Pennsylvania Divorce Lawyer & Attorney : PA Family Law Blog : Fox Rothschild Law Firm : Family Law Serving Philadelphia, Pittsburgh, Bucks County, Montgomery County, Chester County

When parties separate, money inherently becomes a key issue because it is not possible to support two households at the same level with the same income that previously supported just one household.  And in most cases, one party files for child support. Practitioners must advise their clients that a child support obligation only begins on the date that the party files the complaint for child support, and not sooner.    

Once a complaint is filed, how do the courts determine each party’s income for child support purposes?  

The Pennsylvania Support Guidelines determine each party’s child support obligation based upon his or her net monthly income, and Pennsylvania law includes income from any source as income for child support purposes. 23 Pa.C.S.A. § 4302; Pa.R.C.P. 1910.16-2(a). 

To determine a party’s child support obligation, the court first calculates the party’s yearly gross income by totaling the person’s income from all sources without consideration of any deductions. The statute, (23 Pa.C.S.A. § 4302), 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 discretion of the trier of fact, inclusion of part or all of it is appropriate; and
8. other entitlements to money or lump sum awards, without regard to source, including lottery winnings, income tax refunds, insurance compensation or settlements; awards and verdicts; and any form of payment due to and collectible by an individual regardless of source. 

Then, the monthly gross income is determined based upon a six-month average of all the party’s income from any source. Pa.R.C.P. 1910.16-2(a). Finally, the court determines the party’s net monthly income pursuant to Pa.R.C.P. 1910.16-2(c)(1), which provides for only the following deductions: 

1. federal, state, and local income taxes;
2. F.I.C.A. payments and non-voluntary retirement payments;
3. union dues; and
4. alimony paid to the other party. 

Once the court has determined each party’s net monthly income, then the court uses a table to determine the support obligation. The basis support schedule can be found in the Pennsylvania Support Guidelines. The guidelines also provide the methodology for calculating support. 

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The Pennsylvania Supreme court recently decided that under certain circumstances a sperm donor who is known to the mother may not have to provided child support for the child(ren) conceived through artificial insemination.

Although the facts of the case are fairly unique, the holding by the Court was written after looking at the increasingly-common area of assisted conception and the absence of PA laws on the topic.

In the Ferguson v. McKiernan case, sperm donor and mother had a past romantic relationship. However, mother promised sperm donor that he would never be responsible for any children if he donated his sperm through a fertility clinic. For 5 years mother kept this promise, but then sued him for child support for the twins born from this arrangement.

During the 5 years, father moved, married and had his own family. By agreement, his genetic link to the children was not revealed. Indeed , the Court found that Mother acted in numerous ways that were fraudulent, including, but not limited to, putting her estranged husband’s name on the birth certificate, telling the fertility doctor she was married, bringing along another man as her “husband” to circumvent the doctor’s refusal to implant single women, and misrepresenting her ability to conceive to the sperm donor.

The court looked at the spectrum of cases regarding child support obligations where the parties are not married. On one side, they affirmed that children born from a sexual relationship are always entitled to child support, and neither parent can give up the child’s right before or after birth. On the other side, anonymous sperm donors are absolved of child support obligations, because to do otherwise would mean that such arrangements would not occur. Here, the court found that the agreement between mother and sperm donor was enforceable because:

1. the existence of the agreement was what allowed the conception to occur; and
2. Mother’s fraudulent conduct, inconsistent testimony, and deliberate falsehoods were enough to show that sperm donor would not have donated his sperm without the agreement.

For practitioners or unmarried people contemplating assisted conception, it is important to have the circumstances of the arrangement carefully reviewed and to have an agreement in place which reflects the parties’ wishes before conception occurs.

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In Pennsylvania, parents have a duty to support their children until the children are emancipated.

Whether a child is emancipated depends on the facts of each particular case. In the vast majority of cases, once a child turns 18 and has graduated from high school, the child is emancipated. This is different from other states that require a parent to continue to pay support while a child is in college. 

Unlike other states, Pennsylvania’s law does not require that parents contribute toward college tuition or other higher education expenses after a child is emancipated.

In order to terminate a child support order,  a Petition to Vacate needs to be filed several weeks prior to the child’s eighteenth birthday or high school graduation, whichever event occurs later. The termination will not happen automatically.

The Pennsylvania Superior Court recently addressed a situation where a child did not become emancipated after she turned eighteen and graduated from high school.  In that case, the daughter suffered from epilepsy and debilitating headaches. The daughter is 19, enrolled in college full-time, dances in a theater group, and works a part-time job twenty hours per week. The father attempted to terminate his child support obligation for the daughter; however, the Superior Court found that the daughter’s migraines and the medication that she must take for them reduce her ability to support herself. As a result, the Superior Court determined that the daughter was not emancipated and the father was required to continue his support payments to the mother.

The Kotzbauer v. Kotzbauer case does not address how long the father’s support obligation will continue. Several factors would have an impact on this issue, including the child's marriage, moving away from home, a change in her employment, or her cohabiting.  These factor and others would likely impact how the court would decide the case in the future.

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Generally, Pennsylvania law provides that the parent who has primary physical custody of the child is entitled to claim the dependency exemption, and the child tax credit, on his or her income tax return.  If the parents share physical custody, the parent who earns more income is entitled to claim these tax benefits. However, this is negotiable in divorce and child support actions.

The ability to claim the child on your income tax return can benefit a parent by changing the filing status from “single” or “married filing separately” to “head of household”, a more beneficial filing status under the tax code.  This may decrease the amount of tax you owe.  However, the dependency exemption may be a greater benefit to the non-custodial parent and, therefore, may be worth negotiating in a divorce or support action.

For example, if claiming the child as a dependent will save the non-custodial parent $5,000.00 in tax, but will only save the custodial parent $1,000.00 in tax, then the non-custodial parent should claim the child as a dependent and pay the custodial parent the $1,000.00 she would otherwise would have saved.  The net savings to the non-custodial parent is $4,000.00. (And, a good lawyer could even negotiate sharing this $4,000.00 tax savings between the parties!)

A second benefit for the parent claiming the child is the Child Tax Credit.  The Child Tax Credit allows you to claim $1,000.00 for each qualifying child. So, in a family with three children, the credit is worth $3,000.00.  This credit also reduces the tax you owe.  However, the Child Tax Credit is phased out for certain higher income tax payers.  Specifically, the amount of the credit allowable is reduced by $50.00 for each $1,000.00 of modified adjusted gross income above a threshold amount.  That threshold amount is $110,00.00 on a joint return, $75,000.00 for single and head of household filers, and $55,000.00 for married individuals who file separate returns.  This means, for example, that a married couple filing jointly who have one qualifying child would be entitled to a credit of $950.00 if their modified adjusted gross income is more than $110,000.00, but not more than $111,000.00.  They lose the credit completely if their modified adjusted gross income is more than $129,000.00.

It is important to understand how the Filing Status, Dependency Exemption and Child Tax Credit can affect your personal income tax return.  It also is important to understand how they can affect the other parent’s income tax return. Your accountant and attorney should discuss these tax benefits and how they will affect your tax returns before you file your 2007 taxes, and in the foreseeable future.  There are very specific financial benefits that could be negotiated in your divorce and support actions, in a way that positively affects both you and your spouse or former spouse.  It always feels good to find a way to pay less taxes, even if it saves your "ex" some money too.

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For the first time, the Pennsylvania Supreme Court considered whether a sperm donor has to pay child support payments for the children resulting from his donation.  The case is Ferguson v. McKiernan, and the Court ruled that no child support is due.

Ordinarily, in Pennsylvania, parents have a duty to support their children until the children become emancipated.  A parent cannot contract to give up the right to receive child support because it is not the parent’s right to give away; it is the child’s.  Any contract attempted to waive the right to child support is void.

In Ferguson, the mother and the sperm donor orally agreed that the sperm donor would give up any custody rights and that he would not owe child support for any children.  The mother later conceived twins through in vitro fertilization and sued the sperm donor for child support.

The Supreme Court found that the oral contract was valid and that this sperm donor did not have to pay child support for the twins.  The Supreme Court found that this is different from a contract between two people who conceived the children through intercourse.  The contract was also different because it was entered into before conception.

In reaching its decision, the Court recognized the growing field of reproduction assistance for mothers.  Anonymous sperm donors do not pay child support.  If a mother selects a donor that she knows and respects, the donor is more likely to participate if he knows that he will not be required to support any resulting children.  Any other decision would subject sperm donors to liability for child support which could ultimately force all mothers to use anonymous donors.

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Most child support cases in Pennsylvania are decided based upon the Pennsylvania Support Guidelines ("Guidelines") found at Pa.R.C.P. 1910.16-3.  The Guidelines are utilized for any case in which the parents’ combined net monthly income is $20,000 or less.  The amount of support dictated by the Guidelines is subject to reduction if the parties have shared (50/50) physical custody or if the payor has substantial physical custody (at least 40% of overnights).  The reduction in the child support payments for shared or substantial physical custody ranges from 10% to 20% of the payor’s proportionate share of the total support obligation. See Pa.R.C.P. 1910.16-4.

Cases in which the parties’ combined net monthly income exceeds $20,000 are decided outside the Guidelines, based upon a formula set forth in the case of Melzer v. Witsberger, 480 A.2d 991 (Pa. 1984).  In these high income cases, a presumptive minimum amount of support is established based upon the Guidelines.  However, the actual support award may be higher, based, in large party, upon children’s reasonable expenses.

Although an automatic reduction in support is made in Guidelines cases based upon shared or substantial physical custody, the same reduction does not apply in high income support cases.  The Pennsylvania Superior Court recently held that shared physical custody does not affect a Melzer calculation.  

This recent Superior Court decision highlights the expense driven nature of cases decided under Melzer. Although case law instructs courts to be flexible in considering other factors in addition to expenses, under the shared physical custody arrangement in Bulgarelli, the court declined to deviate from the standard Melzer calculation.  The parties’ and children’s expenses are the paramount focus of any Melzer analysis, not the custody schedule. 

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How much support is enough when a child theoretically has everything?

An example would be the obligation of rap star, 50 cent.  According to articles in New York and Chicago newspapers, the rapper presently pays $25,000 per month for the support of his 10 year old son.  Now that he hit the jackpot as an investor in Coke's buy-out of the parent company of Vitamin Water (to the tune of $100 million dollars), the mother of the child wants more.  Could it be possible that $25,000 per month is not enough to raise the child????

In Pennsylvania, there is a 1993 Superior Court case out of Pittsburgh which addressed certain aspects of this issue, Branch v. Jackson, 629 A.2d 170 (1993).  In that case, the father of a child born out of wedlock, who was a professional football player, argued that since the child always had resided with Mother, in a modest lifestyle, her expenses should be the determining factor, not what he could afford.

The Superior Court did not agree, and held that where a father is wealthy, and although the mother may indirectly benefit, the child was entitled to support "commensurate with his Father's income and lifestyle".

That does not answer the original question of how much is enough, but the Branch case does offer guidance for lawyers and litigants in Pennsylvania courts.

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PASCES, the collection and enforcement agency for  support in Pennsylvania, has begun requiring that an obligor's first support payment be paid at the time of the initial conference if an interim or a final order is entered.  This applies to child support, spousal support and APL cases. 

Montgomery County instituted this requirement a few months ago.  Chester County recently has done so.  I'm sure others will be following suit.  If you are an attorney representing an obligor, make sure your client does not find out about this "surprise" at the end of the conference.

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The new client walks in the door, obviously nervous about his or her case being the subject of a public trial in the county courthouse.

The first thing I tell them is that most third parties are not interested in their divorce case.

The second thing I say is that most of the cases I handle resolve without the need for substantial litigation, although there may be a hearing or two along the way.

However, most recently I have found that I am trying a few more cases than usual, and I'm winning.  I'm not saying that so that readers will think: I've got to have Charlie Meyer as my lawyer.  My real point is that, while I have written in the past on the importance of professionalism and civility in the practice of law, especially in domestic relations practice, I now am finding that lawyers are taking positions they cannot possibly defend and upon which they cannot prevail.

I am reminded of the time when, as a young lawyer, I met with an "experienced" (read "older") lawyer in his storefront office to discuss a support matter.  It obviously was a case which would be decided under the Guidelines.  But to my surprise, his position was that "he didn't use 'those' guidelines".  Needless to say, we went to court, and the guidelines were applied.

This story is illustrative of what I am finding more and more in my practice.

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Pursuant to 23 Pa.C.S.A. Section 4308.1, proceeds from a "monetary reward", such as a Personal Injury Award, are subject to a lien for child support arrears.  Parties and their attorneys have obligations under the section of the Domestic Relations Code.  Basically, documentation must be provided by the party to the attorney, and the attorney must verify the information and then satisfy the lien before distributing any funds to the client.

In lieu of relying on information from the client, the attorney may utilize an approved judgment search company or an insurer which furnishes information and transmits funds under the child support enforcement lien program operated through a central reporting agency approved by the department.  By doing so, the attorney is immune civil, criminal and/or administrative penalties.

There is much more to the statute section, but attorneys certainly should be aware of their obligations in this regard.

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Here is a factual situation which is not atypical:

Mother pays child support to Father, based upon earnings of $100,000 per year.  Mother loses her job, and takes a lower paying job earning $50,000.   Then she files a Petition to Modify her Support Order.

What are the considerations in a case like this?  A recent Superior Court Opinion, Grigoruk v. Grigoruk, 912 A.2d 311(Pa. Super. 2006), sets forth a concise review of the considerations.  The Court's discussion includes the following queries which must be resolved:

• Under Pa.R.C.P. 1910.16-2(d), a party voluntarily accepting a lower paying job is not entitled to a reduction in support.  However, if a parent is fired for cause, the court should look to the party's attempt to mitigate the lost income in deciding if a reduction in support should be allowed.
• The court should look to the factual circumstances to determine if the subsequent job search was sufficient.
• The court should look at the party's employment immediately prior to the request for modification, and not the highest paying job the parent had 4 years ago.
• A higher earning capacity may be assigned if the court finds that the reduction in income was the result of a parent's misguided choice.
• A parent may accept a lower paying job where it was the only job offered after a reasonable search.
• A parent does not necessarily have an ongoing duty to mitigate the lost income by conducting an ongoing job search.  However, this also would be a determination based upon the facts.

In this case, the Superior Court relied upon several other cases to support its position, or to distinguish its position, including:

Ewing v. Ewing, 843 A.2d 1282 (Pa. Super. 2004)

Novinger v. Smith, 880 A.2d 1255 (Pa. Super. 2005)

Woskub v. Woskub, 843 A.2d 1247 (Pa. Super. 2004)

Dennis v. Whitney, 844 A.2d 1267 (Pa. Super. 2004)

Baehr v. Baehr, 889 A.2d 1240 (Pa. Super. 2005)

Samii v. Samii, 847 A.2d 691 (Pa. Super. 2004)

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We all know that there is a dependency exemption available for children who live with us.  But in a divorce situation, who gets to take the deduction?

Pursuant to the Internal Revenue Code Section 152, if one party has primary physical custody of the child(ren), such that the child lives with that parent for more than one-half of the year, that party is entitled to claim the exemption. 

Pennsylvania Rule of Civil Procedure 1910.16-2(f) authorizes the court to award the dependency exemption to the non-custodial party as "justice and fairness require", in an effort to maximize the total available income for support.  The Rule also permits the court to decide which party gets the exemption in a situation where custody is equally shared.

However, most recently the IRS has issued Notice 2006-86, which is entitled "'Tie-braking' Rule for Two or More Taxpayers Claiming a Child as a Qualifying Child".  The Notice provides information regarding IRC Section 152(c)(4)(B), which states, in substance, that where the parents share custody equally, such that the exemption could be claimed by either party, "the taxpayer with the highest adjusted gross income for that taxable year" gets to claim the exemption. 

This new rule answers a question which used to create problems on April 15 of each year for divorced parties and their lawyers.  Now, whether you agree with it or not, there is a rule on the issue.

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Section 4308.1 of Title 23 of the Pennsylvania Consolidated Statutes went into effect in September 2006.  It refers to any settlement paid as a lump sum and negotiated in lieu of, or subsequent to, the filing of a lawsuit of any civil judgment or civil arbitration award that is paid as a third party claim for bodily injury or death under property and/or casualty insurance, or paid as a workers’ compensation or occupational disease award under a workers’ compensation policy (including Property and Casualty Compensation or Occupational Disease Act Policies), in excess of Five Thousand Dollars ($5,000). 

When such an award is made, it cannot be paid to the plaintiff until the attorney, insurer or other paying agent either uses a private judgment search company approved by the Department of Child Support Enforcement Lien Program or the prevailing party/beneficiary of the funds provides a statement and written documentation to show that no arrears from the Pennsylvania Child Support Enforcement System exists. 

In English, what this means is that if you owe support, you won't get the proceeds of your suit until your support arrears are paid.  And if you are a support recipient, if arrears exist on the account, and you find out that the person who is paying you support is going to get a settlement, you should be getting some money soon.

Obviously, this does not apply to support which is not being paid through the court.

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Think about these scenarios:

1.  Parties have an infant child and separate. Mom was not working at the time of separation, and does not want to go back to work. How is child support to be calculated?

2.  Mom has two children from a prior relationship, remarries and has a new baby. With respect to her older children, she pays child support. Can she stay home with her new infant and, if so, does she still have to pay child support?

Obviously, these two are not the only scenarios to which the issue might arise as to whether a parent can stay home to care for a young child. Under Pennsylvania Law, there is a “Nurturing Parent Doctrine”, pursuant to which the mother in these scenarios may not have to continue to pay child support. The issues are very fact specific, but focus on several factors, including, but not limited to:

• the age and maturity of the child;
• the availability and adequacy of others who might assist the custodian-parent;
• the adequacy of available financial resources if the custodian-parent does remain in the home. 
• the mother’s perception that the welfare of the child is served by having a parent at home is to be accorded significant weight in the court’s calculation of its support order.
• the prior practice of the mother, i.e. what did she do when her older children were born?

There are several appellate cases on this issue, including the following:

Commonwealth ex rel. Wasiolek v. Wasiolek, 380 A.2d 400, 403 (Pa. Super. 1977).

Bender v. Bender, 444 A.2d 124, 125-26 (Pa. Super. 1982).

Atkinson v. Atkinson, 616 A.2d 22 (Pa. Super. 1992).

Kelly v. Kelly, 633 A.2d 218 (Pa. Super. 1993).

Depp v. Holland, 636 A.2d 204 (Pa. Super. 1994).

Frankenfield v. Feeser, 672 A.2d 1347 (Pa. Super. 1996).

McClain v. McClain, 872 A.2d 856 (Pa. Super. 2005).

Obviously, a parent looking at this issue should seek the advice of competent counsel since the issue is so fact specific.  

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