University of Wisconsin–Madison
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Comparing Income-Shares and Percentage-of-Income Child Support Guidelines

States must weigh a variety of policy tradeoffs in the development of child support guidelines, including issues of equity, transparency, and simplicity. An increasing number of states are shifting to the “income shares” model from the “percentage of income” model, citing a perceived increase in equity and flexibility. Given the additional complexities in implementing the income-shares model, we ask how often, and for whom, alternative guidelines models can be expected to yield substantially different child support orders. We first review the underlying logic of each model. We then use information on matched pairs of divorcing and never married parents from Wisconsin Court Record Data to simulate expected order amounts for each type of guideline—comparing outcomes with the current percentage-of-income guidelines used in Wisconsin, and the income-shares guidelines used in four other states (Iowa, Massachusetts, Minnesota, Utah), reflecting a range of income-shares approaches. We find that for most Wisconsin families, adopting one of the income-shares examples would result in only modest changes in the amount of child support due. However, there are some instances where a different model would result in large changes in the amount of support due, particularly for relatively low-income fathers.

Categories

Child Support, Child Support Policy Research, Guidelines, Orders & Payments

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