Child support in Maryland (and 36 other states) is centered on the Income Shares Model. This is based on the concept that children should receive the same proportion of parental income that they would have received if the parents lived together. That amount is related to the level of household income and Number of children. Factors include food, housing, transportation, clothing, $250 in annual medical expenses for each child, and miscellaneous items that are needed and provided for by their parents. This amount is expressed by the child support guidelines.
Income and Calculations of Support
Calculations for child support in Maryland are based on gross income and includes income from any source. These include employee wages, and businesses owned. It also encompasses pensions and other retirement, estates and trust, social security, tax refunds, awards and verdicts, severance pay, and alimony received. In-kind payments made by an employer that reduce personal living expenses are considered as well. Adjusted gross income is calculated by considering alimony that is intended to finance the support-receiving parent (aka “obligee”) and pre-existing child support. From here, adjustments are made for work-related childcare, health insurance, and extraordinary medical expenses (over $250 per child per year), transportation to/from each parent’s home, and private schooling for special education needs. In Maryland, If monthly combined gross income is above $15,000 the amount may be increased at the discretion of the court.
When earning capacity is higher than actual income, it may be taken into account. Each parent’s contribution allows for a “self-support reserve” that represents the poverty level of one person. Additionally, there is an assumption that the children will spend up to 35% of their time with the support-paying (aka “obligor”) parent.
Parents’ Individual Payments
The custodial parent receives child support in Maryland. If shared custody, the parent with the higher income pays the child support. When the parents share custody, if the support-paying parent has more than 35% of overnights with the children, adjustments are made.
Example 1: Sole Custody
Consider the hypothetical case of Keith and Audrey. Keith is the primary physical custodian of their child and has a monthly income of $6,000. Audrey has a gross monthly income of $8,000. Alimony will be awarded to Keith at $500 per month. They have three children. Audrey pays $300 per month for the children’s health insurance and each parent pays $600 per month for work-related child care.
Keith and Audrey add their monthly incomes together to get $14,000. Keith divides his monthly adjusted earnings of $6,500 by $14,000 to get 0.4643, meaning he earns 46.43 percent of the combined income. Audrey divides her adjusted earnings of $7,500 by $14,000 to get 0.5357, or 53.57 percent. In this case, the child support obligation for combined incomes of $14,000 with three children is $3,154 per month. Adding in the expenses for health insurance that Audrey pays and each parent’s child care expenses, the total child support is now $4,654.
Keith’s share of support is 46.43% of $4,654 or $2,160.85. Audrey’s share is 53.57% of $4,654 or $2493.15. Taking into account the direct pays for health insurance and child care, Keith’s child support is $1560.85 and Audrey’s is $1593.15. Therefore, Audrey will pay Keith $1593.15 per month for child support in addition to the $500 per month of alimony.
Example 2: Shared Custody
Audrey has the children for three nights per week with the kids. As such, we calculate she has the children for 156 of 365 nights per year. When parents share custody, the State increases the combined child support obligation by 1.5 times. Therefore we take the child support obligation for combined incomes of $14,000 with three children of $3,154 per month and multiply it by 1.5 to get the new obligation of $4,731. Since Keith has the children 57.26% of the time, his obligation is $2196.60 and Audrey’s is 42.74% or $2534.40.
First, we look what each parent needs to pay the other for time with other parent by multiplying the respective support obligations by the other parent’s percentage of time. Keith will pay Audrey 42.74% of his obligation of $2196.60, or $938.83, and Audrey will pay Keith 57.26% of her obligation of $2534.40, or $1451.20. The net is that Audrey will pay Keith $512.37.
Next we need to look at the direct payment adjustments based on each parent’s respective time with the children. For childcare, Keith will pay 46.43% and Audrey 53.57% of $1200. The difference between the two is that Audrey will pay Keith $42.84 monthly for childcare. Likewise, Keith must pay Audrey $139.29 for his portion of the health insurance. The net is that Keith will pay $96.45 for his portion of these expenses.
Finally, we subtract $96.45 from $512.37. Audrey will pay Keith $415.92 for child support in addition to $500 per month for alimony. This a significant reduction for the shared custody allowance.
What does it all mean?
If this seems complicated, it sort of is. The calculators provided by the state, though, make it much easier to see. Try it for yourself.
Read more on divorce financial considerations here.
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