This bill has been amended

Bill S6784-2013

Relates to the income amounts to be utilized in issuing orders of child support and temporary spousal maintenance in supreme and family court

Relates to the income amounts to be utilized in issuing orders of child support and temporary spousal maintenance in supreme and family court.

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  • Mar 10, 2014: REFERRED TO SOCIAL SERVICES

Memo

BILL NUMBER:S6784

TITLE OF BILL: An act to amend the social services law and the domestic relations law, in relation to income amounts to be utilized in issuing orders of child support and temporary spousal maintenance in supreme and family court

This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Family Court Advisory and Rules Committee and the Matrimonial Practice Advisory Committee.

This measure would revise the method of calculation for the State's Child Support Standards Act and Temporary Maintenance Guidelines formulas.

In 2009, the Legislature enacted the Child Support Modernization Act (L. 2009, c. 343), which, for the first time in two decades, raised the combined parental income benchmark used to calculate child support under the Child Support Standards Act (Family Court Act § 413). Colloquially known as the child support "cap," the figure was raised from $80,000 to $130,000, with a built-in mechanism for indexing and adjusting the figure every two years depending upon changes in the Consumer Price Index. For combined parental incomes up to the benchmark amount, the Child Support Standards Act percentages must be presumptively applied, that is, 17% of combined parental income for families with one child, 25% of combined income for families with two children, 29% for three children, 31% for four children and not less than 35% of income for five or more children. For amounts in excess of the benchmark, which has been adjusted as of January 31, 2014 to $141,000, the Supreme or Family Court is required to consider the ten factors enumerated in section 413 (1)(f) of the Family Court Act and section 240(1b)(f) of the Domestic Relations Law and determine whether application of the CSSA percentages to income in excess of that threshold would be "unjust or inappropriate." The court may adjust its determination based upon the ten factors or continue to apply the CSSA percentages or may apply a combination of both approaches. See Family Court Act § 413(1)(c)(3); D.R.L. § 240(1-b)(c)(3). As the State Office of Temporary and Disability Assistance stated in its Memorandum in Support of chapter 343.

This provision will serve to increase the consistency of support orders throughout the State by updating the combined parental income amount utilized by the court in calculating support obligations to reflect current economic realities, thereby leaving only exceptional income cases to potentially be determined outside the presumptively correct CSSA percentages.

Clearly, salutary experience under the 2009 CSSA statute has furthered this goal. However, an anomaly in the language describing the means by which the combined parental income benchmark is calculated has led to unforeseen results that may be disproportionate to the actual rate of inflation. A similar anomaly exists in the Temporary Maintenance Guidelines statute adopted by the Legislature in 2010 as a new subdivision (5-a) to part B of section 236 of the Domestic Relations Law, setting forth a mathematical formula and factors for determining a temporary maintenance award. The court must award the presumptive

guideline amount unless it finds it to be "unjust or inappropriate." In the latter case, the court may adjust the amount upon consideration of 17 factors.

The statute set an initial "income cap" of $500,000 (which has been adjusted as of January 31, 2014 to $543,000). The statute provided that the cap was to be adjusted every two years thereafter, starting on January 31, 2012, based upon the Consumer Price Index. Where the payor's income does not exceed the income cap, the guideline amount for temporary maintenance would be the lesser of 30% of the payor's income, minus 20% of the payee's income; or 40% of the SUM of the payor's income and the payee's income, MINUS the payee's income. Where the payor's income exceeds the income cap, the temporary maintenance award guideline is the sum of (1) the amount calculated as set forth in the formula above, setting the payor's income at the income cap; and (2) such additional amount as the court may order following consideration of 19 enumerated factors. The guidelines also include protections for low income individuals.

In defining the income cap, the Legislature adopted the very same language for an increase in the income cap on January 31st of 2012 and every other January 31st thereafter as is contained in the CSSA. The purpose was identical, namely, to make sure that the income cap kept up with economic realities.

Section 111-I of the Social Services Law provides that the combined parental income amount in the CSSA must be adjusted every two years by "the product of the average annual percentage changes in the consumer price index for all urban consumers (CPI-U) as published by the United States Department of Labor Bureau of Labor Statistics for the prior two-year period rounded to the nearest one thousand dollars." Similarly, subdivision (5-a) of part B of section 236 of the Domestic Relations Law provides that the income cap in the Temporary Maintenance Guidelines must be adjusted every two years by "the product of the average annual percentage changes in the consumer price index for all urban consumers (CPI-U) as published by the United States Department of Labor Bureau of Labor Statistics for the two-year period rounded to the nearest one thousand dollars." As is the case for calculation of the biennial "Cost of Living Adjustment," it would be more appropriate in both the CSSA and Temporary Maintenance Guidelines formulas, to utilize the "sum," rather than the "product" of the average annual percentage changes in the CPI-U. See Family Court Act § 413-a(2)(a); D.R.L. § 240-c(2)(a).

Use of the term "product" was most likely intended to refer to the product of the combined parental income "cap" multiplied by the combined total of the changes in the CPI-U during the preceding two-year period, that is the total level of inflation during the applicable period. However, read literally, the current language might be read to require the change in the first year to be multiplied by the change in the second year. Changes in the CPI-U have been modest for the past few years - in the 1.5 - 2.1% range - thus not causing a major disparity in the amount of the "cap." But if the CPI-U increases at a rate of 3.5% or higher in future years, significant disparities would emerge. An example for each formula will suffice.

CSSA Cap: Assuming that the annual rate of change in the CPI-U over a two-year period is 3.5%, then using the product of the changes (as under the current statute), 3.5% times 3.5%, yields 12.25%. 12.25% of $141,000, the 2014 "CSSA cap," is $17,272, which, rounded to the nearest $1,000, is $17,000. The "cap" would thus be $158,000 ($141,000 plus $17,000). In contrast, using the sum of the changes, as proposed in this measure, 3.5% plus 3.5%, yields a 7% change; 7% of $141,000 is $9,870, or $10,000 when rounded to the nearest $1,000. The new "cap" would thus be $151,000 - a significant $7,000 difference between the two methods of calculation.

Temporary Maintenance Cap: Assuming that the annual rate of change in the CPI-U over a two-year period is 3.5%, then using the product of the changes (as under the current statute), 3.5% times 3.5% yields 12.25%. 12.25% of $543,000, the 2014 "cap," is $66,518, which rounded to the nearest $1,000 is $67,000. The "cap" would thus be $610,000 ($543,000 plus $67,000). In contrast, using the sum of the changes, as proposed in this measure, 3.5% plus 3.5% yields a 7% change; 7% of $543,000 is $38,010, or $38,000 when rounded to the nearest $1,000. The hew "cap" would thus be $581,000 - a significant $29,000 difference between the two methods of calculation.

This measure proposes use of the same terminology as in the COLA calculation - that is, the sum of the average annual percentage changes in the CPI-U for each of the two years multiplied by the existing combined parental income "cap" and then rounded to the nearest $1,000. This methodology will yield results reflecting the total amount of inflation for each two-year period and will thus be proportional to the inflation rate. In this way, the calculation of child support in cases where the combined parental income exceeds the "cap" and calculation of Temporary Maintenance where the payor's annual income exceeds the "cap" will more fairly and accurately fulfill the legislative intent of the Child Support Standards Act and the Temporary Maintenance Guidelines. In the case, of the Child Support Standards Act, that is, to establish "a method for determining an adequate level of support in actions involving children." (Governor's Program Bill Memo, L. 1989, c. 567, p. 1). In the case of the Temporary Maintenance Guidelines, that is "to provide consistency and predictability for temporary maintenance awards similar to the child support guidelines in the Child Support Standards Act." (Bill Memo to 2010 Assembly Bill 10984-B)

This measure, which would have no fiscal impact upon the State, would take effect 90 days after it shall have become a law.

Legislative History:

None. New proposal.


Text

STATE OF NEW YORK ________________________________________________________________________ 6784 IN SENATE March 10, 2014 ___________
Introduced by Sen. AVELLA -- (at request of the Office of Court Adminis- tration) -- read twice and ordered printed, and when printed to be committed to the Committee on Social Services AN ACT to amend the social services law and the domestic relations law, in relation to income amounts to be utilized in issuing orders of child support and temporary spousal maintenance in supreme and family court THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph (b) of subdivision 2 of section 111-i of the social services law, as amended by chapter 343 of the laws of 2009, is amended to read as follows: (b) The combined parental income amount to be reported in the child support standards chart and utilized in calculating orders of child support in accordance with subparagraph two of paragraph (c) of subdivi- sion one of section four hundred thirteen of the family court act and subparagraph two of paragraph (c) of subdivision one-b of section two hundred forty of the domestic relations law AS OF JANUARY THIRTY-FIRST, TWO THOUSAND FOURTEEN shall be one hundred [thirty] FORTY-ONE thousand dollars; provided, however, beginning January thirty-first, two thousand [twelve] SIXTEEN and every two years thereafter, the combined parental income amount shall increase by the [product] SUM of the average annual percentage changes in the consumer price index for all urban consumers (CPI-U) as published by the United States department of labor bureau of labor statistics for the PRIOR two [year period] YEARS MULTIPLIED BY THE CURRENT COMBINED PARENTAL INCOME AMOUNT AND THEN rounded to the nearest one thousand dollars. S 2. Subparagraph 5 of paragraph b of subdivision 5-a of part B of section 236 of the domestic relations law, as added by chapter 371 of the laws of 2010, is amended to read as follows: (5) "Income cap" shall mean up to and including five hundred FORTY-THREE thousand dollars of the payor's annual income AS OF JANUARY THIRTY-FIRST, TWO THOUSAND FOURTEEN; provided, however, beginning Janu- ary thirty-first, two thousand [twelve] SIXTEEN and every two years
thereafter, the payor's annual income amount shall increase by the [product] SUM of the average annual percentage changes in the consumer price index for all urban consumers (CPI-U) as published by the United States department of labor bureau of labor statistics for the PRIOR two [year period] YEARS MULTIPLIED BY THE CURRENT PAYOR'S ANNUAL INCOME AMOUNT AND THEN rounded to the nearest one thousand dollars. The office of court administration shall determine and publish the income cap. S 3. This act shall take effect on the ninetieth day after it shall have become a law.

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