by Denise French, MAFF, CVA, CRPC, CDFA
In Texas, child support is calculated based on a percentage of the paying spouse’s (obligor) net income. Texas does not take into consideration the payee spouse’s (obligee) income or the income of the obligor’s spouse. The obligor’s income includes but is not limited to all of the wages and salaries earned (including tips and overtime), self-employment income, social security or disability benefits, worker’s compensation, retirement benefits, real estate income and alimony. However, social security taxes, income taxes, union dues, and cost of health care are all deducted from the obligor’s income BEFORE calculating child support. In contrast, the truck payment, 401k contribution, mortgage and other similar types of payments are NOT calculated before considering child support. The percentage of the income is calculated from the number of children between the spouses and how many other minor or disabled children the obligor has with someone else who he or she is financially supporting.
Many believe that if they are unemployed, then they do not have to pay child support. However, we have seen child support ordered based on the current minimum wage as if the obligor was employed or from past employment income if the obligor is recently unemployed.
Child support is most often paid in one of two ways:
1. the obligor can pay the child support themselves, or
2. the child support can be withheld from the obligor’s check by their employer.
If the child support is not withheld, the obligor is responsible for sending the child support each month to either the obligee or the Texas State Disbursement Unit. In most cases, child support in Texas is ordered to be paid through the disbursement unit, which is a clearinghouse that receives the payments, credits them to the child support account, and then sends them on to the receiving party. For both parties, this process creates a record that the support was paid. In addition, if the support is not paid or not paid timely, there is a record of that for subsequent enforcement proceedings.
Many times, it is ordered through the state, but if not, we feel the state processing unit is the best way for both parties to handle the payment of support. It protects the obligor as everything is recorded as paid and there is no question on the matter. It protects the obligee as they will have regular child support payments, typically, without hassle or issue on a monthly basis.
Typically, child support is to be paid by the parent that the children don’t live with primarily (this person is called the “non-custodial parent”). Child support is usually ordered until the child reaches 18 years old or graduates high school, whichever is later. If a child is disabled, child support may go longer.
There is a standard amount of child support that usually mandated to be paid. If there are no other children that the paying parent has to pay child support for, child support is in the following percentages:
• 1 child, 20% of net income
• 2 children, 25% of net income
• 3 children, 30% of net income
• 4 children, 35% of net income
• 5 children, 40 % of net income
• 6+ children, Not less than the amount for 5 children
(If other children are born or other minor children of a different relationship are present, the support payments are smaller.) This percentage applies for net resources up to the 2013-2019 child support cap of $8,550. That means that if you make more than $8,550 per month, the maximum child-support a ordered should be:
• For one child: $1,710
• For two children: $2,137.50
• For three children: $2,565
• For four children: $2,992.50
• For five children: $3,420
• For six or more children: $3,420 or more
If you make under $8,550 per month in net resources, you calculate child support payments by taking the percentage of your monthly income that corresponds to how many children you support. For instance, supporting two children with monthly net resources of $2,000 would mean monthly child support payments should be about $500.
Texas Maximum Child Support Increased September 1, 2013 and that Cap May Increase, Decrease, or Stay Same on September 1, 2019. Once child support is in place, the state of Texas considers child support modifications only when it has been at least three years since your last order and the amount of the modification would represent at least a 20 percent or $100 monthly difference from the most recent order.
Denise French, MAFF, CVA, CRPC, CDFA is a divorced focused financial advisor, not a lawyer. Denise French does not practice law and does not offer legal advice. Please consult your family law attorney for legal counsel.