In the previous article, I covered stepfamily financial matters including individual or joint accounts, credit, disinheriting biological children and social security benefits. Now let’s probe into child support and its affect on stepfamily money.
- Monthly Child Support.
In Blended Families An Anthology, Sonya Visor shared her child-support drama in The Check for $3.96. She and her husband waited in the courtroom as the magistrate left to formulate his decision. Who would be first on the list to eat this week: their one-year-old son or her husband’s eleven-year-old son from a previous relationship? The magistrate returned with the ruling—his oldest son will eat this week. At the final strike of the gavel, the Visors were left with a check for $3.96. How would you respond to being left with mere ashtray change to support your family?
I, too, experienced financial woes as a new stepmother and tell my story, A Wiser Man, in Blended Families An Anthology. When the support determination process was complete, my husband was left with $400 per month—just enough to cover the car payment he brought into the marriage. As a single mom, I struggled for twelve years to provide for my children. My dreams of financial security dwindled into fleeting glimmers of wishful thinking.
Each state has laws that govern the family courts and child support calculations. In Michigan, support is calculated on the total income of the biological parents and stepparents. Wow! In Ohio, support is calculated based on the total income of the biological parents only. Since my experience is with Ohio, let’s delve into its support calculation formula.
Let’s say, for example, that the father earned $70,000 per year and his ex earned $30,000. Their total combined income is $100,000. The agency uses a factor to determine the child’s standard of living based on the total income. We’ll estimate it at $20,000. At $20,000 annual assistance for the child, the father would be responsible for seventy percent or $14,000 per year because he earned seventy percent of the total income. The remaining $6,000 ($20,000 – $14,000) is the thirty percent for which the ex would be responsible. So if Dad is the non-custodial parent and gets paid every week, the $14,000 is divided by 52 weeks to get the weekly support. The agency would garnish his paycheck by about $269 a week plus a two-percent processing fee. The agency will collect the court-ordered support until the child is emancipated—graduates from high school, drops out of school or reaches eighteen years old. However, if a significant drop in income occurs, a decrease in support can be requested.
If you’re blessed to receive child support, how should it be handled? Include this money with the other family earnings. Remember, child support is not just for buying the kids clothes and toys. Child support also includes housing, meals, school, etc. It will be much easier if the child support is combined with the rest of the family finances. Separating this money for a specific child can create tension in the home and marriage. However, circumstances may require that a portion of the support remain separate. If that’s the case, both spouses should clearly understand the amount and reason for the division.
As you and your mate communicate about finances, be sure to talk through managing requests for money over-and-above court-ordered child support. Recall that the net increase in income for our newly-formed family was zero, zip, zilch, nada! We had nothing left for “incidentals” like a cell phone. For the first few years, the requests rolled in and every time my husband had to deny his children, a piece of him died. Added to his frustration of being unable to fulfill his children’s wants, the guilt of them being raised in a “broken home” consumed him.
If you become delinquent on child support payments, the overdue, unpaid balance is referred to as arrearage.
Child support is not discharged in bankruptcy and arrearage is not dismissed with emancipation. The money will continue to be deducted until it’s paid in full. My children’s biological father is almost $20,000 in arrears. Although my sons are grown, I remain diligent in my pursuit. At our last court hearing, an attorney informed me that unpaid child support transcends life as we can receive payment posthumously through his estate. Wow!
Excessive delinquency will cause the Child Support Enforcement Agency (CSEA) to pursue the arrearage in various ways including
- List the derogatory debt on credit reports
- Garnish wages
- Garnish lump sum bonuses
- Seize income tax refund
- Post an arrest warrant
As a recipient of support, the increase in income could place you in a higher tax bracket, which in turn, could reduce some of the deductions that you used to claim. At the same time, your tax situation could improve as a result of the exemptions, I mean children, who are now a part of your life. Adjust your withholdings from your employer to have the appropriate amount of taxes withheld. During tax preparation, you have the option of filing joint or separate as a married couple. Compare the results of both filing options every year. Any given year, one or the other can give you more favorable results.
If you normally receive a tax refund, this may be withheld if your spouse has accrued debt for child support or bankruptcy. Complete the Injured Spouse Form (#8379) to minimize disruptions to your refund. Otherwise, the IRS will send a letter notifying you that your joint tax refund has been applied to your spouse’s debt. Once the money is applied, it cannot be reversed. Also, if dealing with a previous marriage, check the divorce decree to determine if the custodial and/or non-custodial children can be claimed on your tax forms or the ex’s. Some couples have the option of claiming the children every other year. For questions about deductions, exemptions and other tax concerns, call the IRS at 800.TAX.1040.
Other points to consider in your stepfamily finances:
- Contact the CSEA and request a statement to verify monthly support payments, arrearages, etc. Understand the laws governing your CSEA and support calculations. What happens if the non-custodial parent is in the military or lives out of state? What if the non-custodial parent is self-employed or a full-time clergy? How will new additions to your family, either by birth or adoption, affect child support?
- Pay all support payments through the CSEA. Monies paid directly to the custodial parent are considered gifts and will not reduce the monthly support obligation or arrearage.
- Survey other stepfamilies. Find out what worked for them and what they wished they had done differently. How did they address visitation? Vacations? Finances? Holidays? The other parent?
- Obtain a copy of the divorce decree and keep it in safe place. You may need to include a copy with your tax return to document exemptions.
- Be sure to understand how much is required and for how long. Was future money included (retirement, bonuses, insurance)?
Although the adjustment may not be easy, if you plan ahead, communicate daily with your mate and develop a consistent prayer life, your family will survive and thrive.
The bestselling author of Blended Families An Anthology, Valerie J. Lewis Coleman has helped thousands of families navigate the challenges of child support, visitation, discipline and more. With over twenty years of experience in family and relationships, this expert has given advice on varying issues including baby-momma drama, defiant children and disapproving in-laws. On her journey to assist others with building strong families, she shares her personal testimony and practical tools to help you stop the stepfamily madness in your home! To learn more about Valerie, her books and overcoming relational matters, visitPenOfTheWriter.com.