Guideline 1. Preface

Commentary

History of Development.

In June of 1985, the Judicial Reform Committee (now the Judicial Administration Committee) of the Judicial Conference of Indiana undertook the task of developing child support guidelines for use by Indiana judges. While the need had been long recognized in Indiana, the impetus for this project came from federal statutes requiring guidelines to be in place no later than October 1, 1987. P.L. 98 378. Paradoxically, guidelines did not need to be mandatory under the 1984 federal legislation to satisfy federal requirements; they were only required to be made available to judges and other officials with authority to establish child support awards. 45 CFR Ch. III, § 302.56.

The final draft was completed by the Judicial Reform Committee on July 24, 1987, and was presented to the Judicial Conference of Indiana Board of Directors on September 17, 1987. The Board accepted the report of the Reform Committee, approved the Guidelines and recommended their use to the judges of Indiana in all matters of child support.

Family Support Act of 1988.

On October 13, 1988, the United States Congress passed the "Family Support Act of 1988," P.L. 100 485 amending the Social Security Act by deleting the original language which made application of the Guideline discretionary and inserted in its place the following language:

"There shall be a rebuttable presumption, in any judicial or administrative proceeding for the award of child support, that the amount of the award which would result from the application of such guidelines is the correct amount of child support to be awarded. A written finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate in a particular case, as determined under criteria established by the State, shall be sufficient to rebut the presumption in that case." P.L. 100 485, § 103(a)(2).

The original Guidelines that went into effect October 1, 1987 and their commentary were revised by the Judicial Administration Committee to reflect the requirement that child support guidelines be a rebuttable presumption. The requirement applies to all cases where support is set after October 1, 1989, including actions brought under Title IV D of the Social Security Act (42 U.S.C.A. § 651 669). Also, after October 1, 1989, counties and individual courts may not opt to use alternate methods of establishing support. The Indiana Child Support Guidelines were required to be in use in all Indiana courts in all proceedings where child support is established or modified on and after October 1, 1989.

Periodic Review of Guidelines and Title IV D Awards.

The "Family Support Act of 1988" also requires that the Guidelines be reviewed at least every four years "to assure their application results in the determination of appropriate child support award amounts." P.L. 100 485, § 103(b). Further, each state must develop a procedure to ensure that all Title IV D awards are periodically reviewed to ensure that they comply with the Guidelines. P.L. 100 485, § 103(c).

Compliance With State Law.

The Child Support Guidelines were developed specifically to comply with federal requirements, as well as Indiana law.

Objectives of the Indiana Child Support Guidelines.

The following three objectives are specifically articulated in the Indiana Child Support Guidelines:

1. To establish as state policy an appropriate standard of support for children, subject to the ability of parents to financially contribute to that support. When the Guidelines were first recommended for use by the Indiana Judicial Conference on September 17, 1987, many courts in the state had no guideline to establish support. Many judges had expressed the need for guidelines, but few had the resources to develop them for use in a single court system. The time, research and economic understanding necessary to develop meaningful guidelines were simply beyond the resources of most individual courts.

2. To make awards more equitable by ensuring more consistent treatment of people in similar circumstances. This consistency can be expected not only in the judgments of a particular court, but between jurisdictions as well. What is fair for a child in one court is fair to a similarly situated child in another court.

3. To improve the efficiency of the court process by promoting settlements and giving courts and the parties guidelines in settling the level of awards. In other words, when the outcome is predictable, there is no need to fight. Because the human experience provides an infinite number of variables, no guideline can cover every conceivable situation, so litigation is not completely forestalled in matters of support. If the Guidelines are consistently applied, however, those instances should be minimized.

Economic Data Used in Developing Guidelines.

What does it take to support a child? The question is simple, but the answer is extremely complex. Yet, the question must be answered if an adequate amount of child support is to be ordered by the court. Determining the amount of spending attributable to children is complicated by intertwined general household expenditures. Rent, transportation, and grocery costs, to mention a few, are impossible to accurately apportion between family members. In developing these Guidelines, a great deal of reliance was placed on the research of Thomas J. Espenshade, (Investing In Children, Urban Institute Press, 1984) generally considered the most authoritative study of household expenditure patterns. Espenshade used data from the 1972 and 1973 Consumer Expenditure Survey, and from that data estimated average expenditures for children present in the home. This methodological approach, known as the Engel methodology, is based upon estimates of how household spending on food as a percent of total spending varies with the number of children and total spending of the household. Espenshade's estimates demonstrate that amounts spent on the children of intact households rise as family income increases. They further demonstrate at constant levels of income, expenditures on children decrease for each child as family size increases. These principles are reflected in the Guideline Schedules for Weekly Support Payments, which are included in the Indiana Child Support Guidelines. By demonstrating how expenditures for each child decrease as family size increases, Espenshade should have put to rest the previous practice of ordering equal amounts of support per child when two or more children are involved.

Subsequent guidelines reviews have considered more current economic studies of child-rearing expenditures using more recent survey data and alternative methodologies to allocate the family’s spending to children (e.g., Mark Lino, Expenditures on Children by Families: 2006 Annual Report, United States Department of Agriculture, 2007; David Betson, State of Oregon Child Support Guidelines Review: Updated Obligation Scales and Other Considerations, report to State of Oregon Department of Justice, 2006). While the Engel methodology was initially used to develop guidelines schedules, it is based upon the assumption the economies of scale in food consumption will also reflect economies in scale in other spending.

An alternative methodology is the Rothbarth approach. This approach is based on the assumption the amount of spending on children can be inferred by examining how the parents reduce spending on themselves as the number of children in the family increases. The Rothbarth methodology using the 2013 to 2019 Consumer Expenditure Survey results in spending levels which more accurately reflect the direct estimates of child spending.

In 2009, estimates of child spending suggested at high incomes (above $4,000 combined weekly incomes) spending on children leveled off while the child support schedule significantly declined. The Weekly Support Schedule for combined income more than $4,000 was changed to reflect the findings of the more current data and estimates of spending. The 2023 guideline review found estimates of spending by intact families on children were significantly larger than the current schedule. Beginning in 2024, the Weekly Support schedule was changed to reflect these more recent estimates at all levels of income.

Income Shares Model.

After review of five approaches to the establishment of child support, the Income Shares Model was selected for the Indiana Guidelines. This model was perceived as the fairest approach for children because it is based on the premise that children should receive the same proportion of parental income after a dissolution that they would have received if the family had remained intact. Because it then apportions the cost of children between the parents based on their means, it is also perceived as being fair to parents. In applying the Guidelines, the following steps are taken:

1. The gross income of both parents is added together after certain adjustments are made. A percentage share of income for each parent is then determined.

2. The total is taken to the support tables, referred to in the Indiana Guidelines as the Guideline Schedules for Weekly Support Payments, to determine the total cost of supporting a child or children.

3. Work related child care expenses and the weekly costs of health insurance premiums for the child(ren) are then added to the basic child support obligation.

4. The child support obligation is then prorated between the parents, based on their proportionate share of the weekly adjusted income, hence the name "income shares."

The Income Shares Model was developed by The Institute for Court Management of the National Center for State Courts under the Child Support Guidelines Project. This approach was designed to be consistent with the Uniform Marriage and Divorce Act, the principles of which are consistent with IC 31 16 6 1. Both require the court to consider the financial resources of both parents and the standard of living the child would have enjoyed in an intact family.

Gross Versus Net Income.

One of the policy decisions made by the Judicial Administration Committee in the early stages of developing the Guidelines was to use a gross income approach as opposed to a net income approach. Under a net income approach, extensive discovery is often required to determine the validity of deductions claimed in arriving at net income. It is believed that the use of gross income reduces discovery. (See Commentary to Guideline 3A). While the use of gross income has proven controversial, this approach is used by the majority of jurisdictions and, after a thorough review, is considered the best reasoned.

The basic support obligation would be the same whether gross income is reduced by adjustments built into the Guidelines or whether taxes are taken out and a net income option is used. A support guideline schedule consists of a column of income figures and a column of support amounts. In a gross income methodology, the tax factor is reflected in the support amount column, while in a net income guideline, the tax factor is applied to the income column. In devising the Indiana Guidelines, an average tax factor of 21.88 percent was used to adjust the support column.

Of course, taxes vary for different individuals. This is the case whether a gross or net income approach is used. Under the Indiana Guideline, where taxes vary significantly from the assumed rate of 21.88 percent, a trial court may choose to deviate from the guideline amount where the variance is substantiated by evidence at the support hearing.

Deviation from the Rebuttable Presumption.

The Child Support Rules create a rebuttable presumption that the amount of the award which would result from the application of the Child Support Guidelines is the correct amount of child support to be awarded. The creation of a rebuttable presumption recognizes the existence of factors or circumstances which are unable to be incorporated in the formulas used under the Guidelines. In other cases, strict adherence to the Guidelines could lead to harsh and unreasonable results. If a judge believes in a particular case application of the Guideline amount would be unreasonable, unjust or inappropriate, a finding must be made that sets forth the reason(s) supporting the deviation from the Guideline amount. The finding need not be as formal as Findings of Fact and Conclusions of Law; the finding need only articulate the judge's reasoning. For example, if under the facts and circumstances of the case, the noncustodial parent would bear an inordinate financial burden, the following finding would justify a deviation:

"Because the noncustodial parent suffers from a chronic medical condition requiring uninsured medical expenses of $397.00 per month, the Court believes that setting child support in the Guideline amount would be unjust and/or inappropriate under the circumstances. The Court finds support should be set in the amount of $___per week."

Any child support order deviating from the Guideline must include the Child Support Obligation Worksheet even if the support order is zero dollars ($0.00).

Agreed Orders submitted to the court must also comply with the "rebuttable presumption" requirement; that is, the order must recite why the order deviates from the Guideline amount. A reason for the deviation must be included; a simple statement the parties agree to the deviation is not sufficient under the Guidelines. A copy of the Child Support Obligation Worksheet setting forth the Guideline amount must be included.

1. Phasing in Support Orders.

Some courts may find it desirable in modification proceedings to gradually implement the Guideline order over a period of time, especially where support computed under the Guideline is considerably higher than the amount previously paid. Enough flexibility exists in the Guidelines to permit that approach, as long as the judge's rationale is explained with an entry such as:

"The Guideline's support represents an increase of 40%, and the court finds that such an abrupt change in support obligation would render the obligor incapable of meeting his/her other established obligations. Therefore, the Court sets support in the amount of $_____ and, on October 1, 20___, it shall increase to $_____ and, on September 1, 20__, obligor shall begin paying the Guideline amount of $_____."

2. Situations Calling for Deviation.

An infinite number of situations may persuade a judge to find the Guideline amount to be unjust or inappropriate and to deviate from the Guideline amount in awarding child support. For illustration only, and not as a complete list, the following examples are offered:

• One or both parties pay union dues as a condition of employment.

• A party provides support for an elderly parent.

• The noncustodial parent has extraordinary personal medical expenses.

• A parent is a member of the armed forces and the military provides housing.

• The parents share the controlled expenses of the child.

• The parent is on work release or a similar correctional program requiring payment of fees.

• The children spend different numbers of overnight parenting time with the noncustodial parent.

• The custodial or noncustodial parent incurs significant travel expense in exercising parenting time.

It is impossible to imagine every possible situation which may affect the determination of child support and to prescribe a specific method of handling each of them. Practitioners must keep this in mind when advising clients and when arguing to the court. Many creative suggestions will undoubtedly result. All attempts to deviate from the Guideline amount must include submission of the Child Support Obligation Worksheet and reason(s) why use of the Guideline amount is unjust or inappropriate. Judges must also avoid the pitfall of blind adherence to the computation for support without giving careful consideration to the variables requiring a different result in order to do justice.