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Don’t Forget the Perks when Calculating Child Support

calculating child supportIn Michigan, there is a set formula for calculating child support that a parent will either pay or receive after divorce. The amount is based on both parents’ net incomes among many other factors. The Michigan Child Support Formula Manual specifies in section 2.01 about Income, “A parent’s ‘net income’ used to calculate support will not be the same as that person’s take home pay, net taxable income or similar terms that describe income for other purposes.”

“One common misconception is that income equates to the amount listed on each person’s W-2 forms,” states Child Support Attorney Kathryn Wayne-Spindler. “What they forget is all the perks – company cars, tips, and trips for example.”

Consider All Forms of Income

When figuring the amount of child support owed, the courts will look at all forms of income including:

  • Regular wages
  • Overtime
  • Commissions
  • Bonuses
  • Earnings from self-employment
  • Rental income
  • Profit-sharing income (dividends)
  • Pension
  • Insurance payments
  • Unemployment
  • Social Security
  • Worker’s compensations
  • Military special pay
  • Veterans’ benefits
  • Tips
  • Gratuities
  • Royalties
  • Gambling winnings
  • Lottery winnings
  • Capital gains
  • Interest from inheritance income
  • Non-Monetary perks like food, tickets, gifts, travel, vehicles, etc.

Other Child Support Income Considerations

Interestingly, any “alimony/spousal support paid between the parents in the case under consideration does not get deducted from its payer’s income” for the purposes of calculating child support. (2.01(F))

Potential Income

For the purposes of child support calculations, the courts will also consider each parent’s potential income. This is important to spouses who have voluntarily chosen either unemployment or underemployment. One of the factors that can alter this amount significantly is the presence of children in the home. If dedication to childcare interferes with a parent’s ability to seek employment, that will be factored in. Here are the Michigan Child Support Formula Manual factors for potential income:

  • Prior employment and history
  • Educational Level
  • Physical and Mental Disabilities which may hinder a parent’s ability to earn
  • Availability for work
  • Work opportunities within a reasonable geographic area
  • Prevailing wage rates
  • Diligence in seeking appropriate income

Calculating Child Support Using Online Calculators

There are child support calculators online. Although they can give a general predicted range, they will not take the specific circumstances into account the way an experienced Family Law Attorney would.

“A new client can walk out of my office after meeting with me for the first time with an accurate estimate of how much child support he or she will either receive or pay,” said White Lake Family Law attorney Wayne Spindler. “Sometimes this can make a difference in how a person looks at divorce and single parenthood.” She counsels people against trying to guess at what they might owe or receive. It’s too easy to miss some of the important factors like perks and alternate forms of income. “It’s unfortunate when I hear of someone making a decision about their family’s future based on faulty or incomplete information. Especially when, after my years of experience, I could tell them very quickly what the child support amount would be,” said Wayne-Spindler.

Contact the Milford, Michigan law office of Kathryn Wayne-Spindler & Associates at 248-685-8888 for more information about calculating child support payments. She and her staff have represented hundreds of clients in child custody and child support cases throughout Southeastern Michigan including Oakland, Washtenaw, Wayne, Genesee and Livingston Counties.

Written and Posted by Christine Donlon Long, Communications’ Specialist for Kathryn Wayne-Spindler & Associates