PHILADELPHIA BAR ASSOCIATION
RESOLUTION REGARDING RECOMMENDATION 67
WHEREAS, Pennsylvania law requires that child and spousal support must be awarded pursuant to statewide guidelines, and pursuant to federal law, statewide support guidelines must be reviewed at least once every four years; and,
WHEREAS, the Domestic Relations Procedural Rules Committee of the Supreme Court of Pennsylvania has promulgated Recommendation 67 as a result of the mandated review process and has solicited comments and suggestions from the legal community and the general public prior to the submission of its proposal to the Supreme Court of Pennsylvania; and,
WHEREAS, Recommendation 67 as currently drafted will result in significant changes to the statewide support guidelines as they are currently enacted in Pennsylvania, Pa.R.C.P. 1910.16-1 et seq. including reductions in amounts to be paid by obligors; and,
WHEREAS, the Association's Family Law Section has given serious consideration to the potential impact of Recommendation 67 on the citizens of Pennsylvania if it were implemented as currently drafted; and,
WHEREAS, the Family Law Section generally favors rule changes which improve or clarify the existing law regarding support and wishes to express its appreciation to the Domestic Relations Procedural Rules Committee for the work it has done to make such improvements or clarifications; and,
WHEREAS, in the opinion of the Association's Family Law Section, certain provisions of Recommendation 67, as currently drafted, would likely increase prolonged litigation in the areas of child support and child custody thereby diminishing the funds available to both parties to support their children; and,
WHEREAS, in the opinion of the Association's Family Law Section, certain provisions of Recommendation 67, as currently drafted, would place an increased burden on the Court system due to the increase in child support and custody filings and the increase in resulting court hearings; and,
WHEREAS, in the opinion of the Association's Family Law Section, Recommendation 67, as currently drafted, fails to provide clarification or resolution to certain issues that have arisen since the Support Guidelines were amended on April 1, 1999; and,
WHEREAS, the Association's Family Law Section opposes Recommendation 67 as currently drafted, and has prepared a list of suggested changes and comments to Recommendation 67 which are attached hereto as Exhibit "A".
NOW, THEREFORE, BE IT RESOLVED, that the Philadelphia Bar Association Board of Governors expresses opposition to Recommendation 67 as currently drafted and authorizes the Association's Family Law Section to communicate to the Domestic Relations Procedural Rules Committee of the Pennsylvania Supreme Court, on behalf of the Association, the comments in Exhibit A.
PHILADELPHIA BAR ASSOCIATION
BOARD OF GOVERNORS
ADOPTED: MAY 4, 2004
COMMENTS AND SUGGESTED CHANGES TO
1. Proposed Pa.R.C.P. 1910-16-3-Child Support Schedule. Proposed Rule 1910.16-3 represents a dramatic change in the child support schedule that has been in place since April 1999. While the proposed new schedule allows for an increase in child support in some cases, the amount of child support would decrease in most cases involving low income parents where the parties' combined net incomes are between $0 and $1,750 per month, in many cases where the parties' combined net incomes are between $3,800 and $5,100 per month, and in every case where the parties' combined net incomes are between $5100 and $15,000 net per month. At the lower income levels, the child support decreases by an average of 38% and at the middle and upper income levels it decreases by up to nearly 30%. Responsible obligees have planned their children's lives based on the child support they currently receive and if that support is dramatically reduced, their children may be deprived of the necessities as well as the comforts of living to which they are reasonably accustomed.
The 2004 Explanatory Comment following proposed Pa.R.C.P. 1910.16-1 states that the proposed child support schedule reflects "updated economic data"; however, it is difficult to comprehend how child-rearing expenses could have decreased rather than increased over the past five years, especially in middle to upper income level families. More explanation and analysis should be provided as to the reasons underlying this apparent decrease in spending for a child's basic needs, including clothing, food, housing and recreation. Has the Committee considered, for example, whether there are increases in other expenses inuring to the child's benefit or factors related to the decrease in these expenditures that should otherwise preclude a decrease in support? The Explanatory Comment states that the current support schedule and the proposed new support schedule are based on estimates prepared by David M. Betson, Ph.D. If the estimated numbers in the 1999 schedule were, in fact, inaccurate, isn't it possible or even likely that the numbers in the proposed new schedule are not reliable? Further, the formula used to generate these numbers is only one of several formulas utilized to estimate child-rearing expenditures, and there is no consensus among economists that any single formula is better than another. The proposed decreases in child support are also likely to result in increased litigation and costs to both parties concerning the level of support and related issues, including overpayment while a petition to modify is pending.
The Family Law Section believes that, for all of these reasons, without further explanation warranting the decreases in child support, the current schedule should remain in place and further investigation should be made as to the appropriate method to be used for any adjustment of the current schedule.
2. Proposed Pa.R.C.P. 1910.16-4(c)--Shared Custody Adjustment. Proposed Rule 1910.16-4(c)(1)(A) allows for the reduction in child support based on an obligor exercising his or her custody or visitation rights. The reduction is based on the number of "days" that the obligor spends with the child per year, with a monthly percentage adjustment beginning with 4 days per year. A "day" is defined as more than 12 continuous and consecutive hours or an overnight; a "half-day" is more than 4 and up to 12 continuous and consecutive hours; and "one-quarter day" is up to an including four continuous and consecutive hours.
a. Threshold percentage. The Section objects to allowing reductions of child support where the children spend less than 25% of their time during the year with the obligor. The current guidelines permit no reduction unless the children spend 40% or more of their time with the obligor and contemplate that "the obligor has regular contact, including vacation time, with his or her children, and that he or she makes direct expenditures on behalf of the children." Pa.R.C.P. 1910.16-4 (c)(1). Allowing for a reduction in child support for an obligor with partial custody for any less than 25% of the time places too much emphasis on crediting an obligor for exercising periodic partial physical custody rights and not enough emphasis on the obligee's ongoing financial obligations for the children, including clothing, food, housing, etc., which are not diminished by this limited amount of partial physical custody. As drafted, the proposed rule encourages obligors who may be satisfied with a present custody arrangement to seek additional custody time simply to take advantage of a reduction in child support. Further, since the obligor's costs with respect to the child are minimal and there is little or no corresponding diminution of the obligee's expenses for the child in a visitation arrangement, there should be no credit awarded.
b. Calculating the credit. The Section also objects to the method of calculating the credit to be given to the obligor for partial days. The proposed rules allows for incremental reductions when the child is with the obligor for four or more days per year, up to a maximum reduction of just under 50%. The Section does not object to expanding the definition of "days" so as to include extended time with a parent that may not include an overnight visit. However, this provision needs to be streamlined to decrease complicated and time-consuming calculations as well as to recognize, once again, that the obligee's expenses for the children do not diminish commensurately with the obligor's partial custody. The Section suggests that the provision be revised to omit the inclusion of partial days. Instead, the new definition of "one day" should be expanded to include 16 hours over a one-week period or an overnight. Thus, any blocks of time less than 16 hours in one week would not be considered. Blocks of time totaling 16 hours or more would equal one overnight; blocks of time totaling 32 hours or more would equal two overnights, etc.
c. Basis for adjustment. Proposed Rule 1910.16-4(c)(1)(a)(A) states that the shared custody credit would be given for time the obligor spends with the child pursuant to "court order, historical practice or agreement of the parents." However, proposed Rule 1910.16-4(c)(1)(B) also states that, "[i]f there is no custody order or agreement between the parties as to the current or future custodial schedule, the provisions of this subdivision (c) shall not apply." These Sections are inconsistent since there is no mention of "historical practice" in subsection B. The fact finder should have the discretion to make findings as to historical practice in the absence of a written agreement or court order. Moreover, if historical practice is not to be considered in the absence of an agreement or court order, there is a strong incentive for custody petitions to be filed by either parent, even when the parties have been dealing with each other amicably and without a formal agreement in place.
3. Pa.R.C.P. 1910.16-5-Deviation. The existing comments to Pa.R.C.P. 1910.16-1 state in subsection B(3) that:
The guidelines are designed to treat similarly situated parents, spouses, and children in the same manner. However, when there are unavoidable differences, deviations must be made from the guidelines. Failure to deviate from these guidelines by considering a party's actual expenditures where there are special needs and special circumstances constitutes a misapplication of the guidelines.
Additionally, current Rule 1910.16-5 sets forth the factors the fact finder should consider when determining whether to deviate from the amount of support determined by the guidelines. These factors include:
(1) unusual needs and fixed obligations;
(2) other support obligations of the parties;
(3) other income in the household;
(4) ages of the children;
(5) assets of the parties;
(6) medical expenses not covered by insurance;
(7) standard of living of the parties and their children;
(8) in a spousal support or alimony pendente lite case, the period of time during which the parties lived together from the date of marriage to the date of final separation; and
(9) other relevant and appropriate factors, including the best interests of the child or children.
However, other than stating that Pa.R.C.P. 1910.16-5 sets forth the factors for deviation from the "presumptive" amount of support, no guidance is given as to what constitutes an "unavoidable difference" justifying a deviation from the support guidelines and, if deviation is warranted, what the amount of the deviation should be. This lack of clarity and direction results in inconsistent orders and does not promote judicial economy.
4. Pa.R.C.P. 1910.16-6(d)-Other Needs. Pa.R.C.P. 1910.16-6(d) presently states that the support schedule does not take into consideration expenditures for private school tuition or other needs of a child which are not specifically addressed by the guidelines. If the court determines that one or more such needs are "reasonable", the expense is allocated between the parties in proportion to their net incomes. The obligor's share of this expense may be added to his or her basic support obligation. The Explanatory Comment (2004) explains that this rule is intended to "govern the apportionment of private school tuition, summer camp and other unusual needs not reflected in the basic guideline amounts of support." Further, "the rule presumes allocation in proportion to the parties' net incomes consistent with the treatment of the other additional expenses."
Recommendation 67 has not changed the rule or the comment. However, it is suggested that consideration be given to whether additional guidance should be given in the rule or the comment as to the "other needs" which are covered by this rule. For example, the definition might include the following:
"Other needs" shall include, but not be limited to, the child's extracurricular and/or cultural activities such as sports, music, dance, and religious training, as well as the costs associated with such activities including registration and enrollment fees, equipment, uniforms or costumes, and other expenses reasonably related to the extracurricular or cultural activity.
Further, it is suggested that the comments to the rule clarify that the expense may either be added to the obligor's basic support obligation, or paid by the obligor directly to the obligee or to the third party payee, as provided in the order. The parties may choose or the court may determine that such payments will be made directly, rather than as part of the support payment, so as to avoid the need to modify the order to reflect subsequent changes in the amounts of such expenses.
5. Pa.R.C.P. 1910.16-6(e)-Mortgage Adjustment. Pa.R.C.P. 1910.16-6(e) presently states that the guidelines presume that the spouse occupying the marital residence will be solely responsible for the mortgage payment, real estate taxes, and homeowners' insurance. Further, if the obligee is living in the marital residence and the mortgage payment exceeds 25% of the obligee's net income, including amounts of spousal support, alimony pendente lite and child support, the court may direct the obligor to assume up to 50% of the excess amount as part of the total support award.
The present rule does not provide any guidance as to when the mortgage adjustment should be made and what factors the court should consider in determining what the amount of the adjustment should be and the duration of any such adjustment. It is suggested that the Rule require consideration of financial practicality related to whether the home should be kept or sold, and should not be applied in Melzer cases. It is also suggested that the Rule provide guidance as to whether a downward adjustment should be made when there is an unusually low mortgage or rental payment or no mortgage or rental payment at all.
6. Pa.R.C.P. 1910.19 and Pa.R.C.P. 1910.20--Support Arrears and Credits. Pa.R.C.P. 1910.19 allows for modification of an existing support order based on a material and substantial change in circumstances. Pursuant to 23 Pa.C.S.A. Section 4352(e), modification is permitted retroactive to the filing date of the petition. This may result in an arrearage owed by the obligor or a credit owed to the obligor, depending on the retroactive effect of the order. The guidelines provide no guidance as to how the retroactive credit or arrears should be paid. Further, Pa.R.C.P. 1910.20(a)(a) states that upon an obligor's failure to comply with a support order, the order may be enforced by, among other things, increasing the amount of monthly support payments for payment of the overdue support at a rate "to be determined by the court." Again, no guidance is given to the court as to the parameters for payment of these arrears (with the exception of the maximum that can be withheld from the obligor's income under federal law). As a result, there is inconsistency in the treatment of requests for such payments, and they are often so low as to be ineffective in compensating the obligee for past due or delinquent support, or the obligor for support that has been overpaid.
7. Proposed Pa.R.C.P. 1910.16-3 and Proposed Pa.R.C.P. 1910.16- 2(e)(1)(B)-The Self-Support Reserve. Both the current guidelines and Recommendation 67 incorporate what currently is called a "Computed Minimum Allowance" (CAM) and what would be called a "Self-Support Reserve" (SSR) if Recommendation 67 is approved. The SSR is intended to assure that low-income obligors retain sufficient income to meet their own basic needs, as well as the incentive to continue employment. The SSR in Recommendation 67 is $748 per month, based on the 2003 federal poverty level for one person. The current CAM is $550 per month. The SSR is built into the schedule for child support at Pa.R.C.P. 1910.16-3 as well as the formula for spousal support, Pa.R.C.P. 1910.16-2(e)(1)(B). The result of the difference between the CAM and the SSR is a reduction in child support and spousal support in certain low-income cases.
When the SSR comes into play, child support is not based on a percentage of the parties' combined monthly net income, but instead is drawn directly from the schedule in Pa. R.C.P. 1910-16-3. For instance, the Pennsylvania guidelines currently in effect provide that when the obligor's monthly net income is $850, the obligor must pay $276 per month for three children regardless of the amount of the obligee's income, leaving the obligor with $574 per month to meet his or her basic needs. Recommendation 67 provides that when the obligor's monthly net income is $850, the obligor must pay $94 per month for three children, leaving the obligor with $756 per month to meet his or her basic needs.
Neither the current guidelines nor the proposed revisions address the following, and clarification is necessary:
(a) Whether a low-income obligor should be directed to pay the lesser of (1) the amount shown on the shaded SSR area of the support schedule or (2) the amount that otherwise would be ordered through ordinary application of the support schedule. For instance, if an obligor earns $1,200 per month and an obligee earns $4,000 per month, ordinary application of the guidelines set out in Recommendation 67 would require the obligor to pay $291 per month for the support of two children. However, the greater amount of $411 in child support would be required if the obligation must be calculated on the basis of the shaded SSR area of the support schedule by using the obligor's income only, and this seems contrary to the intent of the SSR to allow low-income obligors to retain sufficient income to meet their basic needs and to retain incentive to continue working.
(b) Whether a low-income obligee should also be given the benefit of a Self Support Reserve. Important policy issues are implicated in this question. The Self Support Reserve protects obligors by shielding poverty-level income; this income cannot be tapped for child support. Similar protection is not currently provided to low-income obligees. Moreover, the structure of the support schedule causes some children to live in households with income below poverty level while their non-residential parent remains above poverty level even after paying child support. Allowing a self-support reserve to obligees as well as to obligors would help increase the income of the household where the child resides to a level closer to poverty level and in some situations to an amount in excess of poverty level.