A matter of fairness

Our view: The legislature can restore equity between divorced or separated parents by adopting Maryland's first update to child support guidelines in more than 20 years

March 12, 2010

The last time Maryland updated its guidelines for calculating child support, Ronald Reagan was in the White House, "The Cosby Show" was at the top of the ratings, and Corey Haim was at the pinnacle of his film career. The year was 1988, and under pressure from the federal government, Maryland developed a matrix of how much parents were expected to spend for their children's food, clothing, housing and so on, based on their combined income level. The idea was that children should not have to suffer a lower standard of living just because their parents were divorced or separated, and that the parents should bear a responsibility for the costs proportionate to their income. The states were supposed to update their guidelines every four years based on changes in costs and spending patterns, but Maryland never did.

This year, a bill to update Maryland's system based on economic data from this century overwhelmingly passed in the state Senate, 43-2, but its fate in a vote expected Friday in the House Judiciary Committee is unclear. Some lawmakers have questioned whether an update is necessary, and certainly whether it is appropriate to enact a bill that could mean higher child-support payments during a recession. But those objections reflect a misunderstanding of Maryland's child support system and of the effect the legislation would have.

Here's how the system works. In Maryland, a typical household of two parents and two children earns $89,000 a year, or about $7,500 a month. The old guidelines assumed such a family would spend $1,391 a month to raise the children. That figure is divided between the parents proportionally to their income - so if, say, the noncustodial parent earned 70 percent of the money, he or she would pay 70 percent of the expenses, or $974 a month, and the custodial parent would pay for the remainder.

But the new guidelines recognize that the prices of the goods and services necessary to raise a child have not risen in perfect proportion with each other or with household incomes for the last 22 years. Expenses for some things have gone up faster than others and now capture a larger share of household income than they did when the guidelines were established. Housing in Maryland, for example, is much more expensive than it used to be. The new guidelines estimate that the same family now spends $1,563 a month to raise its two kids, a difference of $172.

Opponents of the legislation would argue that the bill will hurt the noncustodial parent by forcing him or her to increase monthly payments, in our example by 70 percent of $172, or $120. That's a 12 percent increase. But what they fail to appreciate is that the custodial parent is already incurring those expenses, and he or she is picking up the entire tab. In this case, the guidelines assume the custodial parent is spending $417 a month to raise the children, but because of the increases in costs during the last 22 years, he or she is actually spending $589, or 41 percent more than the guidelines assume. The custodial parent in this case makes 30 percent of the income but is bearing 100 percent of the increased costs.

The bill makes two other important updates to the guidelines. One benefits low-income, noncustodial parents by expanding the range under which judges are advised to assign minimal child-support requirements of between $20 and $150 a month. Currently, that applies to those with incomes of up to $850 a month, but the new guidelines would extend it to people who make up to $1,250 a month, a figure designed to reflect the current minimum wage.

The second change is to create guidelines for families with higher household incomes. The old matrix only goes up to a combined household income of $10,000 a month, but there are far more families in Maryland who earn more than that than there were 22 years ago. The new guidelines include figures for incomes up to $30,000 a month, which makes the calculation more predictable and less subjective.

Legislators may see these as big changes to the system, but the reason they seem so significant is that Maryland has been derelict in updating its standards for so long. Delaying now will only make matters worse when a reckoning comes. It's also important to note that the new guidelines won't automatically change child-support obligations; they would only have an effect for new cases or those in which a parent goes to court to request a revision. A recession may seem like a bad time to enact legislation that would force some noncustodial parents to pay more, but a recession is also a bad time to force custodial parents to continue to shoulder higher costs by themselves. The question isn't about increasing child support, it's about whether the costs that are already being incurred should be shared fairly.

Readers respond
What the guidelines erroneously and unfairly do is base the child support payments on gross pay rather than excluding actual income tax liability, Social Security tax, Medicare tax. So while a parent may have a gross income of $89,000, the noncustodial parent's actual available income for spending is actually a lot less.

Ted

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