Senate bill 195 seeks to increase the percentage of child support due from the vast

majority of non-custodial parents. It also increases the percentage of child care costs that
the non-custodial parent will pay in most cases. It also divides tax deductions evenly
between parents even if most of the financial support is coming from the non-custodial
parent. The reasons given for these changes are inflation, length of time since the tables
were updated, and new research on how much it costs to raise children.

The inflation argument doesn’t make sense because the support amount increases as
wages increase. Obviously you cannot continue to increase the percentage non-custodial
parents are required to provide, or over time the percentage gets out of hand. Many
believe it is already out of hand and difficult for many non-custodial parents to survive
without outside financial support, usually from their extended families.

Another factor that is not often considered is that the non-custodial parent incurs the
expenses of raising the children in the non-custodial home in addition to child support
paid to the custodial parent. If the children’s expenses have increased for custodial
homes, they have also increased for non-custodial homes. The non-custodial parent has
to provide shelter, food, clothing, and other necessities for the children during visitation
time. The State of Utah recognizes that some of the children’s expenses are fixed in the
Utah Code 78-45-7.11 where if a child stays the entire month with the non-custodial
parent, the child support is only reduced by 50% for that period. This is because some
of the costs of raising a child are not related to the amount of time a child spends in the
home. Shelter has to be provided for the entire month, and if a two or three room home is
needed, then it cannot be provided for a partial month, then reverted back to a one room
home for the remainder of the month. According to Utah law the fixed amount of raising
a child is 50% of the support amount. Non-custodial parents can expect to spend at least
50% of what the custodial parent spends in addition to the child support they pay.

Taxes also weigh heavily on non-custodial households, due to the fact that they do not
qualify for most tax advantages available to other parents. Frequently the custodial
parent receives large tax credits and ends up with a tax credit each month. The advisory
committee that recommended the changes wanted the child support increases to be as
high as 60% in some cases, and actually calculated the amounts with the premise that the
custodial parent should have all of the tax deductions, with none for the non-custodial
home.

To increase the child support percentage, Senate Bill 195 modifies the main table used to
calculate child support. The main table consists of 115 rows representing various ranges
of monthly income (both parents adjusted gross income combined). Each row has 6
columns, each column indicating an increasing number of children from one to six. To
determine support one has to find the row that matches their combined income, then go
across until they find the column that matches the number of children. This number is
then taken and multiplied by a factor representing relative contribution to combined
income to determine the amount of child support due on a monthly basis. After this a per
capita medical insurance premium deduction may be applied. The sheer enormity of the
table (there are 690 separate support amounts in the main table), and complexity of the
steps to calculate the obligation, make analysis a daunting task.
One good way to analyze the impact is to take some common cases and plug them in,
running all the way through the process, including all factors that have a major effect on
the calculations. This is what I have done to show a real snapshot of the effect of this bill
upon some typical non-custodial households. I used the following in my analysis:

• The 2005 tax laws, forms, and schedules.

• A two child household allowing each parent to deduct one child for taxes.
• A custodial parent income twice as high as the non-custodial parent’s income.
• Medical/dental insurance costs from an actual business case, $58 for a single
person, $158 for a parent with two children.
• The non-custodial parent provides medical/dental insurance for the children as is
usually ordered by the court.
• $500/month as child care expenses for two children in the custodial home.
• No child care expenses for the children in the non-custodial home have been
considered.
• The non-custodial parent gets credit for ½ of the children’s health insurance
premiums by reducing the child support amount as is usually ordered by the court.
• Both children are eligible for the Earned Income Credit (for the custodial parent)
even though only one child is being taken as a deduction (provided for in current
tax law).
• Both children are eligible for the child tax credit and each parent takes one child.
• Three annual income levels for the non-custodial parent; $24,000, $30,000, and
$36,000, with the custodial parent making exactly half the non-custodial amount.
• Unless otherwise noted all figures are monthly.

Here is a run through of Table 1 below. At the $36,000 per year mark using the current
law the non-custodial parent pays $571 in child support and $250 in daycare expenses.
The total payroll taxes paid by the non custodial parent are $560, including federal and
state income taxes, Social Security, and Medicare. With the added $158 in medical
insurance premiums the total monthly amount paid out is $1539, leaving $1461 to
support the children and the parent in the non-custodial home.

The new law increases the day care costs to $333, and the child support to $681. This
makes a total $1732 in expenses leaving $1268 for the non custodial home.

The custodial home earns ½ of the income of the non-custodial home or $18,000 per
year. Using current law the custodial home receives $571 in child support and pays
$250 in daycare expenses. Due to refundable tax credits the custodial home takes in $254
dollars each month after including federal and state income taxes, Social Security, and
Medicare. Adding in the cost of $58 in health insurance premiums for the custodial
parent the total amount added to their gross income is $517 giving them $2017 to support
the parent and children in the custodial home.

The new law decreases day care costs to $167 and increases child support to $681 for a
total addition to gross income of $711. This yields $2211 for the custodial home, which
now has nearly twice the disposable income of the non-custodial home.
The data for this calculation and the calculations for other income levels is contained in
the tables below. The point is that the non-custodial home is already struggling at the
current support levels to provide for a parent and two children. Once the new amounts
are applied, it is clear that many non-custodial homes will be severely impacted. The
new amounts require decreases of 13%-15% in disposable income for these non-
custodial households. It goes beyond what is reasonable to ask of these families.

Table 1
Custodial Annual Income = $18,000, Non-Custodial Annual Income = $36,000
Custodial Monthly Amounts Non-Custodial Monthly Amounts

Current
Law Gross Income $1,500 Gross Income $3,000
Relative Relative
Gross Income 33% Gross Income 67%

Federal Income Tax $394 Federal Income Tax -$170

State Income Tax -$14 State Income Tax -$126
Social Security/Medicare -$110 Social Security/Medicare -$217
Total Taxes $270 Total Taxes -$513

Day Care -$250 Day Care -$250

Child Support $571 Child Support -$571
Health Insurance -$58 Health Insurance -$158

Total Income Adjustments $533 Total Income Adjustments -$1,493

Disposable Income $2,033 Disposable Income $1,507

Relative Disposable Income 57% Relative Disposable Income 43%

Proposed
Law Gross Income $1,500 Gross Income $3,000
Relative Relative
Gross Income 33% Gross Income 67%

Federal Income Tax $394 Federal Income Tax -$170

State Income Tax -$14 State Income Tax -$126
Social Security/Medicare -$110 Social Security/Medicare -$217
Total Taxes $270 Total Taxes -$513

Day Care -$167 Day Care -$333

Child Support $681 Child Support -$681
Health Insurance -$58 Health Insurance -$158

Total Income Adjustments $726 Total Income Adjustments -$1,686

Disposable Income $2,226 Disposable Income $1,314

Relative Disposable Income 63% Relative Disposable Income 37%
 Table 2
Custodial Annual Income = $15,000, Non-Custodial Annual Income = $30,000
Custodial Monthly Amounts Non-Custodial Monthly Amounts

Current
Law Gross Income $1,250 Gross Income $2,500
Relative Relative
Gross Income 33% Gross Income 67%

Federal Income Tax $405 Federal Income Tax -$119

State Income Tax -$7 State Income Tax -$104
Social Security/Medicare -$96 Social Security/Medicare -$191
Total Taxes $303 Total Taxes -$414

Day Care -$250 Day Care -$250

Child Support $509 Child Support -$509
Health Insurance -$58 Health Insurance -$158

Total Income Adjustments $504 Total Income Adjustments -$1,331

Disposable Income $1,754 Disposable Income $1,169

Relative Disposable Income 60% Relative Disposable Income 40%

Proposed
Law Gross Income $1,250 Gross Income $2,500
Relative Relative
Gross Income 33% Gross Income 67%

Federal Income Tax $405 Federal Income Tax -$119

State Income Tax -$7 State Income Tax -$104
Social Security/Medicare -$96 Social Security/Medicare -$191
Total Taxes $303 Total Taxes -$414

Day Care -$167 Day Care -$333

Child Support $591 Child Support -$591
Health Insurance -$58 Health Insurance -$158

Total Income Adjustments $669 Total Income Adjustments -$1,496

Disposable Income $1,919 Disposable Income $1,004

Relative Disposable Income 66% Relative Disposable Income 34%
 Table 3
Custodial Annual Income = $12,000, Non-Custodial Annual Income = $24,000
Custodial Monthly Amounts Non-Custodial Monthly Amounts

Current
Law Gross Income $1,000 Gross Income $2,000
Relative Relative
Gross Income 33% Gross Income 67%

Federal Income Tax $379 Federal Income Tax -$44

State Income Tax $0 State Income Tax -$71
Social Security/Medicare -$77 Social Security/Medicare -$153
Total Taxes $303 Total Taxes -$268

Day Care -$250 Day Care -$250

Child Support $430 Child Support -$430
Health Insurance -$58 Health Insurance -$158

Total Income Adjustments $425 Total Income Adjustments -$1,106

Disposable Income $1,425 Disposable Income $894

Relative Disposable Income 61% Relative Disposable Income 39%

Proposed
Law Gross Income $1,000 Gross Income $2,000
Relative Relative
Gross Income 33% Gross Income 67%

Federal Income Tax $379 Federal Income Tax -$44

State Income Tax $0 State Income Tax -$71
Social Security/Medicare -$77 Social Security/Medicare -$153
Total Taxes $303 Total Taxes -$268

Day Care -$167 Day Care -$333

Child Support $477 Child Support -$477
Health Insurance -$58 Health Insurance -$158

Total Income Adjustments $555 Total Income Adjustments -$1,236

Disposable Income $1,555 Disposable Income $764

Relative Disposable Income 67% Relative Disposable Income 33%

Please do not deliver this blow to these families. Defeat this bill or allow it to be
reviewed in the next legislative session so the public can be made aware of its impact.

Tony Curtis
580-5792
tonyanncurtis@yahoo.com