June 20, 2018 – Starting July 1, the standard for determining child support will change in Wisconsin, as new rules by the Department of Children and Families create new requirements for the determination of “variable costs” in shared placement cases.

Changes to Wisconsin Admin. Code Chapter DCF 150 makes numerous changes in addition to the requirements for determining variable costs. This article provides background on Wisconsin’s Child Support Guidelines and explains the changes.

Current Standard

Variable costs, under DCF 150.02(29), are “the reasonable costs above basic support costs incurred by or on behalf of a child, including but not limited to, the cost of child care, tuition, a child’s special needs, and other activities that involve substantial cost.”

The current standard requires parties to share variable costs in proportion to the amount of time they had the children. This standard often results in one parent unilaterally making decisions to incur costs that the other parent is proportionately responsible for paying.

As child support agencies do not have the authority to enforce variable cost orders, these orders often are a source of litigation between the parties. The new rule permits parents in shared placement cases to argue for application of the shared time formula based on significant blocks of time spent with the children that do not involve overnights.

Additionally, the rule changes the measure of reasonable cost for a private health insurance plan to more accurately reflect the ability of parents to cover the cost of health care coverage. It also provides clear guidance on how to address social security benefits received directly by the children when calculating support as well as adoption assistance received by the family on behalf of one or more of the children.

Background

In January 2015, the Department of Children and Families (DCF) convened an advisory panel to review Wisconsin’s Percentage of Income Standard guidelines for setting child support as a part of its federally required quadrennial review.

The advisory panel met over a sixth-month period to review the results of research conducted by the Institute for Research on Poverty and OCSE, analyze guideline applications in other states and make recommendations to DCF for changes.

Representatives from various advocacy groups participated on the panel, including the State Bar Family Law Section, the Judiciary, community-based organizations, child support agencies, parents and the Wisconsin Legislature.

The committee made recommendations on the application of the guidelines in special circumstances, as well as the guidelines for the establishment of medical support orders. Their recommendations formed the basis for the changes in DCF 150.

Shared Placement Formula

Variable Costs. Starting July 1, DCF requires that variable costs shared by the parties be determined based on a list of variable costs agreed to by the parties or ordered by the court based upon lists furnished by the parties. 

The rule requires that transportation costs related to the exercise of physical placement be included in that list. DCF is working with the State Courts Records Management Committee to develop a form for identifying variable costs. DCF also clarifies that a change in circumstances to modify a child support order should be a change in the circumstances of the parties and not a change in variable costs alone. The rule no longer expressly permits rolling variable cost orders into the child support order.

Equivalent Care. Starting July 1, DCF 150 contains provisions allowing the court to apply the shared-time formula in cases where a parent cares for the child(ren) for periods of time that are not overnight, but which are determined by the court to be the equivalent of an overnight. 

The definition of “equivalent care” was amended to provide that blocks of time with the child of at least six hours may be considered the equivalent of a half-day if a meal is provided during that time period.

Courts may consider two, half-day blocks the equivalent of an overnight. When calculating periods of physical placement based on equivalent care, the total number of overnights may exceed 365. The period of placement for each parent is determined by calculating the number of overnights or equivalent care ordered and diving that number by the total number of overnights in a year.

Example 1: Shared Placement Formula

Example 2: Shared Placement Formula

Medical Support. Under the new rules, the measure of reasonable cost for a private health insurance plan is increased from 5 percent of each parent’s gross monthly income to 10 percent of the gross monthly income of each parent. That measure is applied to the full cost of the policy as opposed to the incremental cost of adding the child(ren). A contribution from the non-insuring parent to the cost to enroll the children may not exceed the cost to add the children to existing coverage.

Adjustment for Child’s Social Security. A method is provided for considering a child’s benefit under 42 U.S.C. § 402(d) in both sole placement and shared placement situations. If the noncustodial parent is receiving the child(ren)’s benefit, the support amount should be either the percentage standard applied to the payer’s income or the amount of the child(ren)’s benefit, whichever is greater.

If the custodial parent is receiving the child(ren)’s benefit, the amount of that benefit is subtracted from the child support obligation as calculated using the appropriate percentage. If the shared placement guidelines under DCF 150.04(2)(a) apply, the child’s benefit is split between the parents in proportion to the amount of time the child spends with each parent. The parent who is receiving the children’s benefits should have the proportion of the child’s benefit that represents the proportion of time the child(ren) spends with the other parent added to their support obligation. 

Adjustment for Adoption Assistance. Provisions similar to those established for consideration of a child’s social security benefit were also created to provide a method for the consideration of adoption assistance received by either parent under Wis. Stat. section 48.975(3)(a).

Income and Benefits. Any contribution to a pension or retirement account is considered income when establishing a child support order, regardless whether that contribution is voluntary.  Veteran’s disability compensation benefits are income when establishing child support as these benefits replace income.

Low-Income Formula. Effective July 1, DCF 150 permits combining the low-income formula with the shared, serial, split placement and high-income formulas. New language suggests job search or a work experience program, such as Children First, as an alternative to imputing income in low-income cases. Recently enacted federal regulations will require further review of the low-income guidelines as a part the DCF’s next quadrennial review in 2020.

Serial-Family Formula. DCF now clearly provides that a parent with a legal obligation to support a child in an intact family is a serial-family payer when calculating a support obligation for children from a subsequent family. DCF 150 also provides that if multiple child support obligations reduce a serial-family parent’s income to a level established under the low-income formula, the court may combine the provisions of the serial family formula with the provisions for determining support obligations for low-income payers.

Conclusion

The goal of these rule changes is to establish realistic orders so that paying parents will be more likely to meet their child support obligations. The quadrennial state guidelines review is more transparent and allows citizens an opportunity to provide meaningful input into the review process.