SENATE BILL REPORT
EHB 2888
BYRepresentatives Appelwick, R. Meyers, Dorn, McLean, May and Wood
Establishing a new child support schedule.
House Committe on Judiciary
Rereferred House Committee on Appropriations
Senate Committee on Law & Justice
Senate Hearing Date(s):February 14, 1990; February 16, 1990
Majority Report: Do pass as amended.
Signed by Senators Nelson, Chairman; McCaslin, Vice Chairman; Hayner, Madsen, Newhouse, Patrick, Rasmussen, Thorsness.
Minority Report: Do not pass.
Signed by Senators Niemi, Talmadge.
Senate Staff:Richard Rodger (786-7461)
February 20, 1990
AS REPORTED BY COMMITTEE ON LAW & JUSTICE, FEBRUARY 16, 1990
BACKGROUND:
The Social Security Act Title IV-D requires the states to have a state plan for determining child support amounts. In 1987, Washington State created a child support commission to recommend a child support schedule to the Legislature before the 1988 legislative session. The commission recommended a child support schedule to the Legislature which the Legislature adopted in the 1988 legislative session and which took effect July 1, 1988.
The Schedule: The schedule is based upon an "income shares" model which combines the net incomes of the parents and determines respective parental support obligations based on the parent's percentage of the combined income. The support is calculated by reference to an economic table and standards for determination of child support. The intent of the schedule was to set support at an amount that met the child's basic needs and maintained a standard of living for the child commensurate with the parents' standard of living.
The superior courts of the counties may adopt a schedule that varies from the commission's table by 25 percent for combined monthly incomes of $2,500 or more. Some of the counties have adopted alternative tables.
The standards and table are not in the code but are published in the Washington State Register. The commission may recommend changes to the table which will take effect unless the Legislature takes affirmative action to modify or reject the commission's recommendations.
Standards: The standards for determining the child support are:
(1) The Washington Child Support Schedule is applied: (a) in each county of the state; (b) in judicial and administrative proceedings; (c) in all proceedings in which child support is determined or modified; (d) for setting temporary and permanent support; and (e) for adjusting support orders instead of using a cost-of-living or escalation provision.
(2) The parents' obligation for support must be based on their combined net income, resources and special child rearing costs.
(3) Monthly gross income must include income from any source: salaries, wages, commissions, deferred compensation, bonuses, overtime, dividends, interest, trust income, severance pay, annuities, capital gains, social security benefits, workers compensation, unemployment, disability insurance benefits, gifts and prizes. AFDC, SSI, General Assistance, and food stamps shall be disclosed but must not be included in gross income or be a reason to deviate from the schedule. Spousal maintenance or child support received from other relationships must be disclosed and considered under Standards 12 and 13, but shall not be included in gross income.
(4) Allowable deductions from gross income are income taxes, FICA, mandatory pension plan payments, and mandatory union/professional dues. Payment of child support or maintenance involving other relationships must be disclosed and considered under Standards 12 and 13, but must not be included as a deduction from gross income.
For self-employed persons, normal business expenses and self-employment taxes may be deducted. Justification is required for any business expense deduction about which there is disagreement.
Non-recurring overtime/bonus income may be separately identified and allowed as a discretionary deduction from gross income.
(5) Tax returns for the preceding three years and current pay stubs must be provided to verify income and deductions. Other sufficient verification is required for income and deductions which do not appear on tax returns or pay stubs.
In the absence of information to the contrary, a parent's income must be based on the median income of year-round full-time workers as derived from the United States Bureau of Census, Current Population Reports.
(6) The basic child support obligation derived from the table must be allocated between the parents based on each parent's share of the total family net income.
(7) Ordinary health care expenses are included in the economic table. Expenses exceeding the amount set forth in the instructions must be considered extraordinary and must be shared by the parents in the same proportion as the basic child support obligation. The table presumes that 5 percent of the basic support obligation is spent on ordinary medical care.
Day care and special child rearing expenses such as tuition and long-distance transportation costs are not included in the economic table. These expenses must be shared by the parents in the same proportion as the basic child support obligation and must be listed as a specific dollar amount.
Discretion may be exercised to determine the reasonableness and necessity of extraordinary and special expenses.
(8) When combined monthly net income is less than $600, a support order not less than $25 per month per child must be entered.
When combined monthly net income exceeds $7000, child support must be determined by that amount from the table, together with an additional amount to be determined on an individual basis.
(9) Neither parent's child support obligation may exceed 50 percent of net earnings unless good cause is shown. Good cause may include possession of substantial wealth, children with day care expenses, special medical, educational, or psychological needs, and larger families.
(10) Basic child support must be allocated between the parents when a child stays overnight with the parent over 25 percent of the year. When this adjustment is sought, and the parents are not in agreement, the parent seeking the adjustment must provide evidence to demonstrate the parent's actual past involvement with the child. However, the support payment may not be reduced if there will be insufficient funds available to meet the basic needs of the child in the house receiving the support, or if the child is receiving AFDC payments.
(11) The presumptive amount of support must be determined according to the schedule. Deviations must be explained in writing and supported by evidence. When reasons exist for deviation, discretion must be exercised in considering the extent to which the factors would affect the support obligation.
(12) Reasons for deviation may include the possession of wealth, shared living arrangement, extraordinary debt, extraordinarily high income of a child, a significant disparity in the living costs of the parents due to conditions beyond their control, special needs of disabled children, and tax planning. The transfer payment amount may deviate if tax planning results in greater benefit to the child.
(13) When there are children from other relationships, the schedule must be applied to the mother, father and children of the relationship being considered. Deviations from the amount of support derived from this application may be based upon all the circumstances of both households. All income, resources, and support obligations paid and received must be disclosed and considered. Support obligations include children in the home and children outside of the home.
(14) The schedule is advisory and not presumptive for children who have attained the age of 18 and have completed their secondary education.*
(15) Wage income must be imputed for parents who are voluntarily unemployed or voluntarily underemployed. A parent will not be deemed underemployed as long as that parent is gainfully employed on a full-time basis. Income may not be imputed for an unemployable parent.
(16) There must be full disclosure of each parent's household financial information. The worksheets must be completed under penalty of perjury and filed with the court.
The parents must complete worksheets to calculate income and credits due and then use the table to determine the dollar amount of support.
* The law governing child support for children over 18 who want to attend college has developed in case law since 1926. The schedule did not supplant that case law. The courts have awarded child support for children over 18 who want to go to college, after considering a number of factors including the child's age, abilities, disabilities, expectations of the parties, the parents' resources, education level, and what opportunities the child would have had if the parents stayed together.
No statutory verification or accounting procedure exists to require that parents receiving support verify that the support received is spent on the children. No statutory mechanism exists for verification and reimbursement of day care, long distance transportation costs, or other extraordinary expenses.
A support order may be modified without a substantial change of circumstances not more than once a year if the order in practice works a severe hardship on a party or a child, if the support was based on the child's age and the child is no longer in that age category, if the child is still in high school and a need exists to extend the support beyond the child's 18th birthday or to add an automatic adjustment of support pursuant to court order.
The schedule for industrial insurance total disability benefits paid to injured workers includes a 2 percent increase for each child of the injured worker, up to five children. If the child is not in the custody of the injured worker, the percent of the benefits payable for the child is paid to the person having custody of the child under a child support order. There is no provision allowing the injured worker credit against his or her child support obligations for the amount of industrial insurance benefits paid to the child's custodian.
SUMMARY:
New mandatory statewide child support guidelines will take effect July 1, 1990. The existing schedule will be repealed effective July 1, 1990. The standards and table are incorporated into the Revised Code of Washington. The Washington State Child Support Commission will sunset July 1, 1990 so any changes to the schedule must be done by the Legislature.
The Table: The economic table's presumptive basic support obligation amounts are reduced by 5 percent across the board. This reduction is made because ordinary medical expenses are removed from the table's presumptive basic support amounts and will be add-ons to the basic support obligation.
Cap at Upper End of Table: The cap on the table remains at $7000 combined monthly income. The court still may not set support at an amount lower than the presumptive amount for combined monthly incomes of $7000, but may in its discretion set support at higher levels.
Cap at Lower End of Table: The child support ordered may not reduce the income of the parent making the transfer payment to an amount lower than the federal needs standard except for a mandatory minimum payment of $25 in support.
County by County Deviation from Table: Counties may still establish tables that deviate from the state's table by up to 25 percent for combined monthly incomes above $2500.
Gross Income Sources: The current sources of gross income are the same as the current schedule with the following changes: 1) The Veterans' Administration Veterans' Aid and Attendant Allowance shall not be included in gross income or be a reason to deviate; 2) mandatory overtime is included in gross income but voluntary overtime and nonrecurring overtime may be excluded in the court's discretion; 3) second job income in excess of full time employment may be excluded in the court's discretion; 4) pension benefits are included; 5) cash benefits pursuant to contract are included; and 6) spousal maintenance is included. The bill clarifies the existing law that income from a second spouse or cohabitant is not included in income for purposes of calculating the basic support obligation.
Deduction from Gross Income: Amounts that may be deducted from gross income are the same as the current standards with the following changes: 1) Amounts that are actually determined to be spousal maintenance may be deducted to the extent that they are actually paid; 2) child support payments for children of other relationships may be deducted; and 3) amounts actually paid into voluntary pension plans up to the federal IRA limit may be deducted if the contributions began prior to the commencement of the dissolution. In addition, the bill specifically provides that the court can order or the parties can agree which parent may take the federal income tax deduction for dependents.
Day Care, Long Distance Transportation, Extraordinary Expenses: As currently provided, day care, long distance transportation, and other extraordinary expenses are not included in the table but are to be added back on to the basic support obligation.
Deviations: Once the basic support obligation and each parent's proportionate share of that obligation is determined, the court may then consider whether appropriate reasons exist to deviate from the basic support obligation for one or both parents. The reasons to deviate, whether or not there are children from other relationships, include the following: possession of wealth, shared living arrangements, extraordinary debt that has not been voluntarily incurred, extraordinarily high income of a child, a significant disparity in the living costs of the parents due to conditions beyond their control, and special needs of disabled children. When there are children from other relationships, deviations shall be based on the total circumstances of both households and determined according to the reasons for deviations.
Postsecondary Education: The court may order postsecondary education support as provided under the current law with the following changes: The child must be actively enrolled in school and pursuing a course of study and in good academic standing as defined by the institution, or the support may be automatically suspended during the time of noncompliance. The court may not order support beyond the age of 23 except for exceptional circumstances such as physical, mental, or emotional disabilities. The court may in its discretion order that the payments be made to the parent who received support when the child was under 18, the educational institution, or the child.
Residential Credits: The parents still may reduce the transfer payment through residential credits as provided under the current standard.
Verification of Expenditures of Child Support: A parent obligated to pay support may move for an accounting of how the support is being spent. The moving parent must be current in all support payments and must be obligated to pay at least 50 percent of the support. If support is for one child, the parent must be obligated to pay $300 per month in support; for two children, $500, for three or more children, $660. The parent must file an affidavit setting forth facts demonstrating that the support is not benefiting the child directly or indirectly. The receiving parent is entitled to notice and a hearing. If the court determines at the preliminary hearing that reasonable cause exists to believe that the funds are being misspent, then the court can set a show cause hearing or order the parents to mediate the matter. The receiving parent may be required to produce receipts for the child up to six months prior to the hearing. If the court determines at the preliminary hearing that facts do not exist to support the motion the court shall award costs and statutory attorneys' fees to the receiving parent. If the court determines that the motion was brought in bad faith, for harassment, or was based on false statements of fact, the court may award reasonable attorneys' fees to the receiving parent. The court may award reasonable attorneys' fees to the moving party if the moving party prevails at the show cause hearing. A motion for an accounting may not be filed more than once every 12 months.
Reimbursement for Day Care, Transportation, Uninsured Health Care and Extraordinary Costs: Parents making payments for day care, uninsured medical expenses, transportation costs, and other extraordinary expenses, are entitled to reimbursement for the other parent's proportionate share of the expense. The parent responsible to reimburse the other parent is entitled to receipts to verify the expenditures. Reimbursement for transportation costs, uninsured health care costs, and other extraordinary expenses must be paid within 30 days of receiving the receipt. A parent to whom the reimbursement is owed may reduce the amounts to a sum certain and obtain a wage assignment order to collect the amounts due.
Modifications: All child support orders may be adjusted once every 24 months based upon the statutory formula and upon the income of the parents without showing a substantial change of circumstances. A party may move for modification any time based upon a substantial change of circumstances but if relief is granted, must then wait another 24 months to modify the decree again based upon the statutory formula and parental income. If a parent who is receiving a transfer payment receives a raise in income, that increase alone cannot form the basis for an increase in the other parent's obligation unless a modification is allowed upon a substantial change of circumstances. Parents who want to take advantage of the new schedule whose decrees are entered before the effective date of the act, may move for a modification after 12 months have expired from the entry of the decree or the latest modification. However, after the first modification under the act, the next modification without a substantial change in circumstances may not be sooner than 24 months.
Worksheets: The Administrator for the Courts shall develop new worksheets and instructions. The courts may not accept incomplete worksheets. The judge must sign a completed worksheet and include one in the court order.
Payments on Behalf of an Injured Worker: The amount paid from an injured worker's industrial insurance total disability benefits for children not in the injured worker's custody must be treated as if it were paid by the worker toward satisfaction of his or her child support obligation.
Appropriation: none
Revenue: none
Fiscal Note: available
Effective Date:The bill contains an emergency clause and takes effect immediately.
SUMMARY OF PROPOSED SENATE AMENDMENTS:
Economic Table: The Clark County child support economic table, which incorporates the Hayner amendment, is adopted statewide. The Hayner amendment allowed counties to reduce child support levels, above the $2,500 combined monthly income level, by up to 25 percent. The Clark County table or similar tables have been adopted in 18 judicial districts which include 23 counties.
Cap at Upper End of Table: The upper end of the table for combined monthly incomes is reduced from $7,000 to $5,000. The judge may award additional child support above the $5,000 level in cases with unusual or extraordinary circumstances.
County by County Deviation From Table: The Hayner amendment is repealed. Counties are not allowed to deviate from the adopted economic table.
Gross Income Sources: The gross income provisions which included pension benefits, contract related cash benefits and mandatory overtime are stricken. Gross income includes maintenance which is received.
Deductions from Gross Income: Deductions from gross income include: overtime pay, income derived from a second job above 40 total hours per week, nonrecurring bonuses, maintenance which is actually paid, and up to $2,000 per year in IRA payments for self-employed persons who do not have a mandatory pension plan.
Residential Credits: The provision allowing residential credits, after the child spends 90 days with the parent obligated to make the transfer payment, is deleted. The court may, in its discretion, deviate from the economic table if the child spends a significant amount of time with the parent paying child support.
Second Family Deviations: The court shall consider deviating from the economic table when the parties have children from other relationships. The court may use the "Blended Family Formula Approach" as recommended by the Washington State Child Support Commission.
Stepparent Support of Stepchildren: Under present law a stepparent is obligated to support a stepchild until termination of the marriage or death. A stepparent's obligation to support a stepchild terminates upon the filing of a petition for dissolution of marriage or the filing of a petition for legal separation.
DSHS Modifications: DSHS may not modify a child support order which varies from the economic table by more than 25 percent if reasons for the deviation are included in the order.
Modifications: If the court modifies a support order by more than 30 percent, the court may stagger the change over a 12-month period.
Verification of Expenditures of Child Support: The child support accounting provisions are deleted.
Reimbursement Procedure: The provisions providing reimbursement, verification, and wage assignments for daycare, transportation, uninsured health care and extraordinary costs are eliminated.
An effective date of July 1, 1990 is provided.
Senate Committee - Testified: Representative Marlin Appelwick, prime sponsor; Helen Donigan, Child Support Schedule Commission; Lonnie Johns-Brown, NOW; Kimberley Prochnau, Washington State Bar Association, Family Law Sec. Board; Larry Cenotto, Bob Hoyden, POPS; Laura R. Gibson, Custodial Parent Support Enforcement; Michele Radosevich, NW Women's Law Center; Bill Harrington, Fathers Rights