Budget is Battlefield in High-Income Child Support Cases

The Superior Court of Pennsylvania held, once again, that the budget is the most important element of a Melzer child support case — that is, a high-income case where the guidelines do not apply. Under Pennsylvania law, the child support guidelines govern cases where the parents’ combined net incomes are $20,000 per month or less. Yet, in those high-income cases above $20,000 per month, the guidelines are irrelevant except to set the minimum level of child support. In high-income cases, the courts must analyze the parents’ budgetary expenditures to determine the proper amount of child support.

A recent case, Rich v. Rich (2009), demonstrates how important the budget can be in high-income cases.  The aptly-named patriarch of this family provided the standard of living that only a ten-figure salary can afford. Father earned $9 to $10 million per year as the CEO of a coal company. During the marriage, the family lived in a 10,000 square foot home on 150 acres with an indoor pool and amenities. The family traveled worldwide on vacations and spent summers at homes in Florida and the Jersey shore. After separation, Mother purchased a modest home and moderated her lifestyle. She did not submit a detailed budget when she applied for child support. Instead, she pointed to the Father’s affluent lifestyle as an indicator of how much she should receive.

When Mother was awarded an amount of child support equal to nearly 100% of her expenditures, she complained because it was just 2% of the Father’s income. She reasoned that she should receive more like 15%. The Superior Court disagreed, holding that Mother should have proven that she was actually spending that much.