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Calculating Child Support When One or Both Parents Earns Very High Income

By Janet Langjahr

Different states approach child support calculations differently.

Some base the support amount on both parents’ incomes, such as Florida. Some look only to the paying parent’s income.

Some look to gross income, others net income.

Some use a guidelines chart of support obligations at various income levels, such as Florida. Some apply a percentage to the reference amount.

That’s complicated enough.

States that use guidelines charts generally only specify support obligations at incomes within a certain range, representing portions of the spectrum that are relatively typical.

But not every parent’s income is within the typical range. Some people earn less and some people earn more.

And guidelines support obligations are not specified outside of those typical ranges.

So how is child support calculated for those with incomes outside those typical ranges?

In Florida, a flat percentage is applied to the additional income above the maximum guidelines income.

But Connecticut’s child support guidelines do not provide clear guidance as to how to calculate child support when the parties’ incomes exceed the maximum income under their guidelines.

Because of that omission, a trial court, in effect, pulls out of thin air a percentage to apply to one wealthy couple’s excess income over the guidelines. In this particular case, the couple’s income exceeds the guidelines amount by a substantial margin.

Husband appeals from the trial court’s ruling.

And the appellate court reverses, finding the trial court’s approach to constitute an arbitrary abuse of discretion.

The appellate court’s rationale is that, as income rises dramatically, the percentage of family income allocated to children’s needs declines and, therefore, the trial court’s approach results in an arbitrary transfer of Husband’s income to Wife.

The appellate court also takes exception to awards of hefty percentages of speculative future bonuses.

This holding is consistent with recent legal trends operating to keep the lid on and even to reduce child support awards.

Read more in this Connecticut Law Tribune article: Limits Set On Child Support For High Wage Earners.

Full post as published by Florida Divorce - Child Custody - Domestic Abuse Law on October 11, 2010 (boomark / email).