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  • Examining Child Expenditure Methodologies

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    Tony Curtis
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    The document examines Utah's current Income Shares methodology for determining child support amounts and questions whether it accurately measures child expenses for divorced families. It analyzes economic models used in other states and explores separating actual child costs. The analysis finds that Income Shares estimates child costs at 288% higher than a self-sufficiency standard, largely due to assumptions about married standards of living and assigning all variable child costs to one home. It cautions that Utah's high child support levels may negatively impact non-custodial parents' ability to pay and their relationships with their children.

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    The document examines Utah's current Income Shares methodology for determining child support amounts and questions whether it accurately measures child expenses for divorced families. It analyzes economic models used in other states and explores separating actual child costs. The analysis finds that Income Shares estimates child costs at 288% higher than a self-sufficiency standard, largely due to assumptions about married standards of living and assigning all variable child costs to one home. It cautions that Utah's high child support levels may negatively impact non-custodial parents' ability to pay and their relationships with their children.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    8 views11 pages

    Examining Child Expenditure Methodologies

    Uploaded by

    Tony Curtis
    The document examines Utah's current Income Shares methodology for determining child support amounts and questions whether it accurately measures child expenses for divorced families. It analyzes economic models used in other states and explores separating actual child costs. The analysis finds that Income Shares estimates child costs at 288% higher than a self-sufficiency standard, largely due to assumptions about married standards of living and assigning all variable child costs to one home. It cautions that Utah's high child support levels may negatively impact non-custodial parents' ability to pay and their relationships with their children.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    of 11

    Examining Child Expenditure

    Methodologies
    Does Utah’s current Income
    Shares technique accurately
    measure child expenses?
    What do these lines represent?

    Child Support Formulas - One Child


    Obligee's Income = 50% of Obligor's Income

    25%

    20%
    % Obligor's Gross Income

    15%

    10%

    5%

    0%
    800 1800 2800 3800 4800 5800
    Obligor's Monthly Gross Income

    Utah Rothbarth Engle Average


    Economic Models and
    Methodologies

    • Betson, Engle and Rothbarth


    – National data, varied SOL, married only
    • Income Shares
    – Used in over 30 states
    • Wider Opportunities for Women
    • Self Sufficiency Standard
    – Used in over 30 states
    – Local data, one SOL, varied families
    Separating Child Costs
    Using 2 children, one preschool and one elementary school age

    1 Adult 1 Adult 2 Children


    2 Children
    Housing $528 $671 $143
    Day Care $0 $829 $829
    Food $176 $396 $220
    Transportation $232 $238 $6
    Medical $116 $259 $143
    Miscellaneous $105 $239 $134
    Adding Inflation
    Allowing for increase from 2001 to 2005

    1 Adult 2 Children
    Housing $582 $158
    Day Care $0 $914
    Food $194 $243
    Transportation $256 $7
    Medical $128 $158
    Miscellaneous $116 $148
    Costs for 2 Children in 2 Homes
    Allowing for minimum 25% parent time with non custodial parent

    Children’s Cost in Children’s Cost in


    Custodial Home Non Custodial Home
    Housing $158 $158
    Day Care $457 $457
    Food $182 $61
    Transportation $7 $7
    Medical $79 $79
    Miscellaneous $111 $37
    Sales Tax $18 $6
    Total Custodial Costs for Children
    Deduct medical and daycare

    Children’s Cost in
    Custodial Home
    Total Costs $1101

    Day Care $457

    Medical $79

    Normal Costs $475


    (less extraordinary costs)
    Calculating Income
    Required to maintain self sufficiency in divorce

    Custodial Non Custodial

    Living Expenses $-2307 $-2099


    (parent and children)
    Taxes $314 $-686

    Total Expenses $-1993 $-2785

    Child Support $808 $-808

    Gross Income $1185 $3593

    Net Income $1499 $2907


    Child Costs in Custodial Home
    Income Shares (Rothbarth-Engle) vs. Self Sufficiency
    Standard
    Child Costs

    Income Shares $1369


    (based on net income)
    Self Sufficiency $475
    Standard
    Income Shares rate as +$894 (288%)
    compared to Self
    Sufficiency Standard
    Why the Huge Discrepancy?
    Income Shares Method Approximate effect
    on Child Support
    Requires married SOL (125% $270
    of divorced SOL at same
    Income level)
    Assigns all variable child $104
    costs to custodial home
    Underestimates cost of Unknown
    daycare ($123 per month)
    Underestimates cost of Unknown
    medical ($46 per month)
    Impact of High Child Support
    With Utah having the region’s highest child support, what
    will the effect be?
    • Only non custodial parent must meet high
    standard for child support
    • High rate of child support delinquency for the
    lowest income non custodial parents
    • Is it in the best interest of the child to push their
    fathers beyond their limits, then if they fall short
    have the government and media accuse, harass
    and demean them in the presence of their
    children?
    • The Income Shares methodology needs close
    examination, in estimating costs for married
    families it overestimates costs for divorced
    families

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