Any divorce agreement that involves one or more children will necessarily include provisions regarding child support payments. Laws vary on a state-by-state basis, but a common method of determining the size of a monthly support payment is to use a formula to determine a figure—for example, an Illinois parent of two children with an annual income of $78,000 a year will be expected to pay 28 percent of that income into child support, with the court requiring $1,820 in child support each month.
However, though child support appears to be a function of income, the value is actually a set amount. Changes in income, whether positive or negative, may not immediately cause that figure to change. So how does a change in income affect child support? It’s far from an immediate or automatic change. Let’s take a closer look.
Increase in Income
Getting a raise at work doesn’t necessarily mean you’ll pay more into child support. A 5-percent pay increase that, to revisit our example, would see your annual income go up to $82,000 would not necessarily augment monthly payments to $1,913 a month. However, once a change in income goes beyond a 15-percent increase from the agreed-upon terms, payments may indeed see some modifications. We’ll explain later.
Decrease in or Loss of Income
Accordingly, just as an increase in income does not automatically carry over to payments, a pay cut or a loss of income altogether does not let a parent off the hook for paying necessary child support. A parent will have to go before the family court to petition for a temporary reduction in responsibilities due to a change in circumstances. Receiving this reduction, however, is far from a foregone conclusion. If a judge believes this change in income was voluntary, the court may not accede to the request. The court may even include certain grounds for termination, such as insubordination or a failure to perform, as a voluntary lack of employment. If the decrease resulted from circumstances beyond the parent’s control, such as mass layoffs, the judge would likely approve a temporary reduction in obligations.
What Parents Should Do
Communication is always key. Because of how a change in income can affect child support, parents should remain in touch with each other regarding these changes and, if necessary, with the court. One important case of intervention comes in the form of a significant increase in one parent’s income, as we alluded to above. A significant increase—roughly 15 percent or more—in annual income constitutes a valid reason to update a child support agreement. In the best interests of children and their future, the court is likely to require a commensurate increase in monthly payments so that they may enjoy the improved circumstances they deserve.