Child Support Guidelines and the Costs of Raising Children

IRP Reports

Steven T. Cook and Patricia Brown, December 2013 [PowerPoint Presentation]

As required by federal regulations, each state must perform a periodic review of child support guidelines, based in part on analysis of the actual application of these guidelines in a sample of cases. This report presents such an analysis; the authors compare the amounts of actual child support orders with the expected amounts calculated from the guidelines, and, in those cases where the guidelines appear not to be used, they examine court records for any explicit statements about reasons for deviating from those guidelines. The report builds on earlier work, analyzing cases entering court in more recent periods, including both divorce and paternity court cases, and different types of placement arrangements. Combining newer cases with those covered in previous reports allows the authors to examine trends in guideline usage from 1996 to 2007.

The authors conclude that consistency with the guidelines has declined, and that this decline is only partially explained by changes in placement arrangements and in the composition of cases coming to court. Cases that are eligible for special provisions in the guidelines (serial cases, low- and high-income cases, and shared placement cases) are less likely to receive consistent orders. Given that compliance with state law requiring explanations for deviating from the guidelines appears to be low in available written records (although it has improved), the authors argue that gaining a greater understanding of the reasons courts have not implemented the guidelines may require more direct contact with court officials involved in setting orders.

Jennifer L. Noyes, December 2011 [PowerPoint Presentation]
Daniel R. Meyer and Emily Warren, 2011 [PowerPoint Presentation]
Maximilian D. Schmeiser and Gina M. Longo, 2010 [PowerPoint Presentation]

Federal regulations require each state to perform a mandatory periodic review of child support guidelines. Wisconsin child support policymakers have tried to address the multiple interests of the child, the custodial parent, noncustodial parent, and the State. Wisconsin, like most states, uses the "continuity-of-expenditure" concept to formulate its guidelines. The goal of this concept is to maintain the standard of living that the child has been accustomed to when living within a two-parent family. Children should not be adversely affected economically by the separation of their parents, or by being born into a household where their parents were not cohabitating. This model emphasizes expenditure, which is based on all direct and indirect expenses pertaining to the child, rather than cost that implies the numerical price of items or services provided for a child. This philosophy has its challenges, particularly determining which expenses should be considered and their level of importance in relation to other variables. This is especially difficult when trying to operationalize and quantify indirect costs, such as parenting time and lost opportunity. This paper is an exploratory literature review to reevaluate the previously identified expenditures that have affected child support calculation, with particular emphasis on the rising cost of health care.

Ingrid E. Rothe, Steven T. Cook, and Anat Yom-Tov, 2008

This report builds on analysis reported on in "The Compliance of New Wisconsin Child Support Orders with the Wisconsin Guideline: Pre- and Post-2004." In this follow-up report, the authors continue to examine changes associated with the January 2004 guidelines modification by focusing on payments, rather than orders. The report examines relationships between the payments made before and after January 1, 2004, and other variables, focusing primarily on low- and high-income payers in sole placement cases.

The authors again find scant evidence that courts changed their methods for setting orders in the ways described in the guidelines revision. They find increases in the compliance rate for lower-income cases, cases which are the anticipated target of the guidelines change, but not other expected results of the guidelines changes, such as lower orders and lower burdens for the low and high income groups. Given the lack of adoption by courts of the guideline recommendations, the authors conclude that it is unsurprising that the expected outcomes of the new guidelines did not, for the most part, occur.

Ingrid E. Rothe, Jennifer L. Noyes, Lynn Wimer, and Anat Yom-Tov, 2007

Using the Wisconsin Court Record Data (CRD), this report focuses on the implications for sole-custody cases of a January 2004 amendment to the guidelines that changed the treatment of low- and high-income payers relative to other payers, and eliminated the previous requirement for uniform treatment of payers regardless of income. In particular, the authors examine the extent to which the courts have adopted the use of the new guideline in determining the amount of new orders in sole-custody cases for three groups: those with low incomes who would be subject to the change, those with high incomes who would be subject to the change, and those with mid-range incomes who should be unaffected by the change.

They find that overall compliance with the guideline was considerably lower for orders established after the 2004 change. In addition, compared to earlier years, new non-guideline-compliant orders were somewhat more likely to have been set above the guideline. Although the authors cannot determine with any certainty the underlying cause of these trends, they describe a number of alternative analyses completed in order to explain them. More information on this topic is included in the follow-up report, "How Did the 2004 Change in Wisconsin's Guidelines Affect Child Support Payments?"

Ingrid Rothe and Lawrence Berger, 2007

This report updates previous papers that reviewed the literature on the costs of raising children, up to and including those costs associated with the transition to adulthood. As with any literature review, data included will depend on the extent to which research in this field has been reported. The report provides evidence on the state of research concerning the costs of children and intra-family allocation of resources up through young adulthood, and can be used to help guide discussions of potential changes in Wisconsin’s guidelines. The review of expenditures during the transition to adulthood provides context for the discussion of asset accounts and college savings in the report "Extent of Guidelines Compliance in New Orders," above.

Patricia Brown and Tonya Brito, 2007

In this report IRP examines the most current child support guidelines used in other states in shared placement cases. This study includes time-share threshold levels for defining shared placement, formulas used to calculate child support, factors used in those formulas, and the consideration of "variable costs" such as medical, educational, and child care expenses.

Eight to ten of the more common or most promising formulas are then applied to a variety of common and uncommon parental income and time-share situations to compare their effect on equity issues: for example, which parent is the child support obligor, what is the level of child support obligation, and whether "cliff effects" in the formula outcomes would provide incentives for parents to litigate or would generate substantial financial inequities among obligors.

Patricia Brown and Maria Cancian, 2007

Using the Wisconsin Court Record Data (CRD), this report studies differences in child support orders and time-share placement before and after significant changes were made to the Wisconsin child support guidelines in January 2004. The new guidelines generally include lower child support orders at lower levels of time-share, and higher child support orders at or near the level of equal shared placement. The authors analyze whether there is evidence that the changes influence parents’ behavior and divorce-case final judgments.

They find continued growth in shared placement in divorce cases, and declines in both sole-mother and sole-father placement, consistent with long-term trends in Wisconsin. They find a greater increase in unequal shared-placement cases, compared to equal shared-placement cases. They also find a long-term trend of declining litigation in divorces cases, in all categories except those with unequal shared placement. These findings suggest some parents could be influenced by the inadvertent financial incentives introduced by the 2004 guidelines.

Katherine A. Magnuson, 2006

This report considers the factors that influence how a father supports his noncustodial children, with attention both to fathers’ economic resources and to multiple-partner fertility. Data come from the Time, Love, Cash, Caring, and Children (TLC3) project, a longitudinal, qualitative study of 75 romantically involved couples who also participated in the Fragile Families survey. In 2002, at the time of the first survey, all couples had just had a child, and yearly data collection continued until the child was approximately 3 or 4 years old. The author considers the amount of money and goods that fathers provided for their noncustodial children from two perspectives.

Jennifer L. Noyes, 2006

In this report the author explores the emerging set of concerns about incarcerated noncustodial parents and whether they should be held to the terms of child support orders given their change in circumstances. The report provides background information about the extent to which NCPs are incarcerated, an outline of major policy and practice options under consideration nationwide, examples of the policies and practices of six states, reviews of the extent to which the outcomes of current policies have been evaluated, and an outline of the implications of the information provided.

Maria Cancian and Daniel R. Meyer, 2006

In this paper the authors examine the extent of complications in child support cases in Wisconsin that are caused by multiple-partner fertility. Beyond documenting patterns of multiple-partner fertility in the broader population of families served by the child support system, the authors simulate the results of alternative policy regimes and discuss the principles that might underlie alternative approaches. They consider implications for child support owed by noncustodial parents and due to custodial parents, and how this differs by family structure. They then use their analysis of the distribution of family structures and incomes in Wisconsin to simulate outcomes for these families under alternative policies.

Emma Caspar, 2006

In this report the author describes alternative policies used in other states concerning child support orders for complicated families, those in which one or both parents have had children with multiple partners. The information, collected through interviews with state officials, is used in the Wisconsin Simulation, below, to analyze the implications of alternative policies through a simulation model that estimates the effect of current and potential alternative policies for families in Wisconsin.

Emma Caspar, Ingrid Rothe, and Anat Yom-Tov, 2006

Using a sample of child support cases that entered the Wisconsin family court system between July 2000 to September 2001, the authors examine child support orders to determine if they are consistent with the amounts set forth in the administrative rule that describes the percentage-expressed standard that should be used to set child support orders in Wisconsin. The authors find that in about 25 percent of the cases, the court has ordered child support but the court record does not include sufficient information to determine whether the order is consistent with Wisconsin’s guidelines.

Hwa-Ok Park and Sandra Magaña, 2005

The Caretaker Supplement (CTS) of the CSDE, which began in 1997, provides a cash benefit to parents who are receiving SSI payments and raising minor children in the State of Wisconsin. In January 2004, almost 6,000 SSI parents were receiving benefits for 12,300 children. With data drawn from state administrative records, the Survey of Wisconsin Works Families, and focus groups, this report employs quantitative and qualitative methodologies to gain a deeper understanding of CTS and its role in the economic well-being of families headed by parents with disabilities.

We found that, overall, participants were appreciative of the CTS program, especially in comparison to W-2. However, participants described in detail the use of many community resources (e.g., food pantries and used clothing stores) to make ends meet and stated that CTS payments were not enough. Some participants described problems with CTS such as confusion about the workings of the program and complaints about interaction with caseworkers. Only a minority of the participants received child support and those who did reported receiving insubstantial amounts.

Tonya Brito, 2005

In this report the author examines alternative approaches to calculating child support in complicated families and finds that the analysis does not yield any clear answers regarding what alternative method is preferred. The analysis does suggest, however, a number of directions that states are following in this context. First, states are considering a broader range of relevant data when determining child support orders in complicated families. Second, some states have implemented provisions that seek to consider a parent’s support obligation to all their children in one unified proceeding. Application of formulaic guidelines will be difficult when more dependent children and sources of income are subject to the court’s consideration. In the end, these families’ situations may best be evaluated on a case-by-case basis.

Steven T. Cook, 2002

The Wisconsin child support guidelines, which base awards on a percentage of the noncustodial parent's gross income, specify adjustments for cases in which (1) the noncustodial parent has a previous support order, (2) some children are placed with one parent, some with the other ("split placement"), and (3) a child spends part of the time with one parent, some with the other ("shared placement"). Placement may be equally or unequally shared. In this report the author examines the use of the guidelines in shared placement cases, using data from the Wisconsin Court Record Database for two time periods: (1) under the September 1987 standard and (2) under the March 1995 standard.

Ingrid Rothe, Judith Cassetty, and Elisabeth Boehnen, 2001

This paper is designed to relate solely to the issue of the cost of raising children. The authors review the existing literature regarding estimates of expenditures for children. They attempt to set the context for reliance on estimates of expenditures for children in Section II. Section III reviews the initial selection of the standard. Conceptual approaches to determining the cost of children are reviewed in Section IV. The purpose of this paper is not to develop new estimates, but to review existing estimates, which the authors do in Section V. In Section VI, they discuss implications of their research for Wisconsin’s standard and identify areas where future research may be required. Appendix I contains a more detailed description of the alternative methodologies reviewed for this report.

IRP Discussion Papers

Meta Brown and Christopher J. Flinn, 2007

In this paper the authors argue that in order to assess the child welfare impact of family policies, one must consider their influence on parents' investments in their children as well as the stability of the marginal marriage. Further, the authors expect that changes in the regulatory environment induce changes in the distribution of resources within both intact and divided families. The authors develop a continuous time model of parents' marital status choices and investments in children, with the main goal being the determination of how policies toward divorce influence outcomes for children. Estimates are derived for model parameters of interest using the method of simulated moments, and simulations based on the model explore the effects of changes in custody allocations and child support standards on outcomes for children of married and divorced parents. The authors find that, while small changes in children's academic attainment are induced by significant shifts in custody and support, the major effects of these policies in both intact and divided households are on the distribution of welfare between parents. In addition, children's attainments are not necessarily best served by the divorce-minimizing policy.

Daniel R. Meyer, Maria Cancian, and Steven Cook, 2005

Multiple-partner fertility might not be a significant policy issue if the number of children affected was fairly small. However, the authors show here that family complexity resulting from multiple-partner fertility is quite common, and has important implications for understanding child support outcomes and for designing and evaluating welfare and family policy. Using a unique set of merged administrative data, this paper provides the first comprehensive documentation of levels of family complexity among a broad sample of welfare recipients. The authors examine the extent to which complexity is associated with systematically different child support outcomes and outline the implications of family complexity for policy.

Maureen A. Pirog-Good and Patricia A. Brown, 1995

In an effort to standardize the calculation of monthly child support awards, the federal government requires states to use pre-established formulas to determine the amount of awards. However, because of human error, differences in the experience and training of the officials making the calculations, and the extent to which computers are used to calculate the awards, the formulas do not always yield the same result. In fact, the discrepancy between the amount calculated by an individual child support official and the approved amount as calculated by the state in which that official works can be quite large, on the order of several hundred dollars. This report explores the incidence and remedies for child support calculation errors.

Daniela Del Boca and Christopher J. Flinn, 1994

Many states employ percentage-expressed orders in which child support obligations in a given period are determined as a proportion of the contemporaneous income of the noncustodial parent. In contrast to more traditional systems in which obligations were set in fixed nominal terms at the time of the divorce settlement and were infrequently (or never) updated, the dynamic system has the advantages of allowing children (and the custodial parent) an opportunity to share in the general income gains experienced by the noncustodial parent over the life cycle and of possibly alleviating some noncompliance problems. In this paper the authors conduct an extensive theory-based empirical investigation of the effects of these systems on the income process for divorced fathers and the child support transfer decision. The results of their analyses are for the most part consistent. Percentage orders are generally associated with lower compliance rates, though withholding tends to alleviate the problem. The highest compliance rates are associated with fixed orders coupled with withholding.

Robert Haveman and Barbara Wolfe, 1993

A review of trends in the well-being of children reveals growing adverse effects–in terms of health, family income and poverty levels, changes in family structure, welfare receipt–and a smaller number of positive effects, including reduced family size and increased levels of parental education. These indicators justify the current public concern for children, a concern that is motivated, the authors conclude, not so much by self-interest as by the altruism manifested in the traditional willingness of Americans to provide benefits to those perceived as innocent victims.

Maureen A. Pirog-Good, 1993

Between 1988 and 1991, variation in the amounts of child support awards across states declined, with the exception of awards for low-income obligors. Nevertheless, there remain enormous differences in the amount of support dictated by state child support guidelines. For low-income obligors, support awards in 1991 ranged between $25 and $327, while for the highest-income obligors they ranged between $616 and $1,607. This variation in awards was not found to result from differences in the cost of living across states. Hence the large differences in support awards across states for obligors in identical family and financial situations give rise to serious equity considerations and suggest the development of a federal standard for setting awards. Further, in many states, nominal and inflation-adjusted support awards declined between 1988 and 1991. Overall, nonresident parents do not pay a fair share of the costs of raising their children. Given that children now constitute the largest group of individuals living in poverty in the United States, emphasis should be placed on larger awards, expressing child support obligations as a percentage of income, and a child support assurance program.

Irwin Garfinkel, Donald Oellerich, and Philip K. Robins, 1990

This paper examines the child support guidelines being developed by the states in response to the Child Support Amendments of 1984 and the Family Support Act of 1988. The authors seek to determine the extent to which the new guidelines can be expected to increase child support awards and payments and the relative importance of using the new guidelines to either establish initial awards or update awards. The analysis focuses on the guidelines being developed in Wisconsin, Colorado, and Delaware, which are representative of those being implemented nationwide.