Understanding what goes into a child support amount calculation can give parents a sense of what to expect as part of the financial obligation to their child. In 1988, the federal government mandated that states provide guidelines for determining support, and all states presently use one of three models. Although the income shares model is the most commonly utilized guideline, the percentage of income model and the Melson formula are alternatively used by a handful of states.
Federal and State Law
Due to a federal law passed in 1988, every state in the country has passed child support guidelines. Although each state may have slightly different methods for calculating support, the Family Support Act provides that all support calculations must take into account the income of the noncustodial parent, provide for health care for the child, and use numeric criteria to come to the ultimate support obligation. Further, all states allow for modification of support if circumstances change and have enforcement measures if the parent fails to pay support. Although states share many similarities in support calculation, each state follows either the income shares model, the percentage of income model, or the Melson formula.
Income Shares Model
The income shares model is the most commonly used method of support calculation. The guiding principal behind the income shares model is that the child should have the same lifestyle and support as she did when the parents were together. States that use this model add together the income of both parents, and compare the figure to a grid that shows how much support should go to the child from parents with a particular income. The state will adjust the figure based on childcare expenditures, healthcare costs and other relevant costs. Support is then proportionately allocated to each parent based on the percentage of income each contributes.
Percentage of Income Model
The second most common support calculation is the percentage of income model, used by Alaska, Arkansas, Illinois, Mississippi, Nevada, New Hampshire, New York, North Dakota, Texas, Wisconsin and the District of Columbia. In this calculation, the state only considers the income of the noncustodial parent. The state may either use a flat percentage, meaning that all noncustodial parents pay the same percentage of income, or varying percentage, meaning that the percentage of support will vary by income level. While the calculation may be straightforward and easier to understand than other models, critics say it is unfair not to consider the custodial parent's income. Further, high child care or medical expenses are not considered under this model.
The Melson Formula is only used in Delaware, Hawaii and Montana. The formula looks similar to the income shares model in that it considers the income of both parents, but also includes several additional factors to ensure that the needs of the parents are met in addition to the needs of the child. Using this calculation, the state considers child care and medical expenses, the income of each parent, and each parent's self-support needs. Under this model, each parent is allowed to keep enough money to take care of his basic needs. but they cannot retain any more income until all the needs of the child have been met. If extra money is left over after the needs of the child and the parents have been met, the child is entitled to a percentage of the extra income.