Why Georgia's Child Support Guidelines Are Unconstitutional

• Citation: Vol. 6 No. 2 Pg. 0001
• Pages: 0001
• Publication year: 2000

Georgia Bar Journal Volume 6.

GSB Vol. 6, No. 2, Pg. 1. Why Georgia's Child Support Guidelines Are Unconstitutional

Georgia State Bar Journal
Vol. 6, No. 2, October 2000

"Why Georgia's Child Support Guidelines Are Unconstitutional"

By William C. Akins

Prior to the adoption of Georgia's Child Support Guidelines, codified in O.C.G.A. 19-6-15, (hereinafter the "Guidelines") in 1989, child support was determined by balancing the needs of the child against the noncustodial parent's (hereinafter the "NCP") ability to pay. In Georgia and other jurisdictions using similar criteria, this resulted in widely varying obligations. In an effort to bring some predictability and uniformity to child support awards, the federal government mandated the use of economically based numeric guidelines as a requirement for a state's continued receipt of federal funds under Title IV-D of the Social Security Act.1 The Guidelines adopted by Georgia were taken, with little modification, from those used by the State of Wisconsin (hereinafter the "Wisconsin Model"). Unfortunately for NCPs in Georgia, the Wisconsin Model was designed for use in low-income and poverty situations in which the obligors pay little, if any income tax. As a result of the erroneous economic assumptions upon which these Guidelines are based, low income NCPs are often pushed below the poverty income level and higher income NCPs pay grossly excessive child support payments which are tantamount to hidden alimony.2 Perversely, the federal laws in effect in 1989 rewarded states based on total dollars of child support collected. Those laws were amended in 1998 to reward efficiency of collection, rather than gross collections.3 That is, from 1989 to 1998, the federal government provided welfare and collection incentive funds to the states based on the gross amount of the total child support payments recovered from NCPs, thus creating a corresponding incentive to establish support obligations as high as possible without regard to appropriateness of amount The 1998 revision bases welfare and incentive funding on the percentage of child support awards collected, thus rewarding efficient recovery of appropriate awards. The effect of the earlier federal statute and Georgia's adoption of Wisconsin Style Guidelines is one of the most onerous child support schemes in the country, and one which violates both substantive due process and equal protection guarantees of the Constitutions of the United States and the State of Georgia

How do the Guidelines Work?

The Guidelines calculate presumptive child support obligations based on a range of percentages of the NCP's gross income with no consideration for payroll deductions for federal and state income tax, social security mandatory insurance contributions, etc.4 Furthermore, current tax laws grant all tax benefits to the custodial parent (hereinafter, the "CP"). 5 In Georgia, trial courts are powerless to apportion tax benefits absent an agreement between the parties.6 While the Guidelines provide some 18 bases for departing from the presumptive award,7 there is no guidance as to how they are to be applied and they are so seldom addressed as to be non-existent in any practical sense. Let us examine how the application of Georgia's Guidelines would affect a hypothetical, typical couple.

Example 1

Dick and Jane have filed for divorce. They have two children. Dick's gross income is $30,000 per year and Jane's is $21,000. Assume that both pay federal and state income taxes, medicare and social security, with no insurance or retirement contributions, and that during their marriage, they both supported their children from their combined after-tax, take-home pay of $41,069. In the divorce, Jane is awarded physical custody of the children. Dick is given alternating weekend and holiday visitation with some longer stretches in the summer. He is also ordered to pay 25.5% (the mid-point percentage) of his gross monthly income as child support, or $638. Dick's after-tax, take-home pay, from which he supported his children while married, is now $1,912. The $638 he has been ordered to pay is in reality, then, 33% of Dick's after tax take-home pay. Thus, after paying his basic child support, Dick has $1,274 left from which to pay rent, utilities, automobile loans, insurance and maintenance, food, health insurance, and clothing. In addition, he will also have to pay to feed, house, and clothe his children during visitation periods, not to mention birthday and Christmas presents. Jane, on the other hand, now takes home $1,752 after taxes. She then receives, tax-free, $638 from Dick for a total monthly net income of $2,390. It should be noted that, even before receiving Dick's child support payment, Jane's child tax credits and earned income credit of $246 ($2952 annually) almost totally offsets the $248 in federal and state income tax, social security and medicare for which she is liable. After taxes and child support, Jane now nets $28,677 annually, or 70% of the combined marital net income. Dick's after tax, after child support net annual income is $15,296. Interestingly, Dick makes 58% of their combined gross income of $51,000.

Example 2

Assume that with only one child, Dick made $70,000 per year gross or $62,950 federal taxable income, and Jane made only $40,000 or $28,150 in federal taxable income. After the divorce, Dick's after-tax income would be $46,631 ($70,000 less $14,300 federal income tax, $3,713 state income tax, $4,340 social security tax and $1,015 Medicare tax). These calculations include the $4,300 federal standard exemption for Dick and $6,350 for Jane (as head of household), a $2,750 personal exemption for each and a $2,750 child exemption and $500 child credit for Jane. Dick then pays Jane $14,000 (20%) per year as child support, which is non-taxable income for Jane. Net after-tax, after child support incomes? Dick makes $32,631 and Jane makes $45,5533, or 14% over her gross. It should be noted that such excess is not just a matter of a few dollars. In the first example, Dick's $638 monthly obligation is 15% or $81 higher than in North Carolina, 28% or $141 more than South Carolina, 21% or $112 higher than Alabama, and $11 higher than in Florida. In the second example, Dick's $1,167 obligation is 80% or $518 per month higher than the average obligation for his and Jane's income levels in all four of the aforesaid states.8 And these figures presume no visitation. Any visitation arrangement would entail further reductions. In addition, although these states' guidelines consider CP income, they ignore tax benefits, result in a higher standard of living for the CP, and exceed actual child care costs. And you thought divorce was an equitable proceeding.

The Economic Problems

The Guidelines are not based on sound economic principles The economic flaws in the Guidelines include, without limitation, the following: (a) An intact family supports its children from both parents' incomes. Therefore, a sound method for calculating support awards requires consideration of the CP's income at some point in the calculation of the presumptive award. The Guidelines do not do this, instead; they base the presumptive award solely on the NCP's income. The CP's income is only addressed as a special circumstance for departing from the presumptive award, which circumstance is seldom, if ever, considered. (b) The Guidelines create an obligation based on a percentage of pre-tax income. In other words, a 17% obligation to a person who loses 35% of his income to taxes and other involuntary deductions requires 26% of his aftertax income to meet this obligation. Similarly a 23% award becomes a 35% obligation. No economic study supports such a result. It is simply not based on child cost patterns. (c) The absolute amount of money expended on children decreases as a percentage of intact family spending as income rises. In other words, higher income households do not spend as much of their income on their children as lower income families. The Guidelines do not reflect this economic reality, however, imposing a straight line percentage on all income levels without any cap. (d) The Guidelines do not contain a provision for selfsupport reserve. That is, an NCP whose gross income is just above the poverty level will be forced below the poverty level by making support payments required by the Guidelines, a result which is likely to add to the public assistance roll as the result of government action. While the Guidelines allow this issue to be addressed by a finder of fact on a discretionary basis, there is no assurance of reasonably consistent application of such deviation. (e) The economic study which underlies the Wisconsin Model upon which the Guidelines are based states that "obligor-only" guidelines should only be used at the poverty level, not for general application. (f) The Guidelines result in presumptive awards so far above child rearing costs as to result in the granting of hidden alimony without the satisfaction of the requirements for alimony awards under Georgia law. Dr. Robert Williams of Policy Studies, Inc. in Denver, Colorado, testified at length before Georgia Commission on Child Support (the "Commission") on May 1, 1998. As to the use of guidelines designed for poverty/welfare cases, Dr. Williams was asked "[w]hen the federal government mandated states adopt presumptive-type guidelines and the advisory panel ... specifically recommended against Wisconsin-style...