INDEX Wisconsin has made some sweeping changes in its child support guidelines effective January 1, 2004. The Wisconsin Department of Workforce Development said the new rules, which went into effect Jan. 1, are based on the principle that both parents are responsible for supporting their children, regardless of whether the parents live together. The new guidelines provides relief for the far upper and far lower income brackets. For example, the new guidelines will have people making about $550 a month pay about 11 percent of their gross income for child support while people making $950 a month would pay the current 17 percent. Moreover, the amount determined for child support isn't based on income alone. The guidelines also take into account is the earning potential of the person. If they are capable of earning $950 a month, they will have to pay the same as someone who does earn $950. The new rules will affect cases coming before the court or cases being reviewed during the standard family court review process. The revisions will not immediately affect previously determined cases. The new rules are optional. The courts can use the new guidelines or the previous system when determining child support. Each case will be looked at individually to see if the parent qualifies for the new guidelines. The guidelines will notbe automatically applied to pre-existing obligations. The standard guide lines based on thenumber of children for most child support payor remains the same and is based on gross income.
If a payor is self employed, the Court may not consider certain business deductions. For example, the Court may add back in wages that are paid to other dependent household members or add in revenue that has not been distributed as wages if it is not necessary for growth of the business. The burden is on the payor to prove undistributed income is necessary for the business growth. The Court may also impute income if it is determined that the payor is earning less than the he/she is capable of earning based on education or past earning history. At a minimum, each person is deemed to be able to earn a minimum wage salary for 35 hours per week. The Court may also look at a payor's assets to determine child support including retirement plans, life insurance policies, stocks and bonds, cash deposits, worker's compensation, personal injury awards and business ownership. If the child receives social security disability based on a payor's disability, that amount will be included in the payor's gross income and deducted as part payment of the child support obligation that applies. The Court may also protect children under the new law by requiring a trust find to be created to protect the child's financial interests. This will generally occur most often for higher income payors. There are also adjustments based on shared parenting time. This portion of the law has changed significantly. When both parents have placement for 25% of the time or 92 days per year, the percentage of time each parent has with the child is calculated by including the number of overnights as the numerator and 365 as the denominator. If each parent has the child over 25% of the time, child support is determined by taking the gross income of each parent and multiplying it by the child support guidelines and then multiplying that resulting figure by 150% and then multiplying that result by the percentage of time that the parent does not have the child in their care. The two obligations are then offset. Example: Father has one child 30% ofthe time and has gross income of $4,000 per month. Mother has the child 70% of the time and earns $3,000 gross per month. Fathers Obligation: 4,000 x .17 = $680 x 1.5 = $1,020 x .7= $714.00 Mother's Obligation 3,000 x .17 = 510 x 1.5 = $765 x .3 =$229.50 Result: Father pays to mother the difference of the two obligations or $484.50 The Court may also assign responsibility for variable costs related to the child such as uninsured medical expenses or child care based on the proportion of time each parent has the child while taking into consideration each parent's income. Such payments are generally made directly to the parent or a third party care provider rather than through income withholding unless the monthly amount is easily discernable. Low income payors pay on a sliding scale. Click Here for the low income tables. High income payors (over $7,000 gross per month) also pay reduced amounts. If a payors in come is between $7,000 and $12,500 gross per month, the following percentages apply:
If the payors income is greater than $12,500 per month, the following percentages apply:
-- Hellmuth & Johnson, PLLC |