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Indiana Child Support Definitions

Introduction.

Income Shares Model. After review of five approaches to the establishment of child support, the Income Shares Model was selected for the Indiana Guidelines. This model was perceived as the fairest approach for children because it is based on the premise that children should receive the same proportion of parental income after a dissolution that they would have received if the family had remained intact. Because it then apportions the cost of children between the parents based on their means, it is also perceived as being fair to parents. In applying the Guidelines, the following
steps are taken:

1. The gross income of both parents is added together after certain adjustments are made. A percentage share of income for each parent is then
determined.

2. From the parents’ combined income, work-related child care expense, if any, is deducted.

3. The total, after subtracting any work-related child care expense, is taken to the support tables, referred to in the Indiana Guidelines as the
Guideline Schedules for Weekly Support Payments, to determine the total cost of supporting a child or children.

4. Work-related child care expenses and the weekly costs of health insurance premiums for the child(ren) are then added to the basic child support
obligation.

5. The child support obligation is then prorated between the parents, based on their proportionate share of the weekly adjusted income, hence the
name "income shares."

The Income Shares Model was developed by The Institute for Court Management of the National Center for State Courts under the Child Support
Guidelines Project. This approach was designed to be consistent with the Uniform Marriage and Divorce Act,

Minimum Support.

The Guidelines schedules for weekly support payments do not provide an amount of support for couples with combined weekly adjusted income of less than $100.00. Consequently the Guidelines do not establish a minimum
support obligation. Instead the facts of each individual case must be examined and support set in such a manner that the obligor is not denied a means of self-support at a subsistence level. It is, however, recommended that a specific amount of support be set. Even in situations where the noncustodial parent has no income, courts have routinely established a child support obligation at some minimum level. An obligor cannot be held in contempt for failure to pay support when there is no means to pay, but the obligation accrues and serves as a reimbursement if the obligor later acquires the ability to meet the obligation.

Definition of Weekly Gross Income.

1. Definition of Weekly Gross Income. For purposes of these Guidelines, "weekly gross income" is defined as actual weekly gross income of the parent if employed to full capacity, potential income if unemployed or underemployed and imputed income based upon "in-kind" benefits. Weekly gross income of each parent includes income from any source, except as excluded below, and includes, but is not limited to, income from salaries, wages, commissions,
bonuses, overtime, partnership distributions, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workmen’s compensation benefits, unemployment insurance benefits, disability insurance benefits, gifts, prizes, and alimony or maintenance received from other marriages. Specifically excluded are benefits from means-tested public assistance programs, including, but not limited to Temporary Aid To Needy Families (TANF), Supplemental Security Income, and Food Stamps.


2. Self-Employment, Business Expenses, Payments and Related Issues. Weekly Gross Income from self-employment, operation of a business, rent, and royalties is defined as gross receipts minus ordinary and necessary expenses. In general, these types of income and expenses from self-employment or operation of a business should be carefully reviewed to restrict the deductions to reasonable out-of-pocket expenditures necessary to produce
income. These expenditures may include a reasonable yearly deduction for necessary capital expenditures. Weekly gross income from self-employment may differ from a determination of business income for tax purposes.

Expense reimbursements or in-kind payments received by a parent in the course of employment, self-employment, or operation of a business should be counted as income if they are significant and reduce personal living expenses. Such payments might include a company car, free housing, or reimbursed meals.

The self-employed shall be permitted to deduct that portion of their F.I.C.A. tax payment that exceeds the F.I.C.A. tax that would be paid by an employee earning the same Weekly Gross Income.

3. Unemployed, Underemployed and Potential Income. If a parent is voluntarily unemployed or underemployed, child support shall be calculated based on a determination of potential income. A determination of potential income shall be made by determining employment potential and probable earnings level based on the obligors work history, occupational qualifications, prevailing job opportunities, and earnings levels in the community. If there is no work history and no higher education or vocational training, it is suggested that weekly gross income be set at least at the
federal minimum wage level.

4. Natural and Adopted Children Living in the Household. In determining a support order, there should be an adjustment to Weekly Gross Income of parents who have natural or legally adopted children living in their households, and who were born or adopted subsequent to the prior support order.

Additions to the Basic Child Support Obligation.

1. Work-Related Child Care Expense. Child care costs incurred due to employment or job search of either parent, should be added to the basic obligation. It includes the separate cost of a sitter, day care, or like care of a child or children while the custodial parent works or actively seeks employment. Such child care costs must be reasonable and should not exceed the level required to provide quality care for the
children. Child care costs required for active job searches are allowable on the same basis as costs required in connection with employment.

2. Cost of Health Insurance For Child(ren). The weekly cost of health insurance premiums for the child(ren) should be added to the basic obligation whenever
either parent actually incurs the premium expense or a portion of such expense.

3. Extraordinary Health Care Expense.

4. Extraordinary Educational Expense.

Situations Calling for Deviation from Guidelines.

An infinite number of situations may prompt a judge to deviate from the Guideline amount. For illustration only, and not as a complete list, the following examples are offered:

1. One or both parties pay union dues as a condition of employment.
2. A party provides support for an elderly parent.
3. The noncustodial parent purchases school clothes.
4. The noncustodial parent has extraordinary medical expenses for himself or herself.
5. Both parents are members of the armed forces and the military provides housing.
6. The children spend substantially more time with the noncustodial parent than in the average case.
7. The obligor is still making periodic payments to a former spouse pursuant to a prior Dissolution Decree.
8. One of the parties is required to travel an unusually long distance in the course of employment on a regular or daily basis and incurs an unusually large expense for such travel. The custodial or noncustodial parent incurs significant travel expense in exercising visitation.

No attempt has been made to define every possible situation that could conceivably arise when determining child support and to prescribe a
specific method of handling each of them.