Child Support
Categories: Tax, Econ, Regulations
It's a swing set, right? Stuff you don’t already know:
Child support is a payment, often court-ordered, made by a parent to another parent for the expenses of their shared child. The child support collection system was set up in 1975. With divorce and single parents on welfare both increasing, an official system was needed to provide stability for families post-separation.
Obviously, parents involved in these arrangements are no longer together, and so the whole “give your ex money" idea can get pretty...let's say tense. Enough so that couples end up in court to battle it out. To provide consistency and settle arguments, states have set rules to determine payments.
Michigan and Ohio for example use an income share model to figure out the amount one parent pays the other. This method adds together the income of both parents and compares it to the estimated monthly child raising expense. Whatever percentage of total income that parent has, is the percentage of the cost estimate they’ll pay.
So say a separated couple makes the same...they would split the estimated costs down the center. If one made 60% and one 40% of their monthly combined income, they would split the estimated cost that way. The percentage of income model simply takes a percentage of the non-custodial parent's income. The percentage is determined by how many children they have (20% for one, 10% for two, etc).
Generally, support is ordered until the child is 18 or completes high school, leaving plenty of opportunity for the parents to bicker it out.
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