Thursday, December 27, 2012

The 2013 Michigan Child Support Formula Manual

Back in January 2008, the Friend of the Court Bureau of the State Court Administrator's Office published a fairly comprehensive set of changes to the Michigan Child Support Formula.  Next week, their new child support manual comes out; the first since those 2008 changes.  This post covers all the significant changes that take effect on January 1st.

The 2013 Michigan Child Support Formula Manual is available online; you can access the manual by simply clicking this link.  As set forth in the manual, here is a summary of the changes scheduled to take place:

In the first significant change referenced above, section 1.04(E), a series of deviation factors are listed for consideration when strict application of the formula would generate inequities; the new factors are:

(18) A child in the custody of a third-party recipient spends a significant number of
overnights with the payer that causes a significant savings in the third party’s
(19) The court ordered nonmodifiable spousal support paid between the parents before
October 2004.  
(20) When a parent’s share of net child care expenses exceeds 50 percent of that
parent’s base support obligation calculated under §3.02 before applying the
parental time offset.
The most significant change in the 2013 MCSF Manual lies in the treatment and explanation of the self-employed individual or business owner.  Section 2.07(E) essentially has been re-written to include an introductory statement of tenets to consider when attempting to calculate a business owner's or self-employed individual's income.

The basic "add-backs", however, remain the same.  Such add-backs include things like: rent paid by the business to the owner-payor; depreciation allowances; home office expenses; entertainment expenses; travel expenses; and vehicle allowances.

While the authors of the manual(s) would not agree, we here at this blog perceive a slight editorial shift in the new manual, going from a pro-payor to a pro-payee treatment of such individuals.

Although the exact language of the income and deduction sections [2.01(C) and 2.07(E)] has been  slightly modified, the effect remains that: a) income includes retirement contributions from either the employee parent payor or the employer; and b) an employee parent deducts up to 5.5% of these contributions from the income calculation.

The 2008 MCSF Manual set the minimum child support obligation at $25 per month; this has been removed in the new manual.

And finally, a better explanation is offered in the 2013 MCSF Manual relative to the treatment of a payor's supplemental contribution to the children's benefit with items such as health care savings accounts or flexible benefit plans frequently offered by employers.

With our headquarters in Oakland County, Michigan, and a proven track record of case management in all the adjacent counties, we provide a free consultation for family court litigants that may have issues arising due to the changes in the MCSF.


Johnson said...

This blog is very informative about child support formula. Thanks for sharing valuable information.

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Anonymous said...

FYI the wording used here regarding the allowable 5.5% deduction of retirement contributions should be clarified to state that contributions up to 5.5% of gross income can be deducted, not 5.5% of the actual contribution amount.