Nov. 16, 2016 – In September 2015, an advisory committee submitted a report to the Wisconsin Department of Children and Families suggesting a number of changes to Wisconsin Child Support Guidelines. Few things have as much impact on the practice of family law as the child support guidelines. Therefore, when revisions are suggested, they must be very carefully considered.
While the proposed rule changes are still awaiting comments, including an economic impact analysis and public hearing, eventually these changes are expected to be submitted to the legislature as a proposed rule. While many of the changes are rather benign, there are a few that merit comment and close scrutiny. A couple of these proposed changes should not be adopted.
High-income Payors
First, while the issue of high-income payors affects only a very small number of child support cases, due to the political nature of the rulemaking process and political power of high-income payors, these rules take up an inordinate amount of time and attention. The proposal would maintain the current formula, allowing a reduction in the guideline percentages that apply to income between $84,000 and $150,000 per year and another reduction for income over $150,000 per year.
Gregg Herman is a family law attorney with Loeb & Herman S.C. His primary office is in Milwaukee. Gregg is the co-editor of the System Book for Family Law, published by the State Bar of Wisconsin PINNACLE® and is a former chair of the State Bar and American Bar Association family law sections. Follow Gregg’s opinions on his family law blog.
In addition, however, there would be a third category where child support would be reduced to 60 percent of the current standard for a payor’s gross income between $150,000 and $300,000 per year and a further reduction between $300,000 and $500,000 per year. The revised guidelines would also specifically provide discretion to the court to cap child support for income over $500,000 per year.
The proposal seems to codify what is current practice, anyway. The current rules allow a deviation from guidelines if their application would be unfair to the child or to either parent. For extremely high-income payors, it does not make sense to apply the guidelines above a certain amount of income. There is no case law, and extremely limited anecdotal evidence, for what that level income should be.
Therefore, establishing an explicit amount, as the proposed rule revision does, would allow a higher degree of predictability while still allowing courts discretion to deviate in individual cases. Most importantly, the court would maintain discretion in individual cases to order income above and beyond a child’s immediate needs to be put into a trust for the child’s future.
Both of these effects are good ones. First, predictability leads to settlement as parties are less likely to litigate if they know the eventual outcome. Resolution is always better for children as they do not benefit by their parents’ fighting. Second, putting money aside for the children’s future benefits them as well, especially if there is never a guarantee that the same level of income will continue in the future.
Variable Costs
A more impactful change would prohibit variable costs from being rolled into the child support order. While the current guidelines require a court to order each party to pay variable costs when using the shared time formula, case law allows a court to set child support at a higher amount and then allocate all (or most) variable costs to the payee.1
The value of this case is to avoid fighting and litigation (note a theme here?). Intact families have enough difficulty agreeing on costs for children over basic care, and it does not get any easier when the parties are divorced. So, Rumpff allows a court to use a simpler method on the theory that the less parties have to ask the other for money, the less they would fight. That makes a lot of sense and should be left alone.
Shared-time Formula
Finally (although there are other proposed changes), one proposal would provide more examples of “equivalent care” in determining the application of the shared-time formula. Once again, this proposal fails to recognize the value of avoiding litigation. Most courts calculate the shared-time formula by counting overnights, rather than trying to calculate “equivalent care,” whatever that means.2 Adding definitions of “equivalent care” is not likely to help. Overnights, on the other hand, are easy to understand and to count.
While the proposed changes to the high-income formula make sense, the other proposals discussed in this column seem to be solutions in want of a problem. It’s bad enough to violate the axiom “if it isn’t broke, don’t fix it.” It’s worse to ignore the axiom to “do no harm.”
Endnotes
1 Rumpff v. Rumpff, 2004 WI 197, 276 Wis. 2d 606, 688 N.W.2d 699.
2 See: Maritato v. Maritato, 2004 WI App 138, 275 Wis. 2d 252, 685 N.W.2d 379.
