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The Shared-Time Payer and Variable Costs
September 6, 2000
Imagine having to keep track of all of your expenses for a child, including food and clothing.
Then imagine having to exchange this information with a person who is divorced from you, with the resultant mistrust and lack of effective communication.
Imagine then having to apply a percentage to each of your expenses, offsetting one against the other and reconciling the difference.
As difficult as this seems, according to a recently published Wisconsin Court of Appeals decision, Randall v. Randall, 2000 WI App 98, 235 Wis. 2d 1, 612 N.W. 2d 737, when a court applies the shared-time formula for child support, it is also required to order the parties to share the variable costs for the children in the same proportion in which they share the children.
That is, if the children split time on a 57% to 43% basis, the variable costs should be shared by the same ratio. Variable costs are defined as including, without limitation, food, clothing, day care and recreational costs.
The concept of a “shared-time” child support payer is a conflict between two points of view, both of which have merit. On the one hand, the more time a child spends with a parent,. the higher the direct costs to that parent for the child. To some extent, this should lower the costs of the other parent. For example, if one parent pays for the child’s dinner, the other parent does not have this expense.
On the other hand, by reducing child support based on the allocation of placement time, there is a financial incentive for the parties to fight for more time with the children. It is impossible to ferret out the motivation of the parties as, in many cases, there are mixed motives.
The fact that a parent wishes to pay less child support does not necessarily mean that the parent does not also want to spend as much time as possible with the children.
The conflict of time versus cost may be irreconcilable. The largest expense for a child, as it is with adults, is shelter, including mortgage or rent, repairs, property tax, utilities and insurance.
At what point does a parent need a bigger residence because the child is spending more time there? At what point is the child’s use of utilities significant? The answer is that there is no answer. The increased costs are a continuum, not an exact point.
Yet the shared-time formula kicks in at 30% of the time with the paying parent. That is, under the guidelines, a parent who sees the children 29% of the time would pay the exact same child support as a payer with the same income and number of children who did not see the children at all.
There is a further reduction when the placement schedule exceeds 40% of the time, when in addition to the placement time, the income of the primary placement parent is calculated into the equation.
Again, this raises a question: Why should a primary parent who earns substantial income, perhaps substantially more than the paying parent, receive the same child support as a primary parent who has far less income? See Luciani v. Montemurro-Luciani, 199 Wis.2d 280, 540 N.W.2d 561 (1996).
For the child support payer who not only gets more time with the children, but also a reduction in child support, there is a cloud with the silver lining. To get the shared-time reduction in child support, the payer must assume variable costs in the same proportion as the placement schedule.
Consider the implications: In exchange for the reduction in child support, the payer must be obligated to pay a proportion of costs normally shared by both parties. There is no provision for what costs are included beyond those delineated, nor is there any mechanism for determining the payments due.
Presumably, the parties should exchange records periodically, as the purchase of clothes by the payee will provide an offset for the purchase of clothes by the payer. In any event, the list of issues which could potentially cause strife is endless. Whose hamburgers were they, anyway? Mom’s, the kids, stepdad’s -or maybe the pooch?
Or, one party may be a more profligate spender than the other. Intact families find sufficient issues to fight about regarding the costs of children’s tennis shoes; imagine the potential for strife in a dysfunctional family. Where the clothes are bought, how often they need to be replaced and their quality are all issues which invite conflict. And, we haven’t even begun to talk about costs of soccer, day care providers and other expenses too numerous to mention.
Interestingly, both case law and anecdotes are bereft of contempt cases, or cases of any kind for that matter, on variable costs. Perhaps this means that parties are successfully working this issue out between them. Hard to believe, given the typical lack of communication and trust between parties to a divorce.
Perhaps it means that courts have not been ordering allocation of variable costs – a situation which may now change, thanks to the Randall decision. More likely, it means that the parties have been ignoring the requirement, which leads one to wonder whether large bills are lurking out there, waiting for the moment to initiate post-judgment collection litigation.
One answer to the variable costs dilemma is to negotiate the issue. By considering what activities the children are engaged in and allocating the costs, the parties can avoid friction and litigation in the future.
Also, the State Bar of Wisconsin Family Law Section is working with the Department of Workforce Development and the legislature on revisions to the child support guidelines.
Among the issues which they are considering are the points where the amount of time with each parent and the income of both parents should be calculated into the guidelines. Hopefully, they will also consider whether the imposition of sharing variable costs should be mandatory in all shared-time cases or whether the court should be allowed the discretion to decide in each case whether such imposition would truly be in the best interests of the children.
This article originally appeared in Wisconsin Opinions.