As of January 31, 2014, the combined parental income used for purposes of calculating the presumptive amount of child support amount under New York’s Child Support Standards Act (CSSA) increased from $136,000 to $141,000. This increase was automatically triggered by a provision of New York’s Social Services Law, which requires an increase in the “income cap” when there is a change in the Consumer Price Index.
The income cap is important because under New York’s Domestic Relations Law, courts are generally required to order non-custodial parents to pay child support based on their pro rata share of income up to the income cap. Courts have far more discretion in determining whether or not child support should be paid based on income above the cap. The following is a summary of how child support is generally calculated under New York’s Child Support Standards Act, and the precise role that the “income cap” serves in this process.
Background – New York’s 3-Step Process for Determining the Presumptive Amount of Child Support:
Under New York law, there is a “rebuttable presumption” that the application of New York’s child support formula yields the correct amount of child support, and unless the parties have entered into an agreement to deviate from the child support guidelines, a court is only allowed to deviate from the presumptive child support amount if there are “special” factors. Sluck v. Sluck, 266 A.D. 764 (3rd Dept. 1999). The child support percentages in New York are 17% for one child; 25 % for two children; and 29% for three children. The application of the formula is a relatively simple, 3-step process, summarized in the following paragraphs.
Step One: Determine the Combined Child Support Amount
The first step is to determine the parties adjusted gross income, and calculate the combined child support amount based on the number of children (17%, 25% or 29%), up to the presumptive income cap of $141,000. Adjusted gross income is the combined income of the parties, less FICA, Social Security, and local (i.e., NYC and Yonkers) income taxes. Federal income taxes are not deducted.
Step Two: Determine the Payor’s Pro Rata Share, Up to the Income Cap ($141,000)
The payor spouse does not pay the entire combined child support amount as child support. Instead, he or she only pays their pro rata share of the combined child support amount up to the income cap. The following scenario (in which the payee wife earns $40,000 and the payor husband earns $60,000) is provided as an example:
Custodial wife’s adjusted gross income: $40,000
Noncustodial/payor husband’s adjusted gross income: $60,000
Combined Adjusted Gross Income: $100,000
Child support percentage (assuming one child) 17%
Combined child support amount $17,000
Husband’s pro rata share
Divide husband’s adjusted gross income by
Combined adjusted gross income: 60%
Husband’s Presumptive CSSA Child Support Obligation on
Income up to the cap ($141,000):
$17,000 x .60% $5,100
Obviously, the fact that the payor spouse pays only his or her pro rata share of the combined child support amount means that where the payee spouse has significant income, the amount of child support payable by the noncustodial spouse will be considerably lower than it might otherwise have been. The only way to avoid this lessening of child support would be to order the payor to pay child support on the total amount of income – rather than merely up to the cap. As discussed below, this is an option that is available to the court, provided that the court sets forth its reasons for selecting this option.
In the past, some courts have been tempted to simply calculate the amount of child support by multiplying the non-custodial spouse’s income by 17%. Appellate courts in New York have repeatedly held that this process – which nearly always has the effect of increasing the amount of child support – is impermissible. Quite simply, appellate courts in New York have spoken loudly and clearly: trial courts must base child support on the pro rata share, rather than on the payor’s income alone. Sonbuchner v. Sonbuchner, 96 A.D.3d 566 (1st Dept. 2012).1
Step 3: Determine the Amount of Child Support, if any, Payable Based on Income Above the Income Cap
As alluded to above, where the combined amount of parental income exceeds the ceiling (i.e., is above $141,000), the court, in determining the appropriate amount of child support to be paid, has considerable discretion in determining whether to order additional child support based on income above the cap. Where the combined income exceeds $141,000, the court may apply the child support percentages (17%, 25%, or 29%) to all of the parental income, and calculate the percentage and pro rata amount based the entire amount of combined income. The court also has the option of either ordering no child support payable on combined income of $141,000, or ordering an amount of child support based on various factors, rather than on the basis of a formula. In all instances, the court must provide set forth, in detail, the particular approach that it is taking with respect to above-the-cap income, and the particular circumstances in the case that warrant the particular approach that the court is taking.
1 In the widely-cited decision, Cassano v. Cassano, 85 N.Y.2d 649 (1995), New York’s highest court – the Court of Appeals – explained the process that courts must follow to correctly apply the mandatory, first two steps of the CSSA child support formula as follows: “As the statute directs, step one of the three-step method is the court’s calculation of “combined parental income” in accordance with Family Court Act § 413 (1) (b) (4)-(5) (see, Domestic Relations Law § 240 for analogous provisions). Second, the court multiplies that figure, up to $80,000, by a specified percentage based upon the number of children in the household– 17% for one child–and then allocates that amount between the parents according to their share of the total income (Family Ct Act § 413 [1] [b] [3]; [c]).”