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Divorce Mediation Blog

Alimony Reform and Child Support Changes: Judge Ginsburg’s View

Wednesday, June 04, 2014

In the April 14, 2014 Massachusetts Lawyers Weekly, the most thoughtful Massachusetts Probate and Family Court judge of his generation, Hon. Edward M. Ginsburg (ret), laments that 2012’s alimony overhaul by the legislature and 2013’s quadrennial review and revisions to the child support guidelines by the Trial Court add up to a giant missed opportunity, and a failure that will hurt families for years to come. Specifically, Judge Ginsburg, who devoted a good chunk of his two decades on the bench to advocating for predictability and consistency in all things support points out that no one thought to look at spousal support and child support as a piece. He is right.

We have all been focused intensely on how the new alimony laws work; how the new guidelines work; and how we might manipulate the two into making sensible orders that are tax-efficient. But in debating the trees, we lost sight of the forest: why didn’t the lawmakers look at these two cognate and connected subjects as two parts of the same puzzle that they are? How do we rationalize two sets of support theory into a fair, efficient and sustainable whole, not just for the privileged few who will take the time in mediation, or with sophisticated counsel, to develop a custom-made support regime, but for everyone? Reform is not reform without addressing all relevant considerations; and here, half the house was built as a tudor and the other side a cape. The result is a leaky home.

An example. We recently had to explain the following muddle to mediation clients. Under the new child support guidelines, a mother with 2 children would often receive 18.4% of the Husband’s gross income as child support, and no alimony, he having income of about $200,000.00 per year. The same woman learned that if she had no kids at all, she might expect 30 – 35% of the very same income, as alimony. Granted, we explained, taxable income is worth less than its gross sum. But is it worth less that 18.4% on the gross? Not likely.

Another example. As we have discussed here before, the alimony law says that the court may not take dollars into account that have already been tapped for child support, suggesting that child support is computed first on income up to $250,000.00 per year, with excess income only being addressed for alimony. Meanwhile, the child support guidelines say that the court may calculate alimony first, and then child support. We have argued before that sound discretion and good divorce mediation can turn these conflicts into opportunity in the search for a sensible result. But the legal inconsistency is undeniable.

Would it not have made sense for some body to review the matter of family support as of a whole? Is it too late?

Thanks to Judge Ginsburg for this valuable and disturbing insight.

 

2013 Child Support Guidelines Preview Part 3: Whose Income is It, Anyway?

Wednesday, July 24, 2013

Since their 1987 inception, our Child Support Guidelines (CSG) scheme has confined its presumed “mandatory minimum” child support formula to family income falling within a fixed threshold. Initially, the annualized income limit was $75,000.00. Since 2009, it has been $250,000.00. The 2013 CSG do not change the threshold amount; but they do clarify a financially meaningful ambiguity: in two earner high-income families whose income comprises the first $250,000.00 and who’s the “excess”?

Historically, there were two common approaches: count the payor’s income first or apportion the parties’ joint income based on their percentage contribution to the whole income stream. Each created a different child support sum and its own version of excess income (income not absorbed by the presumed minimum child support but still available for alimony and/or additional child support with discretion unbridled by formula, and/or ancillary expense obligations such as medical, extra-curricular and education costs).

Here is an illustration, based on the following assumed facts: payor income of $300,000.00; and payee income of $50,000.00; and one child. For simplicity, without permitted medical insurance or childcare adjustments, the results are:

1. Count the payor’s income first:

Child support = $40,144.00 per year
Excess income = $50,000.00 for and each parent
Likely alimony = none.

2. Allocate the parties’ incomes:

Child support = $34,944.00 per year
Excess income = $85,000.00 payor; $15,000.00 payee
Likely alimony = $22,750.00

These two very different results illustrate a potential for inconsistent outcomes that are anathema to CSG, so the 2013 version settles the question: option 2 is now the rule. This resolution is conceptually consistent with the underlying “income shares” theory of CSG. It also has an economic effect on the parties. In this case, if the payee’s combined effective tax rate is 18% (which it would be assuming no other taxable income or itemized deductions), the net after tax yield is $18,655.00: a result of $53,599.00 of combined alimony and child support vs. $40,144.00 of child support alone.

So, what appears at first blush to be reduced child support is actually a 34 per cent increase in net-after tax total support. This increase might be tempered by shifting more ancillary child costs to the payee, but the differing outcomes are nonetheless stark. We wonder if this was an intentional effort to increase periodic family support payments in high-income cases (despite that many child support payments under 2013 CSG will be lower), or simply an effort to promote uniformity.


  1. Assuming application of CSG before the 2012 alimony law, and not the reverse, as is now permitted under 2013 CSG. See our last blog entry.
  2. The payor’s income is 86% (300/350) of the family’s income, so $215,000.00 ($250,000.00 x .86) of the payor’s income applies against the threshold; and $35,000.00 ($250,000.00 x .14), of the payee’s income comprises the rest.
  3. Using the .325 mid-point of the “general” alimony range.

 



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