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Minnesota Child Support: Shared Income Formula

In 2005, the Minnesota legislature amended the state’s child support guidelines and adopted a new formula to calculate child support obligations. This new formula, known as the income-shares or shared income formula makes it necessary to take the combined gross (i.e. pre-tax) monthly income of both parents into account in order to come up with the appropriate amount of support. The previous law only required the court to consider the net income (i.e. after tax) of the non-custodial, or obligor, parent.

Calculating Basic Child Support

The shared income formula went into effect on January 1, 2007. Under the new formula, basic child support is calculated by combining each parent’s gross monthly income, after taking any available deductions, to produce the parental income for determining child support (PICS).

Some of the deductions that may be taken to reduce a parent’s monthly gross income include:

  • Spousal maintenance
  • Child support payments to children from a previous relationship
  • Non-joint children living in the home
  • Child care expenses

The non-custodial parent also may receive a deduction if he or she is awarded a certain percentage of parenting time with the child. Additionally, the parent required to pay for the child’s health insurance and any uncovered health expenses may also receive a deduction from his or her gross monthly income reflecting those expenses. Items that generally are not considered income for purposes of calculating the gross monthly income include:

  • Overtime compensation
  • Public assistance benefits
  • A new spouse’s income (if either parent married or remarried)

Once the parents’ PICS numbers are calculated, the next step is determining each parent’s pro rata share, which is the percentage of the ultimate support obligation each parent will be required to meet. The pro rata share is calculated by dividing each parent’s gross monthly income by the PICS.

Next, the PICS number is applied to Minnesota’s basic child support guidelines table to calculate the parents’ combined basic support obligations based on the number of children they share. Lastly, the combined basic support obligation is divided to reflect each parent’s pro rata share, providing the expected amount of child support each parent must pay.

Modifying Child Support Orders Based on the New Law

Once the shared income formula became law, the legislature imposed a one year ban on parents using the new formula as a basis to request a modification of their support orders. Starting January 1, 2008, however, parents were permitted to petition the court to modify their child support obligations based on the new formula.

In order to seek a modification of a child support order, the parent must be able to prove there has been a substantial change in circumstances that makes the current support order unreasonable and unfair. Generally, a change in the law by itself is not enough to qualify as a “substantial change in circumstances.”

However, the Minnesota Court of Appeals decided a case in May 2009 that makes it clear that the shared income formula may be sufficient to support a showing of a substantial change in circumstances warranting a modification of a child support order.

Minnesota Statute §518A.39(2)(b)(1) states that there is a presumption of a substantial change in circumstances if applying the child support guidelines to a parent’s current situation results in at least a 20% increase or decrease and at least a $75 per month increase or decrease in the amount of child support owed.

In Rose v. Rose, 765 N.W.2d 142 (Minn. App. 2009), the court found that so long as the parent could show that he or she met the minimum 20%/$75 requirement, the parent had successfully shown a substantial change in circumstances, even though it was caused by a change in the law. However, in order to receive a modification, the parent still must prove how the change in circumstances makes the existing support order unfair and unreasonable.

Conclusion

The changes in Minnesota’s child support laws have not made calculating support obligations any easier. An attorney experienced in handling child support orders and modifications can help you determine your gross monthly income, whether you qualify for any deductions and whether you meet the requirements to modify your current support order.