Changes to the Michigan Child Support Formula

A single formula is used to calculate child support across all courts in Michigan. And, roughly every four years, the State Court Administrator’s Office in conjunction with the Friend of the Court work together to revise the child support formula. The increase in the cost of living, as well as any changes in the law, are taken into consideration when these revisions to the formula are made.

The most recent changes to the Michigan Child Support formula went into effect January 1, 2017.   They included many significant adjustments to the way child support is calculated – which could potentially result in a change in the amount of child support that Oakland County parents pay or receive.

As an experienced child support attorney, I am listing in this article the most major changes that are likely to affect my child support clients. However, the best way to understand how all of the many Child Support Formula revisions affect your case is to speak to a family law attorney.

Changes to the Michigan Child Support Formula: Health Care Coverage

It’s no surprise that the sweeping health care reform of the Affordable Care Act resulted in the need for changes to the Michigan Child Support Formula. Prior to “Obamacare”, the cost of a parent’s health insurance coverage was not considered in calculating their income available to pay child support. However, since health insurance is now mandatory, it is considered as part of the formula.

Under the new Michigan Child Support formula, the cost of mandatory health care coverage is deducted from a parent’s income, when calculating their available income for purposes of determining child support.

Because health insurance premiums can run into hundreds of dollars monthly, the parents available income will be reduced by hundreds of dollars – potentially resulting in a substantial reduction in child support for many parents.

Additionally, an employer’s contribution to the parent’s HSA is also no longer considered income for the purpose of calculating child support.

However, deciding which parent is responsible to maintain health care coverage for the children has now been made easier under the new Child Support formula. The new formula includes a “decision tree” for determining who should provide the child’s health insurance. Factors that are considered include: the cost of the insurance premiums; the quality of health care coverage; and the likelihood that a parent will be able to maintain the insurance coverage for the child.

Changes to the Michigan Child Support Formula: Business Owners

Parents who own a business have always been – and will continue to be – highly scrutinized by Friend of the Court. This is to ensure that income is not hidden when performing child support calculations. In order to calculate child support obligations correctly and fairly, the business-owner parent may have to provide: business tax returns; profit and loss statements; balance sheets and other financial documents.

The new Michigan Child Support Formula, however, clarifies what the allowable deductions from income are for a parent who owns a business. Now, a parent may deduct the straight-line depreciation of personal property from their income that is available for support. However, this excludes personal vehicles, as well as home office expenses.

If you are a business owner, you should discuss these changes to the formula with an experienced family law attorney, to fully understand how it may affect your child support obligation.

Changes to the Michigan Child Support Formula: Imputation of Income

In many child support situations, one parent may chose not to work, even though they are fully capable of doing so. Sometimes this refusal to work is an intentional act aimed at either reducing the child support they have to pay, or increasing the child support they will receive.

In these cases the Court will “impute income” to the non-working spouse. This means that the Court will take into consideration the income that they could be earning, in determining child support.

The imputed income calculation is complicated, and is best discussed with a family law attorney. However, it requires the court to consider a number of specific factors, including: the geographic region, as well as the present condition of the non-working parent.

The Michigan Child Support Formula makes the “imputation of income” considerations more specific, and prohibits the practice of imputing income based on “non-specific” calculations.

Previously an attorney could argue that a non-working parent could always be imputed with full-time, minimum wage employment. However, the new formula refutes this and requires specific considerations in order to impute income.

Can I Change My Child Support Based on Changes to the Michigan Child Support Formula?

All Child Support orders that were entered prior to January 1, 2017 were calculated using the old formula. These orders will not be automatically reviewed using the new Michigan Child Support Formula.

However, if applying the new formula would result in a substantial change in a parent’s child support obligation, they are allowed to file a motion asking the Court for a change in Child Support. The Friend of the Court sets a “threshold” for modification of Child Support of $50 or 10% of the original amount, whichever is greater.

So if the new formula would change your child support obligation by the greater of $50 or 10% of your original Child Support, you may wish to discuss your situation with an experienced child support attorney.