As any divorced parent with children knows, calculating child support payments is a complicated and messy process. In some states, when a divorced spouse remarries, this changes the amount of child support that the newly married spouse either gives or receives. Some legal analysts do not believe that a stepparent should be responsible for child support payments which go directly to the spouse’s former spouse.
The California Statute
To address this issue, in 1994 California passed Family Code Section 4057.5, which includes guidelines for determining child support payments. Before the passage of this statute, courts were allowed to take new spouse income into account when calculating child support payments owed to the former spouse. This practice effectively required new spouses to donate a percentage of their incomes to their spouse’s children and former spouse.
The 1994 statute banned judges from including new spouse income in child support calculations. Courts can only consider the income of the parent, except in extraordinary cases “”where excluding that income would lead to extreme and severe hardship to any child subject to the child support award.” This appears to be a fair way of avoiding all sorts of conflicts and inequities that could arise if new spouse income were still included in the calculations.
However, there is at least one catch. Assume that after a divorce, one parent remarries and the other does not. So we have three individuals involved in a child support situation: the former spouse, the parent spouse, and the new spouse. The child support guidelines use after-tax income to determine payment amounts.
California is a community property state, meaning roughly that each spouse owns one half of the assets that both spouses have acquired since getting married. So the parent spouse must include one half of the community property income in their income tax return. Regardless of how they file, the new spouse’s income could push the parent spouse into a higher tax bracket than they otherwise would have been in. This in turn decreases their after-tax income.
According to a recent article in the Huffington Post, this system is fundamentally unfair to the former spouse. If the parent spouse ends up taking home less money simply because the new spouse makes more money, this can increase the amount of child support the former spouse owes to the parent spouse. In other words, by getting married to someone who makes a decent living, the parent spouse may be entitled to receive more child support from the former spouse.
Child Support Payments – What to Do
The system essentially punishes the former spouse and rewards the parent spouse for the marriage between the parent spouse and new spouse. One way to address the inequity created by the California child support statute would be to use before-tax income rather than after-tax income when calculating each parent’s obligations.