HOW IS CHILD SUPPORT CALCULATED IN TEXAS?
Whenever a couple with children breaks up or divorces, child custody and support often become a primary focus. As a general rule, the parent who has primary physical custody of the child or children is entitled to receive child support in Texas from the non-custodial parent. Many parents experience a fair amount of anxiety over their ability to afford child support, particularly now that they must maintain a separate household.
A consultation with our Houston child support attorneys can help you understand how child support in Texas is calculated, and give you a good idea of what to expect in terms of your monthly child support obligations.
The Purpose of Child Support
Child support is not intended to punish the non-custodial parent. Instead, its purpose is to essentially share the financial burden of raising a child with the parent with primary custody of the child. In determining child support orders, the court looks to the best interests of the child.
In both divorce and child custody cases, child support is ordered to help the custodial parent both support the child and provide an adequate standard of living. If you are the parent who will be paying child support, the amount that you will be paying will be based not solely on your current income, but on all resources available to you.
The Three-Part Test for Determining Child Support in Texas
Texas uses a statutory formula to determine child support payments. This formula provides fairness and consistency in child support determinations. However, judges do have the discretion to deviate from it based on other factors, if he or she believes that it is necessary in the best interest of the child or children.
Texas courts utilize a three-part test to calculate child support payment amounts. First, a court will determine the amount of the paying party’s available net income. Second, a court will apply the child support guidelines to the paying party’s net income to determine the amount of support. Third, a court will consider other factors that may justify departing from the guidelines. Each of these steps is discussed in further detail below.
Step One: Determining Your Monthly Net Income
In order to determine what your available income is to pay child support in Texas, a court must figure out your total financial resources each month. As a child support lawyer in Houston can explain, your financial resources will include a variety of sources, such as wages and salary, social security benefits, interest income, unemployment income, and any other type of income received. This income will be totaled, and an average monthly income will be determined by the court.
From that amount, the court will subtract certain expenses, such as federal income tax, state income tax (if applicable for parties with income from outside of Texas), health insurance expenses for the child or children, union dues, and non-discretionary retirement contributions. Once these items have been subtracted from your average monthly income, the court will arrive at your monthly income and can proceed to the next part of the test to determine your child support obligations.
Step Two: Applying the Child Support Guidelines
Under the guidelines, child support in Texas is calculated as followed:
- One Child: 20% of the paying party’s net income
- Two Children: 25% of the paying party’s net income
- Three Children: 30% of the paying party’s net income
- Four Children: 35% of the paying party’s net income
- Five Children: 40% of the paying party’s net income
- Six or More Children: not less than 40% of the paying party’s net income
For example, if a non-custodial parent had a monthly net income of $5,000 and was paying support for two children, he or she would be required to pay 25% of that monthly net income in child support, or $1,250 per month.
Step Three: Considering Other Factors
Once the first two steps are complete, a judge may consider other factors in deciding to deviate from the statutory formula. Although this is unusual, there are circumstances in which additional child support or reduced child support are necessary in the best interest of the child. An experienced Texas child support attorney can help you determine if you are likely to be subject to this type of deviation.
A judge may consider the following factors as part of the three-part test:
- The age and needs of the child;
- The child’s health insurance and uninsured medical expenses;
- Extraordinary educational, healthcare or other expenses;
- The child’s educational expenses;
- Any resources available for the child support;
- Each parent’s period of possession of the child;
- Child care expenses;
- Travel costs incurred to exercise visitation;
- The receiving party’s net resources and earning potential;
- Cash flow from real or personal property, and assets like businesses or investments;
- Debts assumed by either parent;
- Spousal maintenance received by either parent;
- Whether either parent has conservatorship or possession of another child;
- Any other reason consistent with the best interest of the child.
Extra child support may occur if a child has significant medical needs and requires full-time care or the payment of out-of-pocket medical expenses. In that case, a judge may determine that additional child support is in the best interest of the child.
What Are Net Resources?
According to the Texas Family Code, net resources include wages, salaries, commissions, bonuses, overtime, tips, interest, dividends, royalty income, rental income, severance pay, retirement benefits, pensions, trust income, annuities, capital gains, Social Security (excluding supplemental income), unemployment benefits, disability benefits, worker’s compensation benefits, interest on notes, gifts, prizes, spousal maintenance, alimony, and self-employment income. Each of these items will likely be fairly easy to calculate, as they are all the type of items that will likely be included on your tax returns.
There are some other resources that could be considered for purposes of child support. This may include a personal injury award and an inheritance. In addition, you may be able to have your spousal maintenance support payments reduced in order to pay additional child support if necessary. This may be the case if your child has special needs or otherwise requires support beyond the usual statutory amount.
What About Underemployment?
Many people who are subject to child support orders have been accused of intentional underemployment. In other words, they are working for less money on purpose in order to avoid paying child support. For example, if you routinely made $75,000 per year working as a freelance consultant prior to the child support order, and then made $40,000 the year leading up to the court case, the judge may find that you were intentionally making less in order to reduce your child support obligation. In that situation, the court may find that you are liable for the amount that you would owe if you were working at full capacity — $75,000 per year — rather than $40,000.
A skilled Houston child support attorney can work with you to demonstrate that you are not intentionally underemployed, and instead may have had a downturn in business that has led to a reduced income.
What effect does child support have on your vehicle registration?
Starting in September 2016, the Texas Attorney General’s Office implemented a plan to help ensure that parents make timely child support payments. The agency does not allow parents who are behind six months or more on their child support payments to renew their vehicle registrations. This is meant to incentivize paying child support, but it may make it harder for parents to earn money so that they can continue to provide for their children. If you have fallen behind on your child support payments, contact a child support lawyer in Houston to discuss your options.
Child support in Texas can be complicated, from calculating monthly net income to determining if any discretionary factors will apply. Our Houston family law attorneys can help you with all matters relating to child support. With more than 30 years of combined experience, the Moffett Law Firm will put our expertise to work for you. Contact our office today at 713-333-5800 or contact us online to schedule an initial consultation.