The Proposed Minnesota Child Support Reform Legislation A Comparison Between and Minnesota's Proposed Shared Responsibility Child Support Guidelines By R. Mark Rogers Child Cost Tables For the guidelines, underlying data are from the U.S. Department of Agriculture (USDA) and from the U.S. Department of the Interior. Data are for single-parent households when possible. Data are by component cost categories (such as food, clothing, etc.) with all components except housing from the USDA. For the housing component, the USDA uses per capita estimates for child costs. This dramatically overstates the children's share of housing costs. The model substitutes housing data from the U.S. Department of the Interior to include only the children's share of housing costs. The Shared Responsibility guidelines use only USDA data and significantly overstate the level of child costs.  Studies have shown that the cost levels in the Shared Responsibility tables are so excessive that a custodial parent with moderately lower gross income than the non-custodial parent ends up with a substantially higher standard of living than the non-custodial parent. What income level should be used to determine the appropriate child support? For divorced households, there are two households' worth of adult overhead. This reduces the total amount of income left for spending on all other items-including child costs. Therefore, the appropriate target standard of living for the children is the average of the two households' standard of living.  In turn, the economically appropriate income to use is the average income of the two parents.  The method uses average income for the "look up" value in the child cost tables.  In contrast, the Shared Responsibility guidelines use combined income. Using combined income will overstate available income and lead to an overstated burden for the obligor. The obligee will have an understated share of the child cost burden by having the obligor cover a portion of the obligee's adult overhead in the guise of child support. Use of combined income is only appropriate for intact households. Child-Related Tax Benefits Child-related tax benefits offset some of the out-of-pocket expenses of raising children. These benefits for the custodial parent include head of household status for deductions, child exemptions, and child credits. Typically, child-related tax benefits are worth $200 to $300 extra in after-tax income per month and often can be as high as $400 per month. The guidelines explicitly treat the child-related tax benefits as cost offsets. If the tax benefits are not part of the child support calculation, then the obligor is forced to pay a second time for what the government has already paid once. The Shared Responsibility guidelines do not acknowledge the very large cost offsets that custodial parents receive related to custody of the children. Sharing Child Costs in Each Parent's Household Generally, child costs occur in both parents' households. The guidelines explicitly recognize this and require both parents to contribute to the other parent's child costs in proportion to their ability to support the children. This approach is necessary to meet equal protection standards. The Shared Responsibility guidelines ignore the costs of the children in the second parent's household. If fact, the Shared Responsibility guidelines pretend that the custodial parent always has all of the child costs. This is assumed even when the other parent has essentially child costs equal to those of the primary custodian. Under Shared Responsibility guidelines, the obligor parent is forced to pay for child costs twice in most circumstances. Self-Support Reserves Child support guidelines need to determine each parent's ability to support their children. The ability to support is the amount of income available above the income needed to provide that parent's basic living needs. sets this self-support reserve at a moderate level for both parents — at 133% of the federal poverty level (as recommended by the latest Federal advisory panel). Only the portion of income above that level is considered for the sharing and covering of child costs. The children's support is then determined by available income of the parents. But under the Shared Responsibility guidelines, the self-support level for the custodial parent is set not just for the adult's self-support but for the adult plus the number of children. This is set for the same dollar amount (according to the number of children) regardless of how much a share of the parenting time the non-custodial parent has the children. There is no similar adjustment for the non-custodial parent for covering minimal child costs required by the non-custodial parent when the children are in the care of the non-custodial parent. Minimum Obligation requires no minimum contribution by either parent if that parent is below the self-support level: the other parent is expected to pick up all of the child costs. If that is not possible (if both parents have no current ability to support), then the state welfare agency is expected to provide for the children's necessities. This is consistent with the intent and economic need of a self-support reserve. The Shared Responsibility guidelines set a minimum presumptive award for the non-custodial parent even when the non-custodial parent has no ability to support. The Shared Responsibility guidelines do not set a minimum contribution for the custodial parent. This violates equal protection standards. Summary At every opportunity, the Shared Responsibility guidelines set into the child support formula a lower standard of responsibility for the custodial parent. The outcome is a grossly exaggerated burden on the obligor and a financial windfall for the custodial parent.  The guidelines set equal standards of responsibility for both parents. It accurately estimate child costs in each parent's household, determines net child costs after deducting child-related tax benefits, and share the net costs based on each parent's ability to support. The Shared Responsibility guidelines overestimate child costs, assume all child costs occur only in the primary household, ignore very large cost offsets from child-related tax benefits, and do not share the child costs in proportion to each parent's ability to support.