation; and Rule 1910.16-6, which consolidates all of the provisions for additional expenses that are typically added to the basic support obligation. Rule 1910.16-7 addresses the special treatment of child support obligations in the context of multiple families.
2. Calculation of Basic Child Support. The amount of basic support was previously determined from either the grids or the chart of proportional expenditures in conjunction with the income shares formula. The grids and the chart of proportional expenditures have been eliminated. The Committee has chosen to use a basic child support schedule, which numerically reflects the amounts spent on children in intact families by combined income and number of children. The schedule appears in Rule 1910.16-3 and shall be used to find the parties' combined basic child support obligation. In turn, the obligor's share of this obligation is calculated using the income shares formula in Rule 1910.16-4.
The amounts of child support set forth in the schedule have been updated to reflect recent economic estimates of child-related spending in intact households. Pursuant to federal and state law, these estimates must be adopted to ensure that children continue to receive adequate levels of support. Since the studies now consider households of up to six children, the guidelines have been expanded from four to six children. The newer studies also consider households with combined monthly net income of up to $12,600. Allowing for inflation, the model can be extended to combined monthly net income of up to $15,000. The Committee has chosen to do this so that the support guidelines will apply to more cases.
3. Computed Minimum Allowance in Low-Income Cases. The amended rules incorporate a Computed Allowance Minimum (CAM) into the support guidelines so that low-income obligors retain sufficient income to meet their basic needs and to maintain the incentive to continue working so that support can be paid. The CAM is built into the schedule in Rule 1910.16-3 and adjusts the basic support obligation to prevent obligor's net income from falling below $550 per month. Since the schedule reflects amounts of child support only, Rule 1910.16-2(e)(1)(B) provides for a similar adjustment in spousal support and APL cases so that the obligor retains at least $550 per month in these cases as well.
4. Shared Custody. Under the prior guidelines, there was no formula or procedure for deviating from the basic support guidelines when custody is shared equally or the non-custodial parent has substantial partial custody. The guidelines provided that the obligor's support obligation should be reduced only if he or she spent ''an unusual amount of time with the children.'' Yet, there have been several decisions rejecting deviation even if the obligor spends almost 50% of the time with the children. See, e.g., Anzalone v. Anzalone, 449 Pa. Super. 201, 673 A.2d 377 (1996)(40% time was not ''unusual''); Dalton v. Dalton, 409 Pa. Super. 258, 597 A.2d 1192 (1991)(43% time did not justify deviation).
It is generally agreed, however, that there should be some reduction in the support obligation in these cases to reflect the decrease in the obligee's variable expenses and the increase in obligor's fixed and variable expenses as a result of the children spending substantially more time with the obligor. As part of its four-year review of the guidelines, the Committee examined seven different methods being used by other states but found that none of them met these objectives without producing a substantial reduction in the support obligation at some income levels or income differentials for relatively small increases in custodial time. As a result, the Committee initially recommended the alternative solution of no reduction at all for time spent with the children. Based on the comments received, however, the Committee reconsidered this recommendation and ultimately selected a method which gives some recognition to the shift in child-related expenditures that occurs when the obligor spends a substantial amount of time with the children.
This method is set forth in Rule 1910.16-4(c) and has been built into the formula used to calculate the presumptively correct amount of the support obligation. While not a perfect solution to the problem of establishing support obligations in the context of substantial or shared custody, it is better than the previous void and preferable to the many offset methods developed by local courts which effectively reduced the support obligation out of proportion to the increase in custody time. Its chief advantage is that there is no sharp reduction in the obligation at the 40% threshold. It also provides statewide uniformity. The method does not, however, result in $0 when there is equal custody and equal income. In those cases, therefore, the Rule provides for a cap to reduce the obligation so that the obligee does not receive a larger portion of the combined income than the obligor. Although this cap may in some cases result in a substantial reduction between 45-50% time, the Committee is not aware of an existing model that does not create some ''cliff effect'' at some level at some point in time. This model was chosen over others because the cases which involve truly equal time-sharing and equal incomes continue to represent a very small percentage of support cases.
5. Multiple Families. The Committee has chosen to retain the existing approach for establishing multiple child and spousal support obligations. New Rule 1910.16-7 sets forth the method for calculating child support obligations so that all of the obligor's children continue to have equal access to his or her resources and no child receives priority over the other children. Since calculation of multiple spousal support obligations is essentially a function of net income, it appears in new Rule 1910.16-2 governing the general calculation of net income. The provision continues to highlight the fact that the rules do not accord the same treatment to second and later spouses as they do to children in multiple family situations. Unlike children, who have no choice about the situation into which they are born, adults have the opportunity to investigate a potential spouse before committing themselves.
6. Child Care Expenses. Whereas the prior rules provided for equal sharing of these expenses, Rule 1910.16-6(a) now provides for proportionate sharing based on the parties' net incomes so that these expenses are allocated in the same manner as other expenses which are typically added to the basic support obligation. The Rule also reflects the availability and limitations of the federal child care tax credit which can be claimed by the custodial parent.
7. Health Insurance Premiums. Under the prior rules, the portion of the cost of health insurance premiums which benefit the other party or the children was deducted from the party's net income. This provided little incentive for either party to obtain or maintain health insurance coverage for the benefit of the other family members. If the obligor was paying the premium, it reduced the basic support award only marginally. If the obligee was paying the premium, he or she received virtually no financial credit at all in terms of a higher support award.
To maximize the value for the party carrying the health insurance in most cases, new Rule 1910.16-6(b), in general, treats the cost of the premium as an additional expense subject to allocation between the parties in proportion to their net incomes. In the majority of cases, this more accurately reflects the costs of carrying such insurance and also ensures that the obligee receives some financial credit for carrying the insurance. However, in cases in which the obligee has no income or minimal income, and the obligor would otherwise bear the entire burden of paying the health insurance premiums with no other adjustment to his or her support obligation, the trier of fact may deduct part or all of the cost of the premium from the obligor's income for support purposes. The new Rule also permits allocation of the entire premium, including the party's portion of the premium, when the insurance benefits the other party or the children. This change provides further incentive for parties to obtain health insurance for the benefit of the other party and the children.
8. Unreimbursed Medical Expenses. There are three changes to the treatment of unreimbursed medical expenses. First, since the first $250 per year per child of these expenses is already built into the basic child support obligation reflected in the schedule, only medical expenses which exceed this amount are subject to allocation between the parties as an additional expense to be added to the basic support obligation. Rule 1910.16-6(c) reflects this distinction. The Committee has also chosen to draw this same distinction with respect to spousal support so that the obligee-spouse is expected to meet the first $250 per year of his or her own unreimbursed expenses before seeking contribution from the obligor for any additional expenses.
Second, the Rule distinguishes between those expenses which are predictable and recurring and those which are not. When the expenses are predictable and recurring, the court may establish a monthly amount for those expenses and add it to the basic support obligation. This permits the monthly amount to be collected more easily through wage attachment. When the expenses are variable and unanticipated, and thus not conducive to routine wage attachment, the court may nonetheless order the defendant to pay his or her percentage share of these expenses.
Third, the definition of medical expenses is amended to include insurance co-payments, deductibles, and orthodontia and to exclude chiropractic services.]
Explanatory Comment--2005 Introduction. Pennsylvania law requires that child and spousal support be awarded pursuant to a statewide guideline. 23 Pa.C.S. § 4322(a). That statute further provides that the guideline shall be ''established by general rule by the Supreme Court, so that persons similarly situated shall be treated similarly.'' Id.
Pursuant to federal law, The Family Support Act of 1988 (P. L. 100-485, 102 Stat. 2343 (1988), 42 U.S.C. § 667(a), statewide support guidelines must ''be reviewed at least once every four years to ensure that their application results in the determination of appropriate child support award amounts.'' Federal regulations, 45 CFR 302.56, further require that such reviews include an assessment of the most recent economic data on child-rearing costs and a review of data from case files to assure that deviations from the guidelines are limited. The Pennsylvania statute also requires a review of the support guidelines every four years. 23 Pa.C.S.A. § 4322(a).
The Domestic Relations Procedural Rules Committee of the Supreme Court of Pennsylvania began the mandated review process in early 2003. The committee was assisted in its work by Jane Venohr, Ph.D., an economist with Policy Studies, Inc., under contract with the Pennsylvania Department of Public Welfare. As a result of the review, the committee recommended to the Supreme Court several amendments to the statewide guidelines.
A. Income Shares Model. Pennsylvania's child support guidelines are based upon the Income Shares Model. That model 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 Guidelines Project Advisory Group recommended the Income Shares Model for state guidelines. At present, 33 states use the Income Shares Model as a basis for their child support guidelines.
The Income Shares Model is based upon the concept that the child of separated, divorced or never-married parents should receive the same proportion of parental income that she or he would have received if the parents lived together. A number of authoritative economic studies provide estimates of the average amount of household expenditures for children in intact households. These studies show that the proportion of household spending devoted to children is directly related to the level of household income and to the number of the children. The basic support amounts reflected in the schedule in Rule 1910.16-3 represent average marginal expenditures on children for food, housing, transportation, clothing and other miscellaneous items that are needed by children and provided by their parents, including the first $250 of unreimbursed medical expenses incurred annually per child.
1. Economic Measures. The support schedule in Rule 1910.16-3 is based upon child-rearing expenditures measured by David M. Betson, Ph.D., Professor of Economics, University of Notre Dame. Dr. Betson's measurements were developed for the U.S. Department of Health and Human Services for the explicit purpose of assisting states with the development and revision of child support guidelines. Dr. Betson's research was also used in developing the prior schedule, effective in April 1999. In 2001, Dr. Betson updated his estimates using data from the 1996-98 Consumer Expenditure Survey conducted by the U.S. Bureau of Labor Statistics. In the current schedule, those figures were converted to 2003 price levels using the Consumer Price Index.
2. Source of Data. The estimates used to develop the schedule are based upon national data. The specific sources of the data are the periodic Consumer Expenditure Surveys. Those national surveys are used because they are the most detailed available source of data on household expenditures. The depth and quality of this information is simply not available at the state level and would be prohibitively costly to gather. However, according to the 2000 Census conducted by the U.S. Census Bureau, the median Pennsylvania family income in 1999 was $49,184, while the national median family income was $50,046. Thus, using national data continues to be appropriate.
The U.S. Department of Agriculture's Center for Nutrition Policy and Promotion (''CNPP'') also develops economic estimates for the major categories of child-rearing expenditures. Although the committee reviewed these estimates, it is not aware of any state that relies upon the CNPP estimates as a basis for its child support schedule.
B. Statutory Considerations. The Pennsylvania statute, 23 Pa.C.S.A. § 4322(a), provides:
Child and spousal support shall be awarded pursuant to a Statewide guideline as established by general rule by the Supreme Court, so that persons similarly situated shall be treated similarly. The guideline shall be based upon the reasonable needs of the child or spouse seeking support and the ability of the obligor to provide support. In determining the reasonable needs of the child or spouse seeking support and the ability of the obligor to provide support, the guideline shall place primary emphasis on the net incomes and earning capacities of the parties, with allowable deviations for unusual needs, extraordinary expenses and other factors, such as the parties' assets, as warrant special attention. The guideline so developed shall be reviewed at least once every four years.1. Reasonable Needs and Reasonable Ability to Provide Support. The guidelines make financial support of a child a primary obligation and assume that parties with similar net incomes will have similar reasonable and necessary expenses. After the basic needs of the parents have been met, the child's needs shall receive priority. The guidelines assume that if the obligor's net income is at the poverty level, he or she is barely able to provide for his or her own basic needs. In those cases, therefore, the entry of a minimal order may be appropriate after considering the party's living expenses. In some cases, it may not be appropriate to enter a support order at all. In most cases, however, a party's living expenses are not relevant in determining his or her support obligation. Rather, as the statute requires, the obligation is based upon the reasonable needs of a dependent spouse or child and the reasonable ability of the obligor to pay.
2. Net Income. The guidelines use the net incomes of the parties and are based on the assumption that a child's reasonable needs increase as the combined net income of the child's parents increases. Each parent is required to contribute a share of the child's reasonable needs in proportion to that parent's share of the combined net income. The custodial parent makes these contributions through direct expenditures for food, shelter, clothing, transportation and other reasonable needs. The non-custodial parent makes contributions through periodic support payments to the custodial parent. Rule 1910.16-2(d) has been amended to clarify the provisions relating to fluctuating income and earning capacity.
3. Allowable Deviations. The guidelines are designed to treat similarly situated parents, spouses and children in the same manner. However, when there are unavoidable differences, deviations must be made from the guidelines. Failure to deviate from these guidelines by considering a party's actual expenditures where there are special needs and special circumstances constitutes a misapplication of the guidelines.
C. Child Support Schedule. The child support schedule in Rule 1910.16-3 has been amended to reflect updated economic data, as required by federal and state law, to ensure that children continue to receive adequate levels of support. At some income levels the presumptive amount of support has increased from the previous schedule, and at some income levels it has decreased. The economic data support the revised schedule. The support amounts in the schedule have been expanded to apply to a combined net monthly income of $20,000 and remain statistically valid.
D. Self-Support Reserve (''SSR''). The amended schedule also incorporates an increase in the ''Self-Support Reserve'' or ''SSR'' from $550 per month to $748 per month, the 2003 federal poverty level for one person. Formerly designated as the ''Computed Allowance Minimum'' or ''CAM,'' the Self-Support Reserve, as it is termed in most other states' guidelines, is intended to assure that low-income obligors retain sufficient income to meet their own basic needs, as well as to maintain the incentive to continue employment. The SSR is built into the schedule in Rule 1910.16-3 and adjusts the basic support obligation to prevent the obligor's net income from falling below $748 per month. Because the schedule in Rule 1910.16-3 applies to child support only, Rule 1910.16-2(e)(1)(B) provides for a similar adjustment in spousal support and alimony pendente lite cases to assure that the obligor retains a minimum of $748 per month.
E. Shared Custody. Prior to the amendments effective in April of 1999, there was no formula or procedure for deviating from the basic support guidelines when custody was shared equally or the non-custodial parent has substantial partial custody. Prior to 1999, the guidelines provided that the obligor's support obligation should be reduced only if he or she spent ''an unusual amount of time with the children.''
As part of the review process that resulted in the 1999 amendments, the committee considered the practices of several other jurisdictions and ultimately selected a method which gave some recognition to the shift in child-related expenditures that occurs when the obligor spends a substantial amount of time with the children. While recognizing that it was not a perfect solution to the problem of establishing support obligations in the context of substantial or shared custody, it was preferable to the diverse offset methods which had been developed by local courts. Its chief advantage was that it provided statewide uniformity and avoided a sharp reduction in the obligation at certain thresholds. These amendments do not change that rule.
F. Child Care Expenses. Rule 1910.16-6(a) has been amended to provide that child care expenses incurred by both parties shall be apportioned between the parties in recognition of the fact that a non-custodial parent may also incur such expenses during his or her custodial periods with the children.
G. Other Amendments. All of the examples in the guidelines have been updated to reflect the changes to the basic child support schedule. Prior explanatory comments have been deleted or revised and incorporated into new comments.
Rule 1910.16-2. Support Guidelines. Calculation of Net Income.
[The] Generally, the amount of support to be awarded is based [in large part] upon the parties' monthly net income.
(a) Monthly Gross Income. Monthly gross income is ordinarily based upon at least a six-month average of all of a party's income. The term ''income'' is defined by the support law, 23 Pa.C.S.A. § 4302, and includes income from any source. The statute lists many types of income including, but not limited to:
* * * * * (7) alimony if, in the discretion of the trier of fact, inclusion of part or all of it is appropriate; and
Official Note: 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 [rehabilitative] 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.
* * * * * (b) Treatment of Public Assistance, SSI Benefits and Social Security Payments to a Child Due to a Parent's Death, Disability or Retirement.
* * * * * (2) If a child for whom support is sought is receiving Social Security benefits as a result of a parent's retirement, death or disability, the benefits the child receives shall be added to the combined monthly net incomes of the obligor and the obligee to calculate the income available for support on the vertical axis of the basic child support schedule set forth in Rule 1910.16-3. The presumptive amount of support as set forth on the schedule at the combined income of the obligee, obligor and child's benefits shall then be reduced by the amount of the child's benefits before apportioning the remaining support obligation between the parties pursuant to Rule 1910.16-4. For purposes of determining the support obligation of a surviving parent when the child is receiving benefits as the result of the other parent's death, the income of a non-parent obligee who is caring for a child but has no support obligation to that child shall include only those funds the obligee is receiving on behalf of the child.
Example 1. If the obligor has net [monthly] income of $1,200 per month; the obligee has net monthly income of $800; and the child receives Social Security derivative benefits of $300 per month as a result of either the obligor's or obligee's retirement or disability, then the total combined monthly net income is $2,300. Using the schedule at Rule 1910.16-3 for one child, the amount of support is $[539] 568 per month. From that amount, subtract the amount the child is receiving in Social Security derivative benefits ($[539] 568 minus $300 equals $[239] 268). Then, apply the formula at Rule 1910.16-4 to apportion the remaining child support amount of $[239] 268 between the obligor and the obligee in proportion to their respective incomes. [Obligor's] The obligor's $1,200 net income per month is 60% of the total of the obligor's and the obligee's combined net monthly income. Thus, the obligor's support obligation would be 60% of $[239] 268, or $[143.40] 161, per month.
Example 2. Two children live with [grandmother] Grandmother who receives $400 per month in Social Security death benefits for the children as a result of their father's death. Grandmother also receives $500 per month from a trust established by [father] 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 $1,500 net per month. For purposes of calculating [mother's] Mother's support obligation, [grandmother's] Grandmother's income will be $500, the amount she receives on behalf of the children from the trust. Therefore, the obligee's and the obligor's combined net monthly incomes total $2,000. Add to that the $400 in Social Security benefits [grandmother] Grandmother receives for the children to find the basic child support amount in Rule 1910.16-3. The basic support amount at the $2,400 income level for two children is $[811] 820. Subtracting from that amount the $400 in Social Security derivative benefits [grandmother] Grandmother receives for the children, results in a basic support amount of $[411] 420 to be apportioned between the parties. As [mother's] Mother's income is 75% of the parties' combined income of $2,000, her support obligation to [grandmother] Grandmother is $[308] 315 per month.
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.
* * * * * (2) In computing a spousal support or alimony pendente lite obligation, the court shall deduct from the obligor's monthly net income all of his or her child support obligations and any amounts of spousal support, alimony pendente lite or alimony being paid to former spouses.
(d) Reduced or Fluctuating Income.
(1) Voluntary Reduction of Income. [Where a] 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. [A party will ordinarily not be relieved of a support obligation by voluntarily quitting work or by being fired for cause.
Official Note: This provision applies to the establishment as well as modification of a support obligation. To the extent that Klahold v. Kroh, 437 Pa. Super. 150, 649 A.2d 701 (1994) implies otherwise, it is overruled.]
(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.
(3) Seasonal Employees. Support orders for seasonal employees, such as construction workers, shall ordinarily be based upon a yearly average.
(4) [Income Potential] Earning Capacity. Ordinarily, [a] either party to a support action who [wilfully] willfully fails to obtain appropriate employment will be considered to have 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.
(e) Net Income Affecting Application of the Child Support Guidelines.
(1) Low Income Cases.
(A) When the obligor's monthly net income and corresponding number of children fall into the shaded area of the schedule set forth in Rule 1910.16-3, the basic child support obligation shall be calculated using the obligor's income only. For example, where the obligor has monthly net income of $[750] 850, the [presumptively correct] presumptive amount of support for three children is $[184] 94 per month. This amount is determined directly from the schedule in Rule 1910.16-3.
(B) In computing a basic spousal support or alimony pendente lite obligation, the [presumptively correct] presumptive amount of support shall not reduce the obligor's net income below $[550] 748 per month. For example, if the obligor earns $[600] 800 per month and the obligee earns $300 per month, the formula in Part IV of Rule 1910.16-4 would result in a support obligation of $[120] 200 per month. Since this amount leaves the obligor with only $[480] 600 per month, it must be adjusted so that the obligor retains at least $[550] 748 per month. The [presumptively correct] presumptive minimum amount of spousal support, therefore, is $[50] 52 per month in this case.
(C) When the obligor's monthly net income is $[550] 748 or less, the court may award support only after consideration of the obligor's actual living expenses.
(2) High Income Child Support Cases. When the parties' combined net income exceeds $[15,000] 20,000 per month, child support shall be calculated pursuant to Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984). The presumptive minimum amount of child support shall be the obligor's percentage share of the highest amount of support which can be derived from the schedule for the appropriate number of children and using the parties' actual combined income to determine the obligor's percentage share of this amount. The court may award an additional amount of child support based on the parties' combined income and the factors set forth in Melzer. The Melzer analysis in high income child support cases shall be applied to all of the parties' income, not just to the amount of income exceeding $[15,000] 20,000 per month. In a Melzer analysis case, the presumptive minimum remains applicable.
For example, where the obligor and the obligee have monthly net incomes of $17,000 and $4,000 respectively, the presumptive minimum amount of child support for three children is calculated as follows: using the formula in Rule 1910.16-4, determine the parties' percentage shares of income based on their actual combined income--81% and 19% respectively of $21,000. Using the schedule in Rule 1910.16-3, find the highest possible combined child support obligation for three children--$[3,480] 3,018. [Obligor's] The obligor's percentage share of the combined obligation is 81% of $[3,480] 3,018, or $[2,818] 2,445. This is the presumptive minimum amount of child support that he or she must pay for three children. Since this amount is derived from the schedule in Rule 1910.16-3, which is limited to combined household income of $[15,000] 20,000, the court may award an additional amount of support based on the factors set forth in Melzer.
(f) Dependency Tax Exemption. In order to maximize the total income available to the parties and children, the court may, as justice and fairness require, award the federal child dependency tax exemption to the non-custodial parent, or to either parent in cases of equally shared custody, and order the other party to execute the waiver required by the Internal Revenue Code, 26 U.S.C.A. § 152(e). The tax consequences resulting from an award of the child dependency exemption must be considered in calculating each party's income available for support.
[Explanatory Comment--1998 This new Rule consolidates all of the income provisions which formerly appeared throughout Rule 1910.16-5. Subdivision (a) specifies what is gross income for purposes of calculating the support obligation. In conformity with the recently expanded definition of income under 23 Pa.C.S. § 4322, income includes bonuses, lottery winnings, income tax refunds, insurance compensation or settlements, awards or verdicts and any form of payment due and collectible regardless of source.
Subdivision (c) sets forth the exclusive list of the deductions that may be taken from gross income in arriving at a party's net income. When the cost of health insurance premiums is treated as an additional expense subject to allocation between the parties under Rule 1910.16-6, it is no longer deductible from gross income. However, part or all of the cost of health insurance premiums may be deducted from the obligor's gross income pursuant to Rule 1910.16-6(b) in cases in which the obligor is paying the premiums and the obligee has no income or minimal income. Subdivision (c) also incorporates former Rule 1910.16-5(o) relating to awards of spousal support or APL when there are multiple families. In these cases, a party's net income must be reduced further to account for his or her child support obligations as well as any pre-existing spousal support, APL or alimony obligations being paid to former spouses who are not the subject of the support action.
Subdivision (e) reflects the Computed Allowance Minimum (CAM) in low-income child support cases. When the obligor's net monthly income or earning capacity falls into the shaded area of the schedule, the basic child support obligation can be derived directly from the schedule in Rule 1910.16-3. There is no need to use the formula in Rule 1910.16-4 to calculate obligor's support obligation because the CAM keeps the amount of the obligation the same regardless of obligee's income. Obligee's income may be a relevant factor, however, in determining whether to deviate from the basic guideline obligation pursuant to Rule 1910.16-5 and in considering whether to require the obligor to contribute to any additional expenses under Rule 1910.16-6.
Since the schedule in Rule 1910.16-3 reflects child support only, subdivision (e)(1)(B) is necessary to reflect the operation of CAM in spousal support and alimony pendente lite cases. It adjusts the basic guideline obligation which would otherwise be calculated under the formula in Rule 1910.16-4 so that the obligor does not fall below $550 per month in these cases.
When the obligor's monthly net income is less than $550, subsection (1)(C) provides that the court must consider the parties' actual living expenses before awarding support. The guidelines assume that at this income level the obligor is barely able to meet basic personal needs. In these cases, therefore, entry of a minimal order is appropriate. In some cases, it may not be appropriate to order support at all.
The CAM amount is only the presumptively correct amount of basic support to be awarded. If the circumstances warrant, the court may deviate from that amount under Rule 1910.16-5 and may also consider the party's contribution to the additional expenses, which are typically added to the basic amount of support under Rule 1910.16-6. If, for example, the obligor earns only $600 per month but is living with his or her parents, or has remarried and is living with a fully-employed spouse, the court may consider an upward deviation under Rule 1910.16-5(b)(3) and/or may order the party to contribute to the additional expenses under Rule 1910.16-6. Consistent with the goals of CAM, however, the court should ensure that the overall support obligation leaves obligor with sufficient income to meet basic personal needs and to maintain the incentive to continue working so that support can be paid.
Subdivision (e) also reflects the limited application of Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984) to cases in which the guidelines cannot be used to establish the child support obligation because the parties' combined income exceeds $15,000 per month. The court must establish a presumptive minimum amount of child support using the guidelines to arrive at that amount. The formula for calculating the presumptive minimum amount has been modified slightly to clarify that the parties' percentage shares should be calculated using their actual combined income rather than theoretical combined income of only $15,000. This change eliminates many of the inequities and inconsistencies that arose under the previous formula for determining this amount. In considering whether to award an additional amount of child support, the court must use the factors set forth in Melzer. It would be improper to apply the formula in Rule 1910.16-4 to the amount of the parties' combined income which exceeds $15,000 per month and award the obligor's percentage share as additional support. Additional support, if any, may be more or less than the percentage share and must be determined, therefore, in accordance with the factors set forth in Melzer.
Explanatory Comment--2000 This rule has been amended to reflect the fact that the chart of proportional expenditures formerly set forth at Rule 1910.16-3(b) has been rescinded. In addition, the rule and Explanatory Comment have been revised to clarify that the factors set forth in Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984), must be applied by considering all of the parties' combined income, not just the amount over $15,000 per month. The presumptive minimum shall apply even if the Melzer analysis results in a figure lower than the presumptive minimum.]
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