PA Child Support Guidelines Will Increase
Pursuant to federal law, all states are required to review their child support guidelines at least once every four years to reflect the most recent economic data on child-rearing costs. The Pennsylvania Supreme Court Domestic Relations Rules Committee has recently issued Recommendation 116, in which they have recommended an increase in child support for cases where the combined income exceeds $3500 per month. In cases below that level, it appears that child support will decrease. These revisions to the guidelines will not go into effect until the fall, after the comment period closes in early August 2012.
The Committee’s recommendation also includes the report of the economist, Jane Venohr, Ph.D., who conducted the economic study on which the recommendation is based. In her report, Dr. Venohr revealed some interesting facts:
- In 2010, the Census reported that there were 2,773,692 children living in Pennsylvania and 932,392 of Pennsylvania children did not live in married-couple households.
- In Pennsylvania, 37 percent of female-headed families with children under age 18 live in poverty and only 17 percent of female-headed families with children under age 18 have annual incomes of $50,000 or more. In contrast, 37 percent of two-parent families with children under age 18 have annual incomes of $100,000 or more.
- According to 2010 Census data, median family income in Pennsylvania is $61,890 compared to $60,609 for the United States, Pennsylvania households with rented housing devote a median of 30.4 percent of their income to gross rent (i.e., rent and utilities) compared to 31.6 percent nationally, and Pennsylvania households occupying their own homes devote a median of 20.3 percent of their income to housing costs compared to 21.5 percent nationally.
- The guidelines deviation rates from the 2010-11 sample are 18 and 15 percent, respectively, among new and modified orders. Most (74 percent) of the deviations were downward. Downward deviations have always
been more common in Pennsylvania and most other states. There were more downward deviations among new orders (79 percent) than there were among modified orders (69 percent). The most common reason for deviation is “other relevant and appropriate factor.” It accounted for 63 percent of the deviations among new orders and 51 percent of the deviations among modified orders. Other reasons that accounted for at least 10 percent of the deviations are “best interest of the children” and “agreement between the parties.” Best interest of the child is the reason behind 14 percent of the deviations in new orders and 15 percent of the deviations in modified orders. Parental agreements are the reasons behind 7 percent of the deviations in new orders and 20 percent of the deviations in modified orders.
- Females comprise 83 percent of the custodial parents in new orders and 91 percent of the custodial parents in modified orders.
- Fourteen percent of obligors in new orders and 12 percent in modified orders had net incomes of more than $3,500 per month. Most obligor net incomes are concentrated in the range of $868 to $1,250 (i.e., 28 and 26 percent of new and modified orders, respectively, involved obligor net monthly incomes in this range). This income range encompasses after-tax income from full-time minimum wage earnings. The current federal minimum wage is $7.25 per hour. A 40-hour work week at minimum wage would produce
about $1,250 per month in gross income and about $1,045 in after-tax income.
- The average share of total family expenditures devoted to children in intact families under the Betson-Rothbarth (2010) estimates are 24 percent for one child, 37 percent for two children, and 45 percent for three children. In 2010, the USDA measurements indicated that families spend $163,000 to $377,000 to raise a child from birth to age 17. As a share of total expenditures, this amounts to 27 percent for one child, 41 percent for two children, and 48 percent for three children.
- The existing schedule is based on March 2008 price levels. The updated schedule is based on September 2011 price levels. Price levels have increased by 6.3 percent between March 2008 and September 2011. As shown later, the actual increase to the schedule amounts is less because income also increased. The percentage increase from 2008 to 2010 is 6.0 percent.
- The most common adjustments are for the child’s health insurance premium and child care expenses, but they are still infrequently applied. Only one third of orders were adjusted for the child’s health
insurance premium and less than 20 percent of the orders were adjusted for child care expenses. Less than 10 percent of orders were adjusted for substantial timesharing.