In May, 2005, the state senate and house passed a bill with sweeping changes to Minnesota 's current child support system and its child support laws. That bill was subsequently signed into law by Governor Pawlenty. Now that the bill has become law, it will not be effective until January 1, 2007. Modifications of existing child support obligations may not be available for most parties until January 1, 2008. The new law creates some unclear areas that will ultimately be refined through litigation and case law. Some of the critical changes are summarized below:

Six Month Review of Court Orders. Every family court order or divorce judgment that addresses the issues of child support, custody or parenting time will include an attached form and instructions for either party to seek a review of the order after a six month period. Once that written request for review is filed with the Court Administrator, a hearing date will be scheduled. At that hearing, the Court may impose penalties for contempt on either party based on their failure to comply with the court orders. The hearing is designed to review the following issues:

1. Child Support. Whether child support is current. The burden of demonstrating that child support is current will fall upon the person paying support. He/she may request an accounting of child support from the child support enforcement office no less than 14 days prior to the hearing;
2. Parenting Time. Whether both parties are complying with the parenting provisions of the Court order.

New Child Support Guidelines. Under the new law, the child support system has changed dramatically. In the past, the label of "custody" was all important to determinations of child support. If one parent was awarded "sole physical custody" as part of a court order, the other parent was required to pay full guideline child support based on their net income regardless of the amount of time that he/she spent with the child. The end result was often a battle over the label of "sole physical custody versus joint physical custody" rather than focusing on the parenting time of the two parties. If the parties were awarded "joint Physical custody" then both incomes were used and the amount of overnights was also determined between the respective parties. Commonly referred to as the Valento formula.

Under the new law, child support guidelines will again form a rebuttable presumption regarding the level of support that should be paid. Unlike the old law, however, child support guidelines will now be based on the "gross income" of both parents and the "parenting time" for each regardless of the "custody" label. The combined incomes of the parents is referred to as "Parental Income for Child Support" or "PICS."

Every order that applies the new child support laws must also indicate the percentage of time that each parent spends with the child under the existing parenting schedule. Where an order does not specify parenting time it is rebuttably presumed that each parent has the children with them at least 25% of the time.

Child support that is paid under the new statutory guidelines is specifically designated as a payment for "basic support." Basic support relates to the child's housing, food, clothing, transportation, education costs and other expenses related to the child's care. It specifically excludes costs related to child care (daycare) and medical/dental expenses. There are two systems for computing child support under the new guidelines. One system applies where the parents do not have equal parenting time and second system applies where the parents have equal parenting time.

SYSTEM ONE: Parenting Time is not Equal.

The computation of child support where the parents do not have presumed equal parenting time can be calculated as follows:

1. Determine the monthly gross income for each parent;
2. Add the monthly gross incomes of both parents together;
3. Locate the income bracket based on combined income on the child support guideline chart;
4. Find the presumptive child support amount under the column indicating the number of joint children between the parties;
5. Multiply the presumptive child support amount by the percentage of the total income represented by each parent's individual income. In other words, determine each parent's proportionate share of the total child support amount. This can be accomplished by using each parent's monthly gross income as the numerator and dividing by gross income as the denominator. For example, if mom earns $2,000 gross per month and dad earns $3,000 gross per month, the total income is $5,000 per month. Child support for one child is presumed to be $780.00 per month. That figure is divided proportionate to income. For dad, that would be $3,000/5000 or 60%. As a result, his obligation would be $780.00 x .6 = 468.00. For mom it would be 40% or $312.00. Since dad has the greater obligation, he is the obligor and would pay support to mom. There is no offset of the amounts.
6. Next, apply a parenting time adjustment. If the parent has the child less than 10% of the time there is no adjustment. If the parent has the child 10 percent to 45 percent of the time, there is a 12% adjustment. If the parent has the child 45.1 percent of the time to 50 percent of the time, it is presumed that the parenting time is equal. The calculation for equal parenting will be discussed in more detail below. Using the example above, if dad has the children 30% of the time, his obligation is reduced as follows: 468 x .12= 56.16; 468 - 56.16= $411.84. As a result, dad would pay child support to mom in the amount of $411.84 per month.

SYSTEM TWO: Parenting Time is Equal.

Parents that have presumed equal parenting time (45.1 to 50 percent of the time) would pay no child support if their incomes were also equal. If their incomes are not equal, the parent with the greater income would pay child support as follows:

1. Take combined presumptive support amount found in Step 4 above and multiply it by 1.5. Using our existing example, that would be $780 x 1.5 = $1,170.00.
2. Prorate this obligation based on respective income. That is 60% for dad in the example or $702.00; and 40% for mom or $468.00.
3. Subtract the lower figure from the higher figure to arrive at $234.00 and divide that figure in half for a monthly obligation from dad to mom of $117.00 per month.

HOW DO I SEEK A MODIFICATION?

First of all, the new laws will not go into effect until January 1, 2007. Second, the new laws also indicate that the existence of new child support guidelines is not a basis, by itself, to seek a modification of existing child support obligations. Instead, there must exist a substantial change in circumstance since the last order warranting a modification.

In fact, there are very few people who qualify for a modification in 2007. Part of the reason for this is because the courts are setting up an entirely new procedural system for processing child suppoprt motions, and that will take some time. As a result, primarily, only cases where child support has not previously been set will fall under the new law in 2007. There are some exceptions however. Those exceptions include:

1. either party has substantially increased or deceased income;
2. either party or the child subject to the proceedings have substantially increased or decreased need;
3. receipt of public assistance;
4. A change in the cost of living for either party which makes the obligation unreasonable or unfair;
5. extraordinary medical expenses of the child not provided for in a previous order regarding health insurance or division of uninsured medical expenses;
6. the addition of work or education related child care expenses of the obligee or a substantial increase or decrease in the existing work or education related child care expenses;
7. the emancipation of a child.

After January 1, 2008, a party may apply for a modification if a substantial change in circumstance has occured, which mean that:

1. the gross income of either party has increased or decreased substantially;
2. the need of either party or the children has increased or decreased substantially;
3. one party has been forced onto public assistance;
4. there has been a significant increase or decrease in the Cost of Living as determined by the Federal Bureau of Labor Statistics;
5. extraordinary medical expenses for the child exist that are not covered by other provisions of the parties' court order;
6. there has been a substantial change in work or education related child care expenses;
7. a child has been emancipated.

A substantial change is presumed to have occurred if:

• (a) the application of new child support guidelines to the circumstances of the parties would result in a child support obligation that is at least 20% and at least $75 higher or lower than the existing obligation;
• (b) a parent ordered to provide health insurance for a child finds that it is no longer available to the child;
• (c) the existing child support obligation is expressed as a percentage rather than a specific dollar amount;
• (d) the gross income of either parent has decreased by at least 20% through no fault or choice of that parent. The law also states specifically that the child support is not presumptively modifiable solely because an obligor or obligee becomes responsible for the support of an additional non-joint child born after an existing child support order.

WHAT ABOUT CHILDREN FROM OTHER RELATIONSHIPS?

The new child support bill allows for a reduction in child support for some serial families. Under Minnesota Statutes Sec. 518.54, Subd. 18, when either or both parents of a joint child have a child support obligation for a non-joint child that precedes the current obligation, the child support is deducted from gross income before calculating the current child support obligation. In a situation where one parent or both parents are legally responsible for a non-joint child and the child lives in their household, they are entitled to a credit which is calculated as follows:

1. Determine Gross Income for each parent.
2. Using only the gross income of the parent for who the credit is being calculated, determine basic support under the child support guideline for the non-joint child or children residing with the parent. The number of non-joint children that can be used is capped at two. So, if there are three non-joint children residing with a parent, only two can be used for determining the child support credit.
3. The credit that is applied is fifty percent (50%) of the guideline amount which is then subtracted from that parent's gross income in determining the current obligation.

This provision for non-joint children is confusing and will undoubtedly be the subject of litigation. For example, it is unclear whether a parent that shares physical custody is entitled to a credit. Determining when a child resides with one parent or another is not fully explained.

WHAT HAPPENS IF THE OTHER PARENT REFUSES TO WORK FULL TIME?

One of the concerns addressed in the new law is that one of the parents may decide not to work full time and to, instead, be a stay at home parent. First, the law presumes that each parent has the ability to work full time which means a 40 hour work week.

Second, the new law provides specific guidelines for imputing income to a parent that is voluntarily underemployed or unemployed. In one of its provisions, the law states that if a parent stays at home to care for a child that is subject to the child support order, the court may consider the following factors when determining whether the parent is voluntarily underemployed or unemployed:

• The parties' parenting and child care arrangements before the child support action;
• The stay-at-home parent's employment history, recency of employment, earnings, and the availability of jobs within the community for an individual with the parent's qualification;
• The relationship between the employment-related expenses, including, but not limited to, child care and transportation costs required for the parent to be employed, and the income the stay-at-home parent could receive from available jobs within the community for an individual with the parent's qualifications;
• The child's age and health including whether the child is physically or mentally disabled;
• The availability of child care providers.

** The above information is meant to be informative and educational only. The laws are subject to change and controlled by the legislature and Minnesota Statutes. Please contact an attorney for current information.