Presenting Your Case
State Uses the
Percentage of Obligor Income (Wisconsin) Model
Each state implements this model a little differently. A lawyer
and economist are normally needed to customize the following
for your state, as well as your case. This is a general discussion
This is the one type of guidelines that the federal
government recommended against. A Federal Advisory Panel on Child
Support reviewed several types of guidelines. It recommended that
states enact either the Income Shares model or Delaware-Melson model.
Both the these models received favorable recommendations since they
more closely followed family spending patterns on child costs and
generally took into account the self-sufficiency needs of low-income
obligors. (Though even they suffer from many similar flaws, and
this recommendation does not mean they actually do meet the government’s
From the 1987 Federal Development of Guidelines
The Advisory Panel recommends that states use
either the Income Shares model or Delaware-Melson formula as the
basis for their child support guidelines. [page I-15].
Second, unlike some approaches [such as percent
of obligor models], both the Income Shares and Melson formula
count income of both parents in determining the amount of child
support awards. [page I-16].
Third both the Income Shares model and the Melson
formula allow for the subsistence needs of each parent. It is
neither realistic nor appropriate to expect that a parent can
or should pay substantial amounts of child support until providing
for his or her own basic needs. [page I-16].
The Wisconsin standard is designed to act like
an income tax. With only two primary parameters, gross income
and number of children, the Wisconsin standard is intended to
be applied automatically by employers under a statewide holding
system. However, the administrative benefit of simplicity may
be obtained at the price of loss of equity because it does not
provide treatment for certain key factor (e.g. custodial parent
income, child care expenses). Because the Wisconsin standard is
designed as a constant percentage of gross income, it also has
the effect of setting orders as an increasing percentage of net
income as obligor income rises. This effect is contrary to the
economic evidence on actual child rearing expenditures.
Origin and Original Intent
of the Percent of Obligor Income Model
Obligor-only child support guidelines in the U.S. are based on those
developed for the State of Wisconsin. The Wisconsin regulatory code
specifically points to the origins. Chapter HSS 80 of the Wisconsin
State Register, January 1987, No. 373, is entitled, “Child
Support Percentage of Income Standard.” This chapter's introduction
explains the alleged academic underpinnings for this particular
obligor only child support model. As seen in Section HSS
The percentage standard established in this
chapter is based on an analysis of national studies, including
a study done by Jacques Van der Gaag as part of the Child Support
Project of the Institute for Research on Poverty, University
of Wisconsin, Madison, entitled “On Measuring the Cost
of Children,” which disclose the amount of income and
disposable assets that parents use to raise their children.
This underlying study explained how these percentages
were only to be used for very limited circumstances--those of recovering
welfare payment made to a custodial parent. As discussed below,
it is clear from the underlying study that these guidelines were
never intended nor designed for use in general child support cases.
Wisconsin’s Guidelines Were
Never Intended by the Original Researchers to Apply to Situations
Other than Low Income or Low Benefits
Based on early papers providing the technical foundations for Wisconsin’s
child support guidelines, the guidelines were originally developed
for only welfare situations. (In research papers, the child support
obligation is described as a “tax” since it was for
automatic with-holding as with other taxes.) The intent was for
both parents’ income to be part of the formula and that there be
a maximum level of benefits (child support). Wisconsin’s child support guidelines originally were intended
to be applied to only very limited circumstances. The concept was
to exempt some income for basic living needs, to require the custodial
parent to pay for any difference between guaranteed welfare benefits
and what the non-custodial parent could pay, and to cap
the welfare benefits at the level of welfare payments so that the
“tax” (child support obligation) was regressive for
the obligor (reduced as a percentage of
income as income rose, providing for normal incentive to earn).
It is also well documented that the original concept
of Wisconsin’s child support plan was based on a modest level of
publicly guaranteed benefits to the child with the state’s objective
to recovery the costs of those benefits from both parents as much
as was practical. These guidelines were never intended to be extended
beyond low-income situations or beyond low benefit guarantees.
Additionally, under the tax code that existed at
the time when these welfare guidelines were designed, low-income
obligors had a very, very low tax rate so using gross income was
a reasonable simplification. They were never intended to be applied
to cases in which the obligor paid a notable amount in income taxes.
Importantly, it was assumed the mother – the custodial parent
– did not have any income. This was why the welfare
guideline was obligor-only: the other parent's income could be factored
in but it would be zero.
In its rush to comply with the Family Support
Act of 1988, the Wisconsin legislature delegated guideline authority
to the Wisconsin Department of Health and
Social Services which in turn administratively chose to use welfare
percentages in non-welfare cases. Essentially, Wisconsin and states
adopting their guidelines for general use
conflict with the underlying economic study and originally intended
use, as indicated by the very study on which it is based.
Also, a federal advisory panel recommended that only use guidelines
that take into account both parents' incomes.
The Wisconsin Guidelines Were Intended to be Applied
to the Specific Circumstances of Welfare with the Following Economic
- The household is a low-income household. For the study, the
households (both parents) averaged annual gross income
of $12,000 in 1982 dollars. In year 2001 dollars, this would
be household income of $22,023. The underlying study specifically
states that at higher incomes, the applicable percentage should
decline. The study also assumed the percentage would be applied
only after setting aside a self-support reserve.
- The custodial parent is assumed to care for the children
and not earn any income outside the home.
- The non-custodial parent is the sole income earner and the
percentages applied to the non-custodial parent’s income
are based on tax law of 1982. Under the tax code in which the
percentages are derived, the non-custodial parent that provided
over half of the child’s support would receive use of
all child income tax benefits.
- The low-income characteristic also includes the fact that
the guidelines were to be applied to income earners paying little
or no income tax. Hence, under the appropriate low-income application,
there is no need to take into account differences between gross
income and net income.
- The guideline percentages were derived based on the assumption
that the non-custodial parent is absent and the child(ren) is/are
with the custodial parent 100 percent of the time. The non-custodial
parent is assumed to not have incurred the fixed costs of providing
housing for the child(ren) and is assumed to not incur other
child costs while the children are in the non-custodial parent’s
care. Obligor-only guidelines assume there is no need to provide
support for the child(ren) while in
the care of the non-custodial parent.
- The guideline percentages were to be applied with the amount
of the award limited to the size of the welfare payments to
the custodial household.
The underlying study set a low ceiling on the amount of income
on which the percentages would be applied.
Essentially, these guidelines are economically inappropriate for
almost all cases since these circumstances rarely occur. Indeed,
case circumstances generally diverge sharply from these conditions,
which should be a basis for rebutting the applicability of the
guidelines. If case circumstances do not fit the assumed circumstances
of the underlying economic basis of the guideline, then the existence
of the differing circumstances rebut the appropriateness of the
This guideline is designed only for welfare cases
and only when other additional conditions are met. To rebut the
economic appropriateness of the presumptive award one need only
show that the following or most of the following are not applicable
to the case at hand:
The combined gross income of the parents
is $_______ and is significantly above the underlying study's
assumption that the household is low income ($12,000 in combined
year 1982 income, or $21,023 in year 2001 combined gross income).
The household is not low income and has child spending patterns
different from low income households: the child cost percentages
The custodial parent earns $______ outside
the home, in contrast to the underlying assumption of no income
for the custodial parent.
The custodial parent receives the child-related
tax benefits, in contrast to the guideline assumption that the
non-custodial parent receives any tax benefits.
The non-custodial parent is in a relatively
high tax bracket, in contrast to the underlying assumption of
a low income tax burden. State the non-custodial parent's marginal
tax rate (federal, state, Social Security, and Medicare).
The non-custodial parent has ___ percent
of the total parenting time while the cost tables assume the
non-custodial parent has no parenting time. Equal duty of support
standards require that the custodial parent share the non-custodial
parent's child costs.
The current case is not a welfare case. The
percentages are not intended to be applied beyond the amount
of obligor income needed for recovering a welfare payment made
to the custodial parent.
One should provide an alternative to the presumptive
award. Guideline Economics offers and uses the
model to derive one that is based on appropriate economic
assumptions and principles. Show that the difference between the
presumptive award and the cost-based award (including tax benefits
as cost offsets) would provide the custodial parent with a profit
of $______ above the actual costs of raising the child(ren). Show
the dramatic difference in after-tax, after-child support income
for each of the parents for the presumptive award and for the
award, and then assert that the presumptive award is unjust and