Sep
17
2018

CHILD SUPPORT FOR PARENTS WITH HIGH INCOME

Child support in Pennsylvania is calculated based primarily on the number of children and the net incomes of the parents.  The general child support rule, located at Pennsylvania Rule of Civil Procedure (R.C.P.) 1910 provides that the parents’ combined monthly net income shall be used to determine the basic child support amount, calculated accordance with the support “guidelines.”  The support guidelines, are actually designed to represent the amounts spent on children of intact families by a combined monthly net income and the number of children.  The guidelines support figure is presumed to be an appropriate amount of support, but factors such as high income may justify further analysis of whether the amount is reasonable based on the particular facts.

The Pennsylvania child support statute 23 Pa.C.S 4322(a), provides that support “shall be based upon the reasonable needs of the child.”  The guidelines for support are presumed to be appropriate, unless it can be demonstrated that the amount is “unjust or inappropriate in a particular case.”, Deviations or adjustments can be made based on special circumstances, like when the parents share physical custody, or when the parents have unusually high incomes.

There is a specific rule allowing for a deviation from the general guidelines when the parents have a high combined net income of more than $30,000 per month. Pa.R.C.P. 1910.16-3, provides a three-step process for calculation, ending with a review of all potential reasons for deviation.  The rule itself does not automatically provide for a separate analysis of whether the calculated amount of support would exceed the children’s reasonable needs due to high income of the parents.  Parents with high income who are required to pay support assert that the amount of support resulting from application of the guidelines is more than a custodial parent could spend on behalf of the children being supported.

The Pennsylvania Supreme Court has issued a recent decision about whether a support amount calculated for high income cases should also require an analysis of the specific needs of the children.  On June 19, 2018, the Court issued a decision in the case of Hanrahan v. Bakker, ruling that judges in high income cases “should consider the particular children’s reasonable needs in applying that rule (1910.16-3) to fashion support awards in high income cases.” In the Hanrahan case, the father paying support had an unusually high income of $15.5 million in one year.  A calculation under the guidelines based on this salary would require support of almost $60,000 per month. The father argued in his first appeal, to the Superior Court, that the amount of support, without any deviation, “would yield a result that is way beyond any realistic estimate of the reasonable needs of the children.”

The trial court had allowed the support to be reduced because father voluntarily contributed to a trust on behalf of the children but did not deviate any further with a consideration of the children’s basic needs.  The father appealed the Court’s refusal to analyze the reasonable financial needs of the children, and the mother appealed the Court’s decision to lower the support somewhat because of the father’s payment to a trust established for the benefit of the children.

The Supreme Court decided in Hanrahan that, in high income cases, courts must consider the actual expenses of the parties and the standard of living to which the family and the children are accustomed.  Specifically, Judge Baer, who wrote the opinion, cited economic studies finding that “the proportion of household spending on children is directly related to the level of household income, in addition to the number of children.”   In the unanimous ruling, Judge Baer ultimately determined that, “the court should engage in additional scrutiny of the reasonable needs of the particular children involved in the high income cases before it.”  The expenses of the parents, the ability of the obligor to pay, and the standard of living to which the children are accustomed are all factors to be taken into consideration when providing an appropriate amount of child support.

Whether the parents have a typical income of less than $30,000 per month or a high income as defined by R.C.P. 1910.16-3, the reasonable needs and other factors may be used to deviate from the amount calculated under the support guidelines.  Following the Hanrahan precedent, a parent with high income may still be able to demonstrate that the guidelines support figure is more than it takes to meet the children’s reasonable needs, even when they are accustomed to a relatively high standard of living.

If you have questions about the application of the child support guidelines, contact the Mazza Law Group to consult with an experienced family law attorney.