Divorces are never easy, especially when children are involved. Even once visitation is sorted out, the question of expenses and child support arises. In a perfect world, each parent would provide 50% of the childcare needs during the marriage and the divorce.
However, even during a happy marriage income is rarely equitable and after a split there are many different elements to take into account, concerning finances.
Here are some common ways to divide childcare expenses:
1. The Income Share Formula
In the most straightforward solution, the sum of childcare costs are calculated and each parent is responsible for “their” half of the cost. This is sometimes called the Shared Income model and functions under the assumption that the resources of both parents will be similar to when they were working together as a household with the same income.
This works especially well when the child spends half of his or her time with both parents as well.
Most states function under this model and each parent gives a percentage of their overall income that previously went to childcare costs, thus coming up with the full sum for child support.
2. A Needs and B Needs
A more subtle solution divides childcare costs into two groups: A and B Expenses.
The A Expenses are regular occurring costs such as food; rent or mortgage for the house the child lives in, clothing, and health products like shampoo or toothpaste.
The B Expenses are non-regular costs such as gifts for school friends, health coverage or emergency medical bills, annual school supplies and uniforms, and extracurricular activities.
Deciding on the cost of A Expenses is usually easier, as this is calculated by figuring out how much monthly child support will be, taking into consideration the income for each individual and timeshare. A Expenses are to be covered by a monthly child support amount. B Expenses would not require payments monthly, as A Expenses would. Some couples are comfortable with pre-determined agreeing on the percentage of each they would pay, while others need
The upside of A/B expenses is that it keeps the finances of the family working together as though they were a functioning singular family. Unfortunately this results in the same pitfalls, with former partners forced to interact on a regular basis to figure out the financial specifics, which may lead to further conflict between the couple.
3. Percentage of Income Model
This newer model, used currently only by about 10 states in the United States of America, is based entirely on the noncustodial parent’s income. A set percentage of this income is set aside for child support payments, regardless of the income of the custodial parent. While the custodial parent may be entirely capable of fully supporting the child or children on their own, the percentage of the noncustodial parent’s income is to show an ongoing involvement in the well-being of the child.
In California, the parties can come to an agreement on whatever model works for them. In the event that they cannot agree the court will order the parties to split childcare costs for employment or training to become employed 50/50 between the parties.
In addition, the court will also order the parties to split non reimbursable medical expenses 50/50 between the parties. The court will consider discretionary add-on’s such as school tuition or extracurricular activities, but usually the court will not rule on items such as those. It is better if the parties can reach an agreement on how to handle those costs in the future together as the best person to dictate how to manage your finances is you.
It is always best if the parties can reach an agreement on how to handle the costs of the children after separation but that is not always the case. I
f you need help calculating your monthly child support amount we can help. Our experienced divorce attorneys at Minella Law Group are knowledgeable and creative, they can assist you in coming to a solution on how to handle expenses. For more information or to schedule an appointment, call us at (619) 289-7948. We look forward to helping you.