This blog is based upon an episode of Divorce Happy Hour Podcast by John Nachlinger. For the replay, click this link.
Child support is one of those topics that a lot of people get really heated about, because you either think you’re paying too much or not receiving enough.
Let’s be honest, kids are expensive. Child support in New Jersey is generally determined by the NJ Child Support Guidelines and is a formula; it's based on what some economists at some point in time thought that it costs to raise a child depending on how much money you make. So because it's a formula, many people are upset by what number comes out at the end. The number that comes out at the end is based upon a variety of factors, including your income, taxes, health insurance costs, the amount of time the child spends at each person's house and a variety of other factors largely related to income and finances. So those are the things that people tend to fight about because the number at the end is typically something we can’t fight about since it is a formula.
So what I want to talk to you about is what is included in child support and what is not included in child support, because there's a big misconception about those topics. But it's actually pretty clear cut for the most part, what is and is not included in child support.
I want to make it very clear to all of you who are reading this that whenever you enter into an agreement about child support, if you're not more specific about what it's supposed to cover and what it's not supposed to cover and what expenses you're going to be splitting, then you're at the mercy of what the law says, which is the subject of this blog. So if you don't want a judge to take the law and apply it to your case, you need to make sure that your agreement specifically says what your intention is about what child support is supposed to cover or what it is not supposed to cover. You need to be clear on how those expenses are going to be divided.
Also, with respect to some expenses, are they going to be divided proportionate to your incomes? Or are they be divided equally? Is one parent going to pay for certain expenses? Those are things that if you don't agree to them in your agreement, you're leaving it to a judge to make a decision. So with all that being said, let's start talking about what is included in child support.
There are three broad categories of things that child support covers:
- Housing Expenses, which is the child’s share of the costs associated with maintaining shelter.
- Variable Expenses, which are the expenses that follow the child e.g. food and the gas for you to drive them around.
- Expenses. These are things like extracurricular activities, hobbies, clothing, things like that.
So let's talk about each of those categories and drill it down a little bit more.
Housing is easy because the NJ Child Support Guidelines allocate 38% of the child support award to cover housing. So what that means is it's meant to cover the fact that if you have a child and they need a room, instead of needing a one bedroom apartment, you now need a two bedroom apartment. So that 38% is meant to cover the extra cost for the child. It is not meant to cover all of your housing expenses completely because you live there too. It's meant to cover your child's part of the house and expenses. And that's the mortgage or rent, property taxes, homeowner's insurance, all the utilities, condo fees, anything with regard to housing, that's what that's supposed to cover. So keep that in mind that when you're paying child support or receiving child support, a big chunk, almost 40%, is just to put a roof over your child's head. And obviously, the more money you make, the nicer that roof is expected to be.
When we talk about variable expenses, we're talking about food and transportation for the most part. That means all the food in your house for the child, including going out to eat (restaurants, take out, etc.) and that means school lunch. School lunch is something that you would pay if you are the one receiving child support.
These variable expenses are not to buy your child a car. A car purchased for a child when they're 16, 17, 18, is not included in child support. What is included in child support is your car. So your costs to drive your child around are included in your child support amount e.g. fuel, for maintenance, your car payment.
So what else is included? Your kid's clothing for one. And this is what we can begin to exercise some control over the expense. So typically the Parent of Primary Residence who is getting child support is going to buy the kids; clothes. If you have an arrangement where the kids are spending equal time with both parents, both parents are buying clothes. And there are adjustments to child support that can be done to account for that fact.
Also included in child support are some unreimbursed healthcare expenses for the child. So health means medical, dental, vision, psychiatric, therapy and everything that's health care related. All of those costs, up to $250 per year, per child, are included in child support. So basically that the intention there is that your co-pays for your kids, whoever is receiving child support, is going to be paying for those co-pays up. Anything beyond that can be split equally or proportionate to income, or you can agree on some other arrangement.
Child support does also cover entertainment for your child. Now, this is where it starts to get a little bit more gray because there are some broad categories of things and some of them have limitations. But the limitations are actually in the law itself. I call them common sense limitations, but it covers, such things as admissions to sporting and recreational events and social activities, when your kids want to go out to the movies, anything they need in the house or their own, their television set, their mobile devices, their cell phones, if they have any pets, any hobbies, they have any toys, any recreational equipment that they need.
However, it is very common that parents will agree to share extracurricular activity costs, since they are often very expensive. However, they need to be addressed in your agreement, otherwise, they are considered to be included in the child support amount.
As you can see, it is very important that you make sure you understand the child support guidelines when agreeing on a child support amount. If you want to listen to entire discussion provided by John Nachlinger, Esq. about child support, please go to the link here and listen to Divorce Happy Hour Podcast.
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