On January 1, 2017, numerous changes to the Michigan child support formula went into effect. The revisions not only update economic factors when calculating Michigan child support, but involve substantive changes, too.
Here is an overview of the major changes.
- Retirement plan contributions — The first change is that employer contributions to a retirement plan will not be counted as income. Why? Because the money is unavailable for support. However, if the account was accessed, then the funds would qualify as income. The second change is that the 5.5% deduction for voluntary contributions has been removed. Because the payer is deciding how the money is spent, this is money from which support may be paid. As it currently stands, only mandatory retirement contributions that are a condition of employment can be deducted.
- Administrative cost — The formula now allows for a deviation if the amount of the support order is not more than $15 and the administrative cost is too burdensome. The Friend of the Court Bureau cautions that this is not a new “minimum order” and must be handled on a case-by-case basis.
- Dealing with high income — The “magnitude of income deviation factor” has been removed from the formula and the trial court now has discretion in “extremely high income” cases. What is an “extremely high income” case? Unfortunately, the Michigan Child Support Formula Manual doesn’t provide a clear definition, but according to the Friend of the Court Bureau, “it is expected to be at least several times above the highest amount in the general care tables.” When using its discretion, the trial court must make sure the child’s needs are met.
- Imputing income — The formula is now clearer about when income may be imputed to the payer. For example, the number of hours of available work is a factor to be closely examined. Basically, there is now more emphasis on the requirement to look at each factor when determining ability to pay and whether to impute.
- Mandatory healthcare deduction — Because federal law requires that everyone must have health insurance, the formula now allows a deduction for this cost. The deduction applies whether the healthcare plan was purchased through an employer, privately or an exchange.
- Parental time offset — The parental time offset has been changed to a factor of 2.5. This change was made to address concerns that the previous method did not adequately balance the payee’s overall costs with the payer’s costs for moderate or minimal amounts of parenting time.
- Employer reimbursements — Changes were made to clarify that employer reimbursement for tuition, education, health savings accounts and uniforms are not considered income.
- Medical expenses — The most glaring change is that the term “extraordinary” has been changed to “additional (extra-ordinary).” In addition, the minimum threshold for enforcing additional medical expenses is $100 per child each calendar year, or a lower amount established by the court. Also, there are now two situations where a court may treat all medical expenses as additional: 1) when both parents regularly take the children for medical care and incur relatively equal expenses and 2) when the payer will incur most of the out-of-pocket medical costs.
These are just some of the recent changes to the Michigan child support formula. Details can be found in the 2017 Michigan Child Support Formula Manual.
If you have questions about the changes to the child support formula, or if you need legal assistance with any domestic relations matter, contact our Lansing family law attorneys today for a free consultation.