The Alimony Hidden in Child Support

by Roger F. Gay

The Heart of the New Model:
It was immediately apparent that it would be nicer to rebuild the model such that it was less of a "house that jack built." But there were two compelling reasons to think that integration of the best of the existing best was not good enough.

First, there is the issue of sheltering children from the standard of living loss that accompanies divorce. This means increasing the award by some amount that is considered "reasonable" in light of the payer's ability to pay. It remained an arbitrary decision, and its arbitrary nature is the root of the current political problem with child support. How much is enough? How much is too much? These questions were unanswered.

Second is the political reason. The popular political philosophy is that more child support is always better. Awards granted in state courts have risen dramatically as a result of new child support formulae. Lobbying groups, operating on behalf of single mothers, have been pushing for further increases. The Federal Government has been considering the creation of a national child support guideline. Many politicians have supported the notion that a national guideline should result in awards even higher than those currently forced upon the states. Should the courts decide, on a constitutional basis, that there are limits to the amount of child support that can be awarded? What factual or scientific information is needed to make such a decision?

Over the years, many people have viewed the new increased child support amounts as containing a hidden margin of alimony. This would seem apparent, but how does one find the boundary between the two?

In the PICSLT research, the boundary was defined as being the point at which any additional payment would be primarily for the benefit of the custodial parent rather than the children.

This definition follows from case law: "the money is for the support and welfare of the children, not for the enrichment of the custodial parent" (Oregon Court of Appeals, 1987).

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The two important questions became: "Does such a boundary exist?" And if so, "How do you find it?" The boundary between child support and alimony is a solid one, if we rely on custodial parent spending patterns to find it. Take the basic child support amount to be the non-custodial parent's share of what the custodial parent would spend on her own. Payment of child support increases the standard of living (i.e. income) of the custodial parent household. This in turn, increases the amount we would expect to be spent on their children by the custodial parent. The increase in spending justifies increasing the amount of child support awarded. We can use this argument over and over, to continue to justify a greater and greater increase from the basic child support amount, and thus continue to increase the standard of living in the custodial household. But there is a limit.

To illustrate that this limit exists, let us say that a custodial mother has a take home pay of $18,000, a non-custodial father has a take home pay of $25,000, and the mother spends 20 percent of her income on a child. In other words, she spends $3,600 if she receives no child support from the father. If $100 dollars a year is paid in child support, we can easily see that it is 100 percent child support. $100 is just a small portion of the $3,600 the mother is spending. In fact, applying the "equal duty principle," it is just as obvious that a payment of a much larger portion of that $3,600 (in proportion to the father's relative ability to pay) is still 100 percent child support. This fact is easily seen, because it is just his share of what the mother actually spends on their child. (Visitation and joint custody are outside this example.)

The payment of child support provides more income for the custodial parent, which we expect to increase spending on the child by 20 percent of the payment in this example. If we use $2,000 in child support for our example, we should expect an increase in spending on the child of $400. If the father pays an additional amount, equal to his share of this $400, the additional amount is also 100 percent child support. It is still nothing more than a part of his share of what is actually spent on the child. As you can see however, the add-on is far less than the original $2,000. Each iteration results in an add-on amount that is less than the last until the limit is reached. Any additional dollar in excess of the limit in this example provides only 20 cents in child support instead of a dollar. The remaining 80 cents is alimony.

In a more complete and detailed examination of this example, the result from a typical Income-Shares model was compared to the limit. The Income-Shares model produced a result of $5,237.40, which was $2,309.48 above the limit. Just for the sake of simplicity, the example did not consider visitation time. Since most Income-Shares formulae do not account for typical visitation periods, and the PICSLT model does, the amount of alimony found in a real case at these income levels would probably be higher.