Rule 1910.16-2. Support Guidelines. Calculation of Monthly Net Income.
Generally, the support amount awarded is based on the parties monthly net income.
(a) Monthly Gross Income. Monthly gross income is ordinarily based on at least a six-month average of a partys income. The support law, 23 Pa.C.S. § 4302, defines the term income and includes income from any source. The statute lists many types of income including, but not limited to:
(1) wages, salaries, bonuses, fees, and commissions;
(2) net income from business or dealings in property;
(3) interest, rents, royalties, and dividends;
(4) pensions and all forms of retirement;
(5) income from an interest in an estate or trust;
(6) Social Security disability benefits, Social Security retirement benefits, temporary and permanent disability benefits, workers compensation, and unemployment compensation;
(7) alimony if, in the trier-of-facts discretion, inclusion of part or all of it is appropriate; and
In determining the appropriateness of including alimony in gross income, the trier-of-fact shall consider whether the party receiving the alimony must include the amount received as gross income when filing his or her federal income taxes. If the alimony is not includable in the partys gross income for federal income tax purposes, the trier-of-fact may include in the partys monthly net income the alimony received, as appropriate. See Pa.R.C.P. No. 1910.16-2(c)(2)(ii).
Since the reasons for ordering payment of alimony vary, the appropriateness of including it in the recipients gross income must also vary. For example, if the obligor is paying $1,000 per month in alimony for the express purpose of financing the obligees college education, it would be inappropriate to consider that alimony as income from which the obligee could provide child support. However, if alimony is intended to finance the obligees general living expenses, inclusion of the alimony as income is appropriate.
(8) other entitlements to money or lump sum awards, without regard to source, including:
(i) lottery winnings;
(ii) income tax refunds;
(iii) insurance compensation or settlements;
(iv) awards and verdicts; and
(v) payments due to and collectible by an individual regardless of source.
The trier-of-fact determines the most appropriate method for imputing lump-sum awards as income for purposes of establishing or modifying the partys support obligation. These awards may be annualized or averaged over a shorter or longer period depending on the cases circumstances. The trier-of-fact may order all or part of the lump sum award escrowed to secure the support obligation during that period. The trier-of-fact shall not include income tax refunds in a partys income, if the trier-of-fact factored in the tax refund when calculating the partys actual tax obligation and monthly net income.
(b) Treatment of Public Assistance, SSI Benefits, Social Security Payments to a Child Due to a Parents Death, Disability or Retirement and Foster Care Payments.
(1) Public Assistance and SSI Benefits. Neither public assistance nor Supplemental Security Income (SSI) benefits shall be included as income for determining support.
(2) Childs Social Security Derivative Benefits.
(i) If a child is receiving Social Security derivative benefits due to a parents retirement or disability:
(A) The trier-of-fact shall determine the basic child support amount as follows:
(I) add the childs benefit to the monthly net income of the party who receives the childs benefit;
(II) calculate the parties combined monthly net income, including the childs benefit;
(III) determine the basic child support amount set forth in the Pa.R.C.P. No. 1910.16-3 schedule; and
(IV) apportion the basic child support amount between the parties based on the partys percentage of the combined monthly net income.
(B) If the obligee receives the childs benefit, the trier-of-fact shall deduct the childs benefit from the basic support obligation of the party whose retirement or disability created the childs benefit.
(C) If the obligor receives the childs benefit, the trier-of-fact shall not deduct the childs benefit from the obligors basic support obligation, even if the obligors retirement or disability created the childs benefit. To illustrate for the parties the impact of the obligor receiving the benefit instead of the obligee, the domestic relations section shall provide the parties with two calculations theoretically assigning the benefit to each household.
(D) The trier-of-fact shall allocate the additional expenses in Pa.R.C.P. No. 1910.16-6 based on the parties monthly net incomes without considering the childs benefit.
(E) In equally shared custody cases, the party with the higher monthly net income, excluding the childs benefit, is the obligor.
(ii) If a child is receiving Social Security derivative benefits due to a parents death:
(A) The trier-of-fact shall determine the surviving parents basic child support amount as follows:
(I) The non-parent obligees monthly net income shall include only those funds the obligee is receiving on the childs behalf, including the Social Security derivative benefit.
(II) If the surviving-parent obligor receives the Social Security derivative benefit, the benefit shall be added to the parents monthly net income to calculate child support.
(3) Foster Care Payments. If either party to a support action is a foster parent and/or is receiving payments from a public or private agency for the care of a child who is not his or her biological or adoptive child, those payments shall not be included in the income of the foster parent or other caretaker for purposes of calculating child support for the foster parents or other caretakers biological or adoptive child.
Example 1. The obligor has monthly net income of $2,000. The obligees monthly net income is $1,500 and the obligee, as primary custodial parent of the parties two children, receives $700 per month in Social Security derivative benefits on behalf of the children as a result of the obligors disability. Add the childrens benefit to the obligees income, which now is $2,200 per month. At the parties combined monthly net income of $4,200, the amount of basic child support for two children is $1,301. As the obligors income is 48% of the parties combined monthly net income, the obligors preliminary share of the basic support obligation is $624. However, because the obligors disability created the childrens Social Security derivative benefits that the obligee is receiving, the obligors obligation is reduced by the amount of the benefit, $700. As the support amount cannot be less than zero, the obligors support obligation is $0 per month. If it were the obligees disability that created the benefit, the obligors support obligation would remain $624. If the obligor were receiving the childrens benefit as a result of the obligors retirement or disability, the obligors income would include the amount of the benefit and total $2,700, or 64% of the parties combined monthly net income. The obligors share of the basic support obligation would then be $833 and would not be reduced by the amount of the childrens benefit because the obligor, not the obligee, is receiving the benefit. Therefore, the obligors support obligation is less if the obligee is receiving the benefit created by the obligor.
Example 2. Two children live with Grandmother who receives $800 per month in Social Security death benefits for the children as a result of Fathers death. Grandmother also receives $500 per month from a trust established by Father for the benefit of the children. Grandmother is employed and earns $2,000 net per month. Grandmother seeks support from the childrens mother, who earns $2,000 net per month. For purposes of calculating Mothers support obligation, Grandmothers income will be $1,300, the amount she receives on behalf of the children in Social Security derivative benefits and the income from the trust. (If Mother were receiving the benefit on behalf of the children it would be added to her income such that Mothers income would be $2,800 and Grandmothers income would be $500.) Therefore, Mothers and Grandmothers combined monthly net incomes total $3,300. The basic support amount at the $3,300 income level for two children is $1,115. As Mothers income of $2,000 is 61% of the parties combined income of $3,300, her portion of the basic support obligation is $680. Since Mothers retirement or disability did not generate the childs derivative benefit, the benefit amount is not subtracted from her portion of the basic support amount and Mother owes Grandmother $680. If Grandmother was not receiving the childrens derivative benefits or income from the trust, her income for purposes of calculating Mothers child support obligation would be zero, and Mother would pay 100% of the basic support amount because Grandmother has no duty to support the children.
Care must be taken to distinguish Social Security from Supplemental Security Income (SSI) benefits. Social Security benefits are income pursuant to subdivision (a) of this rule.
(c) Monthly Net Income.
(1) Unless these rules provide otherwise, the trier-of-fact shall deduct only the following items from monthly gross income to arrive at monthly net income:
(i) federal, state, and local income taxes;
(ii) unemployment compensation taxes and Local Services Taxes (LST);
(iii) F.I.C.A. payments (Social Security, Medicare and Self-Employment taxes) and non-voluntary retirement payments;
(iv) mandatory union dues; and
(v) alimony paid to the other party.
(2) In computing a spousal support or alimony pendente lite obligation, the trier-of-fact shall:
(i) deduct from the obligors monthly net income child support, spousal support, alimony pendente lite, or alimony amounts paid to children and former spouses, who are not part of this action; and
(ii) include in a partys monthly net income alimony pendente lite or alimony received from a former spouse that was not included in the partys gross income, as provided in subdivision (a).
Since the reasons for ordering payment of alimony vary, the appropriateness of including it in the recipients monthly net income must also vary. For example, if the obligor is paying $1,000 per month in alimony for the express purpose of financing the obligees college education, it would be inappropriate to consider that alimony as income from which the obligee could provide child support. However, if alimony is intended to finance the obligees general living expenses, inclusion of the alimony as income is appropriate.
(d) Reduced or Fluctuating Income.
(1) Voluntary Reduction of Income. When either party voluntarily assumes a lower paying job, quits a job, leaves employment, changes occupations or changes employment status to pursue an education, or is fired for cause, there generally will be no effect on the support obligation.
(2) Involuntary Reduction of, and Fluctuations in, Income. No adjustments in support payments will be made for normal fluctuations in earnings. However, appropriate adjustments will be made for substantial continuing involuntary decreases in income, including but not limited to the result of illness, lay-off, termination, job elimination or some other employment situation over which the party has no control unless the trier of fact finds that such a reduction in income was willfully undertaken in an attempt to avoid or reduce the support obligation.
(3) Seasonal Employees. Support orders for seasonal employees, such as construction workers, shall ordinarily be based upon a yearly average.
(4) Earning Capacity. If the trier of fact determines that a party to a support action has willfully failed to obtain or maintain appropriate employment, the trier of fact may impute to that party an income equal to the partys earning capacity. Age, education, training, health, work experience, earnings history and child care responsibilities are factors which shall be considered in determining earning capacity. In order for an earning capacity to be assessed, the trier of fact must state the reasons for the assessment in writing or on the record. Generally, the trier of fact should not impute an earning capacity that is greater than the amount the party would earn from one full-time position. Determination of what constitutes a reasonable work regimen depends upon all relevant circumstances including the choice of jobs available within a particular occupation, working hours, working conditions and whether a party has exerted substantial good faith efforts to find employment.
(e) Net Income Affecting Application of the Support Guidelines.
(1) Low-Income Cases.
(i) If the obligors monthly net income and corresponding number of children fall into the shaded area of the schedule set forth in Pa.R.C.P. No. 1910.16-3, the basic child support obligation shall be calculated initially by using the obligors monthly net income only. For example, if the obligor has monthly net income of $1,100, the presumptive support amount for three children is $110 per month. This amount is determined directly from the schedule in Pa.R.C.P. No. 1910.16-3. Next, the obligors child support obligation is calculated by using the parties combined monthly net incomes and the appropriate formula in Pa.R.C.P. No. 1910.16-4. The lower of the two calculated amounts shall be the obligors basic child support obligation.
Example 1: The parties have two children. The obligor has monthly net income of $1,500, which falls into the shaded area of the schedule for two children. Using only the obligors monthly net income, the amount of support for two children would be $472. Next, calculate support using the parties combined monthly net incomes. The obligee has monthly net income of $2,500 so the combined monthly net income of the parties is $4,000. The basic child support amount at that income level for two children is $1,269. As the obligors income is 38% of the combined monthly net income of the parties, the obligors share of the basic support amount is $482. As the amount of support the obligor would pay using only the obligors income is less than the amount calculated using the parties combined monthly net incomes, the lower amount would be awarded, and the obligors basic child support obligation would be $472.
(ii) In computing a basic spousal support or alimony pendente lite obligation, the presumptive support amount shall not reduce the obligors monthly net income below the Self-Support Reserve of $981 per month.
Example 2: If the obligor earns $1,000 per month and the obligee earns $300 per month, the formula in Pa.R.C.P. No. 1910.16-4(a)(1)(Part B) would result in a support obligation of $213 per month ($1,000 x 33%) or $333 minus ($300 x 40%) or $120 for a total of $213). Since this amount leaves the obligor with only $787 per month, it must be adjusted so that the obligor retains at least $981 per month. The presumptive minimum spousal support amount, therefore, is $19 per month in this case.
(iii) If the obligors monthly net income is $981 or less, the trier-of-fact may award support only after consideration of the parties actual financial resources and living expenses.
(2) High-Income Cases. If the parties combined monthly net income exceeds $30,000 per month, child support, spousal support, and alimony pendente lite calculations shall be pursuant to Pa.R.C.P. No. 1910.16-3.1.
See Hanrahan v. Bakker, 186 A.3d 958 (Pa. 2018)
(f) Child Tax Credit. In order to maximize the total income available to the parties and children, the trier-of-fact may award, as appropriate, the federal child tax credit to the non-custodial parent, or to either parent in cases of equally shared custody, and order the other party to execute the waiver required by the Internal Revenue Code, 26 U.S.C. § 152(e). The tax consequences associated with the federal child tax credit must be considered in calculating the partys monthly net income available for support.
Subdivision (a) addresses gross income for purposes of calculating the support obligation by reference to the statutory definition at 23 Pa.C.S. § 4322. Subdivision (b) provides for the treatment of public assistance, SSI benefits, Social Security derivative benefits, and foster care payments.
Subdivision (c) sets forth the exclusive list of the deductions that may be taken from gross income in arriving at a partys net income. When the cost of health insurance premiums is treated as an additional expense subject to allocation between the parties under Pa.R.C.P. No. 1910.16-6, it is not deductible from gross income. However, part or all of the cost of health insurance premiums may be deducted from the obligors gross income pursuant to Pa.R.C.P. No. 1910.16-6(b) in cases in which the obligor is paying the premiums and the obligee has no income or minimal income. Subdivision (c) relates to spousal support or alimony pendente lite awards when there are multiple families. In these cases, a partys monthly net income must be reduced to account for his or her child support obligations, as well as any pre-existing spousal support, alimony pendente lite or alimony obligations being paid to former spouses who are not the subject of the support action.
Subdivision (d) has been amended to clarify the distinction between voluntary and involuntary changes in income and the imputing of earning capacity. Statutory provisions at 23 Pa.C.S. § 4322, as well as case law, are clear that a support obligation is based upon the ability of a party to pay, and that the concept of an earning capacity is intended to reflect a realistic, rather than a theoretical, ability to pay support. Amendments to subdivision (d) are intended to clarify when imposition of an earning capacity is appropriate.
Subdivision (e) has been amended to reflect the updated schedule in Pa.R.C.P. No. 1910.16-3 and the increase in the Self-Support Reserve (SSR). The schedule now applies to all cases in which the parties combined monthly net income is $30,000 or less. The upper income limit of the prior schedule was only $20,000. The support amount at each income level of the schedule also has changed, so the examples in Pa.R.C.P. No. 1910.16-2 were revised to be consistent with the new support amounts.
The SSR is intended to assure that obligors with low incomes retain sufficient income to meet their basic needs and to maintain the incentive to continue employment. When the obligors monthly net income or earning capacity falls into the shaded area of the schedule, the basic child support obligation can be derived directly from the schedule in Pa.R.C.P. No. 1910.16-3. There is no need to use the formula in Pa.R.C.P. No. 1910.16-4 to calculate the obligors support obligation because the SSR keeps the amount of the obligation the same regardless of the obligees income. The obligees income may be a relevant factor, however, in determining whether to deviate from the basic guideline obligation pursuant to Pa.R.C.P. No. 1910.16-5 and in considering whether to require the obligor to contribute to any additional expenses under Pa.R.C.P. No. 1910.16-6.
Since the schedule in Pa.R.C.P. No. 1910.16-3 sets forth basic child support only, subdivision (e)(1)(ii) is necessary to reflect the operation of the SSR in spousal support and alimony pendente lite cases. It adjusts the basic guideline obligation, which would otherwise be calculated under the formula in Pa.R.C.P. No. 1910.16-4, so that the obligors income does not fall below the SSR amount in these cases.
Previously, the SSR required that the obligor retain at least $748 per month. The SSR now requires that the obligor retain income of at least $867 per month, an amount equal to the 2008 federal poverty level for one person. When the obligors monthly net income is less than $867, subdivision (e)(1)(iii) provides that the trier-of-fact must consider the parties actual living expenses before awarding support. The guidelines assume that at this income level the obligor is barely able to meet basic personal needs. In these cases, therefore, entry of a minimal order may be appropriate. In some cases, it may not be appropriate to order support at all.
The schedule at Pa.R.C.P. No. 1910.16-3 sets forth the presumptive amount of basic child support to be awarded. If the circumstances warrant, the trier-of-fact may deviate from that amount under Pa.R.C.P. No. 1910.16-5 and may also consider a partys contribution to additional expenses, which are typically added to the basic amount of support under Pa.R.C.P. No. 1910.16-6. If, for example, the obligor earns only $900 per month but is living with his or her parents, or has remarried and is living with a fully-employed spouse, the trier-of-fact may consider an upward deviation under Pa.R.C.P. No. 1910.16-5(b)(3) or may order the party to contribute to the additional expenses under Pa.R.C.P. No. 1910.16-6. Consistent with the goals of the SSR, however, the trier-of-fact should ensure that the overall support obligation leaves the obligor with sufficient income to meet basic personal needs and to maintain the incentive to continue working so that support can be paid.
Subdivision (e) also has been amended to eliminate the application of Melzer v. Witsberger, 480 A.2d 991 (Pa. 1984), in high-income child support cases. In cases in which the parties combined net monthly income exceeds $30,000, child support will be calculated in accordance with the three-step process in Pa.R.C.P. No. 1910.16-3.1(a).
The SSR has been increased to $931, the 2012 federal poverty level for one person. Subdivision (e) has been amended to require that when the obligors income falls into the shaded area of the basic child support schedule in Pa.R.C.P. No. 1910.16-3, two calculations must be performed. One calculation uses only the obligors income and the other is a regular calculation using both parties incomes, awarding the lower amount to the obligee. The two-step process is intended to address those cases in which the obligor has minimal income and the obligees income is substantially greater.
The rule has been amended to provide that a partys support obligation will be reduced by the childs Social Security derivative benefit amount if that partys retirement or disability created the benefit and the benefit is being paid to the household in which the child primarily resides or the obligee in cases of equally shared custody. In most cases, payment of the benefit to the obligees household will increase the resources available to the child and the parties. The rule is intended to encourage parties to direct that the childs benefits be paid to the obligee.
The provisions of this Rule 1910.16-2 adopted September 29, 1989, effective September 30, 1989, 19 Pa.B. 4151; rescinded and replaced January 27, 1993, effective immediately, 23 Pa.B. 701; amended December 7, 1998, effective April 1, 1999, 28 Pa.B. 6162; amended October 27, 2000, effective immediately, 30 Pa.B. 5837; amended October 30, 2001, effective immediately, 31 Pa.B. 6273; amended November 9, 2004, effective immediately, 34 Pa.B. 6315; amended September 27, 2005, effective four months from date of this order, 35 Pa.B. 5643; amended January 5, 2010, effective immediately, 40 Pa.B. 413; amended January 12, 2010, effective May 12, 2010, 40 Pa.B. 586; amended August 26, 2011, effective September 30, 2011, 41 Pa.B. 4849; amended November 5, 2012, effective December 5, 2012, 42 Pa.B. 7091; amended April 9, 2013, effective August 9, 2013, 43 Pa.B. 2272; amended April 29, 2015, effective July 1, 2015, 45 Pa.B. 2352; amended February 10, 2017, effective May 1, 2017, 47 Pa.B. 1123; amended February 9, 2018, effective April 1, 2018, 48 Pa.B. 1093; amended December 28, 2018, effective January 1, 2019, 49 Pa.B. 170. Immediately preceding text appears at serial pages (388174) to (388175) and (390533) to (390537).
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