Determining Child Support When a Parent(s) is a Military Member
Veterans Day is a federal holiday celebrated each year on November 11th as codified in Title 5, U.S. Code, section 6103. It was originally established as Armistice Day to recognize the signing of the armistice ending World War I, which was executed in the 11th hour of the 11th day of the 11th month in 1918. Each year, Dias Law Firm, Inc. uses the occasion to bring to light special circumstances that may affect military veterans and active duty service members.
General Principal Applicable in All Child Support Cases
California’s rules for determining child support are no different for military members than for anyone else. The trick is in recognizing all of the military member’s income, determining its tax consequences, and understanding its permanence. Let’s start by understanding some of the underlying principles that apply to everyone as defined in Family Code section 4053:
- A parent’s first and principal obligation is to support the parent’s minor children according to the parent’s circumstances and station in life.
- Both parents are mutually responsible for the support of their children.
- Each parent should pay for the support of the children according to the parent’s ability.
- The state’s top priority is the interests of children.
- Children should share in the standard of living of both parents, regardless of which household has custody of the children, and even if doing so also improves the standard of living for the other parent’s entire custodial household.
The “Guideline” Formula
California law establishes an algebraic formula that seeks to fairly and equitably establish an appropriate amount of child support based on several factors. The formula, codified in Family Code section 4055, is sometimes referred to as the “guideline” formula. The factors in the formula are:
- The amount of time the children spend with each parent,
- The high earner’s “net disposable income” (annual gross income from all sources, less certain specific deductions),
- The combined “net disposable income” of both parties,
- A multiplier that varies according to the combined net disposable income, and
- Another multiplier that varies according to the number of children.
We’ll save the intricacies of the formula for another blog, but one of the most important factors of the guideline calculation is accurately determining the net disposable income of each party. This can be a little confusing for military members.
Defining “Gross Income” for Military Members
In general, “gross income” is broadly defined under Family Code section 4058. It includes, but is not limited to:
- Commissions, salaries, royalties, wages, bonuses, rents, dividends, pensions, interest, trust income, annuities, workers’ compensation benefits, unemployment insurance benefits, disability insurance benefits, social security (SSA) benefits, spousal support (from another relationship), income from proprietorship of a business, employee benefits, and self-employment benefits.
Courts have interpreted this to mean that virtually any gain or recurrent benefit derived from labor, business property, or from any other investment of capital constitutes gross income. California law excludes only a very few specific sources of income from use when calculating child support, including:
- Child support payments, and
- Need-based public assistance programs such as
- TANF (cash aid – formerly known as welfare),
- SNAP (food stamps),
- SSI (federal supplemental security income),
- SSP (California’s State Supplemental Program), and
- Need-based VA benefits (not to be confused with VA disability benefits, which are considered income for the purposes of the guideline formula).
Several appellate court cases have clearly defined employee benefits that are regularly received, and specifically including military benefits and allowances, to be included in the definition of gross income. Therefore, all of the following, and potentially other categories of military pay should be considered income:
- Base pay,
- BAH (or the BAH rate for military housing provided in kind),
- Uniform allowance,
- Sea pay,
- Re-enlistment bonuses,
- Hazardous duty pay,
- Hardship duty pay,
- Hostile fire pay,
- Assignment incentive pay,
- Family separation allowance, and
- Family subsistence supplemental allowance.
Net Disposable Income
Once the gross income from all sources is determined, the guideline formula requires deductions for certain items to arrive at the Net Disposable Income. These deductions include:
- State and federal income tax liability resulting from taxable income.
- Self-employed worker’s additional contribution (the employer’s portion) to Federal Insurance Contributions Act (FICA). This may impact military members or veterans who also run a business.
- Mandatory union dues and retirement contributions.
- Health insurance premiums for the parent and children.
- State disability insurance premiums.
- Child or spousal support actually paid (in another relationship).
- Job-related expenses, if allowed by the court.
- A discretionary “hardship” deduction (often allowed for children of other relationships for whom child support is not paid, such as a child from a new marriage living in your home).
Often overlooked is the impact of the “non-taxable” status for the various categories of income listed above. For example, BAH, BAS and some veterans’ disability payments are not taxable. It is important to divide the payments received into taxable and non-taxable subtotals so the guideline calculation can accurately reflect the tax consequences and net disposable income of each parent after taxes.
The guideline calculation itself is often relegated to a computer program which accepts all of the variables mentioned above (including taxable and non-taxable income and the visitation time share ratio), and additional tax filing status information (single/married/head of household and number of exemptions) then calculates the net disposable income after determining the impact of taxes and other deductions on each parent’s gross income.
Some types of military pay are awarded on a temporary basis while certain conditions apply. Examples include hazardous duty pay, hostile fire pay, and family separation allowance. Others, like re-enlistment bonuses could be paid as a one-time incentive. It would be unfair to continuously impute those sources of income to the military member even after they have stopped. There are several ways a court could manage temporary pay and allowances when determining child support, but only if your attorney understands the situation and the intricacies of the various approaches available.
Dias Law Firm Is Here to Help
We live and work in a community with a large population of military personnel and veterans. Many of our attorneys and staff members have also served in the military or served alongside their military spouses and parents. We know the difficulties veterans and their families face. We can help the court understand your case and ensure the law is properly applied to your specific circumstances. If you are faced with a divorce, child custody, support, or any other legal matter, Dias Law Firm is here to help.
By: David M. Lange, Esq.
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