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A new Michigan Child Support Formula went into effect on January 1, 2013.  Anyone with a current or prospective child support case in Michigan should be aware of the changes from the previous version, which had been in effect since October 1, 2008.  The highlights include:

Additional Deviation Factors – As in the previous versions of the Child Support Formula Manual, the court may deviate from the formula in certain circumstances where it makes a finding on the record or in writing that strict application of the formula would produce an unjust or inappropriate result in a particular case.  The 2008 version of the Formula listed seventeen situations in which such an unjust or inappropriate result might occur.  The 2013 update added three more.  These situations are (with 2013 additions in bold):

  1. The child has special needs.
  2. The child has extraordinary educational expenses.
  3. A parent is a minor.
  4. The child’s residence income is below the threshold to qualify for public assistance, and at least one parent has sufficient income to pay additional support that will raise the child’s standard of living above the public assistance threshold.
  5. A parent has a reduction in the income available to support a child due to extraordinary levels of jointly accumulated debt.
  6. The court awards property in lieu of support for the benefit of the child.
  7. A parent is incarcerated with minimal or no income or assets.
  8. A parent has incurred, or is likely to incur, extraordinary medical expenses for either that parent or a dependent.
  9. A parent earns an income of a magnitude not fully taken into consideration by the formula.
  10. A parent receives bonus income in varying amounts or at irregular intervals.
  11. Someone other than the parent can supply reasonably and appropriate health coverage.
  12. A parent provides substantially all the support for a stepchild, and the stepchild’s parents earn no income and are unable to earn income.
  13. A child earns an extraordinary income.
  14. The court orders a parent to pay taxes, mortgage installments, home insurance premiums, telephone or utility bills, etc. before entry of a final judgment or order.
  15. A parent must pay significant amounts of restitution, fines, fees, or costs associated with that parent’s conviction or incarceration for a crime other than those related to failing to support children, or a crime against a child in the current case or that child’s sibling, other parent, or custodian.
  16. A parent makes payments to a bankruptcy plan or has debt discharged, when either significantly impacts the monies that parent has available to pay support.
  17. A parent provides a substantial amount of a child’s day-time care and directly contributes toward a significantly greater share of the child’s costs than those reflected by the overnights used to calculate the offset for parental time.
  18. A child in the custody of a third-party recipient spends a significant number of overnights with the payer that causes a significant savings in the third party’s expenses.
  19. The court ordered nonmodifiable spousal support paid between the parents before October 2004.
  20. When a parent’s share of net child care expenses exceeds 50 percent of that parent’s base support obligation before applying the parental time offset.
  21. Any other factor the court deems relevant to the best interests of a child.

Retirement Contributions – Employer or individual retirement contributions are now considered income for purposes of calculating the payer’s child support obligation.  However, contributions up to 5.5 percent of the individual’s gross income may be deducted from income.

Income for Self-Employed Individuals, Business Owners, Executives, and Others – The new Manual includes detailed instructions and explanations for how to determine income for self-employed individuals, business owners, and the like, for purposes of calculating the payer’s child support obligation.  Any person involved in a child support case who has this type of income – or whose spouse has this type of income – should pay special attention to these new provisions.

Gifts from Relatives – Gifts from relatives counted as income no longer include gifts from a spouse.

Minimum Order Amount Requirement Removed – The 2013 Manual removed the provision of the 2008 Manual stating that, unless the court decided to deviate from the formula, a parent’s total child support obligation had to be at least $25 per month.  Now there is no such minimum amount requirement.

Health Savings or Flexible Benefit Accounts – The new manual resolved a previous ambiguity by including a provision stating that a parent’s or custodian’s qualifying medical expenses include those paid with monies from a health savings account, provided that account is funded, in whole or part, with monies reported as that individual’s income.

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Schedule a consultation with our Plymouth, Michigan family law attorneys. Contact us at 734–254-1140.