| HOME | SEARCH | ABOUT US | CONTACT US | HELP | ||
 |
 |
|
|
| Montana Administrative Register Notice 37-568 | No. 21 11/10/2011 | |
|
||
| Prev | Next | ||
|
BEFORE THE DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES OF THE STATE OF MONTANA
TO: All Concerned Persons 1. On November 30, 2011, at 1:30 p.m., the Department of Public Health and Human Services will hold a public hearing in Room 207, 111 North Sanders, Helena, Montana, to consider the proposed adoption, amendment, and repeal of the above-stated rules. 3. The rules as proposed to be adopted provide as follows: RULE I DETERMINATION OF INCOME FOR CHILD SUPPORT (1) Income for child support includes actual income, imputed income as set forth in ARM 37.62.106, or any combination thereof which fairly reflects a parent's resources available for child support. Income can never be less than zero. (a) Parents are presumed to be capable of earning income from full-time employment; full-time employment is presumed to be 40 hours per week but may be more or less depending upon the parent's profession and/or the employer's policies. (b) In the absence or near absence of actual income, the value of a parent's assets may be considered for child support. (2) Actual income includes: (a) economic benefit from whatever source derived, except as excluded in (3) of this rule, and includes but is not limited to income from salaries, wages, tips, commissions, bonuses, earnings, profits, dividends, severance pay, pensions, periodic distributions from retirement plans, draws or advances against earnings, interest, trust income, annuities, royalties, alimony or spousal maintenance, social security benefits, veteran's benefits, workers' compensation benefits, unemployment benefits, disability payments, earned income credit and all other government payments and benefits. Income also includes capital gains net of capital losses. To the extent the net gains result from recurring transactions, they may be averaged over a period of at least three years. If the net gains are attributable to a single event or year, they may be used to represent income over one or more years; (b) gross receipts minus reasonable and necessary expenses required for the production of income for those parents who receive income or benefits as the result of an ownership interest in a business or who are self-employed. Specifically: (i) straight line depreciation for vehicles, machinery, and other tangible assets may be deducted from income if the asset is required for the production of income. The party requesting such depreciation shall provide sufficient information to calculate the value and expected life of the asset. Internal Revenue Service rules apply to determine expected life of assets; (ii) if expenses are not required for the production of income, the expenses are not allowable deductions; if business expenses include a personal component, such as personal use of business vehicles, only the business component is deductible; (iii) a net loss in the operation of a business or farm may not offset other income. If a parent has more than one business and the businesses are related, however, the total losses of the businesses may be offset against (deducted from) the total profits. An artist, for example, whose principal income source is the sale of paintings in her gallery may also own a company that publishes calendars and other commercial uses of her paintings as a marketing tool. A loss in the operation of the publishing company may be offset against the profit in the gallery business because the two enterprises are related; and (iv) investment losses outside the normal course of business may not reduce other income. (c) the value of noncash benefits, including but not limited to in-kind compensation, personal use of vehicle, housing, payment of personal expenses, food, utilities, etc.; (d) grants, scholarships, third-party contributions, and earned income received by parents engaged in a plan of economic self-improvement, including students. Financial subsidies or other payment intended to subsidize the parent's living expenses and not required to be repaid at some later date must be included in income for child support; and (e) allowances for expenses, flat rate payments or per diem received, except as offset by actual expenses. Actual expenses may be considered only to the extent a party can produce receipts or other acceptable documentation. Reimbursement of actual employment expenses may not be considered income for purposes of these rules. (3) Income for child support does not include: (a) income attributable to subsequent spouses, domestic associates, and other persons who are part of the parent's household; (b) means-tested veteran's benefits; (c) means-tested public assistance benefits including but not limited to cash assistance programs funded under the federal temporary assistance to needy families (TANF) block grant; (d) supplemental security income (SSI); (e) supplemental nutrition assistance program (SNAP) benefits, formerly known as food stamps; (f) child support payments received from other sources; and (g) adoption subsidies paid by state or federal agencies, unless expenses of the subsidized child are included in the calculation. (4) Income for child support does not include lump sum social security payments or social security benefits received by a child or on behalf of a child as the result of a parent's disability or the child's disability, whether or not the child is a child of the calculation. See ARM 37.62.144 for more information on Social Security benefits. (5) If overtime is mandatory and the worker has no control over whether or not overtime is worked, the overtime earnings are included in income for child support. In the case of voluntary overtime earnings or earnings from a job that is in addition to a full-time job, and the earnings are expected to continue for the foreseeable future, the earnings are presumed to be available for child support and are included in the calculation subject to rebuttal of the presumption. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA RULE II PARENTING DAYS (1) The parenting plan, referenced in 40-4-234, MCA, provides for the child's residential schedule with the parents. (2) When the child resides primarily with one parent and does not spend more than 110 days per year with the other parent, there is no adjustment to the transfer payment due. When at least one child spends more than 110 days per year with both parents, however, or when at least one child resides primarily with each parent, the transfer payment is adjusted according to ARM 37.62.134. (3) A "day" is defined as the majority of a 24-hour calendar period in which the child is with or under the control of a parent. This assumes there is a correlation between time spent and resources expended for the care of the child. For purposes of this chapter, and unless otherwise agreed, the calendar period begins at midnight of the first day and ends at midnight of the second day. When the child is in the temporary care of a third party, such as in school or a day care facility, the parent who is the primary contact for the third party is the parent who has control of the child for the period of third-party care. If both parents are primary contacts for a third party, or if the parents are otherwise unable to agree on the total number of days for each parent, the number of disputed days may be totaled and divided equally between the parents. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 4. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined. 37.62.102 REBUTTABLE PRESUMPTION (1) remains the same. (2) At the request of one of the parties and upon consideration of the factors set out in the guidelines and in 40-4-204, 40-4-208, and 40-6-116, MCA, the final outcome of the guidelines calculation, or "bottom line", may be rebutted and a variance from the guidelines final amount may be granted. Any consideration of a variance from the guidelines must take into account the best interests of the child. (3) The support order may vary from the (4) Findings that rebut and vary the (5) Child support may vary from the (a) it is in writing, executed by the parties free of coercion
(d) it has been approved by the court or in an administrative proceeding. (6) A support order granting a variance from the bottom line, based upon the existence of a condition or the performance of an act, must provide that, upon termination of the circumstances which justify the variance, the support immediately reverts to the amount which would have been ordered under the guidelines without the variance. (7) In contrast to the bottom-line presumption, the child support guidelines include a variety of presumptions affecting particular entries or lines in the calculation intended to customize support for a particular family. "Line-item" presumption refers to various provisions of the child support guidelines assuming specific fact patterns which occur in a majority of cases. If, in the case at issue, a parent can show that the facts in evidence are not consistent with the facts assumed, the facts in evidence are applied to the entry and result in a different but appropriate child support award. The entry based on the evidence rebuts the line-item presumption regarding the guideline provision. For example, ARM 37.62.110(1)(b)(ii) may allow a deduction from a parent's income for "an amount equal to one-half of the primary child support allowance as found in ARM 37.62.121 for the number of other children for whom no support order exists". The rule presumes the remaining half of the child's support is the responsibility of the other parent of the child, but if, in the case at issue, there is no other parent to share responsibility, the party ordinarily entitled to the one-half deduction is allowed the full deduction. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.103 DEFINITIONS For purposes of this chapter, unless the context requires otherwise, the following definitions apply: (1) "Actual income" is defined in (2) and (3) remain the same. (4) "Federal poverty (5) through (10) remain the same.
(12) through (14) remain the same but are renumbered (11) through (13).
(15) "Underemployed" means employed less than full time, when full-time work is available in the community or the local trade area, and/or earning a wage that is less than the parent has earned in the past, or is qualified to earn, when higher paying jobs are available in the community or the local trade area, for which the parent is qualified. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.106
(1) "Imputed income" means income not actually earned by a parent, but which is attributed to the parent based on the provisions of this rule. It is presumed that all parents are capable of working at least 40 hours per week at minimum wage, absent evidence to the contrary. (2) It is appropriate to impute income to a parent, subject to the provisions of (6) of this rule, when the parent: (a) is unemployed; (b) is underemployed; (c) fails to produce sufficient proof of income; (d) has an unknown employment status; or (e) is a student. (3) In all cases where imputed income is appropriate, the amount is based on the following: (a) the parent's recent work history; (b) the parent's occupational and professional qualifications; and (c) existing job opportunities and associated earning levels in the community or the local trade area. (4) Imputed income may be in addition to actual income and may not necessarily reflect the same rate of pay as the actual income. (5) Income is imputed according to a parent's status as a full- or part-time student, whose education or retraining will result, within a reasonable time, in an economic benefit to the child for whom the support obligation is determined, unless actual income is greater. If the student is: (a) full-time, the parent's earning capacity is based on full-time employment for 13 weeks and approximately half of full-time employment for the remaining 39 weeks of a 12-month period; or (b) part-time, the parent's earning capacity is based on full-time employment for a 12-month period.
(a) the reasonable and unreimbursed costs of child care for dependents in the parent's household would offset in whole or in substantial part, that parent's imputed income; (b) through (e) remain the same. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.108 INCOME VERIFICATION/DETERMINING ANNUAL INCOME (1) remains the same. (2) Income of the parents must be documented. This may include pay stubs, employer statements, income tax returns, and profit and loss statements. If expenses are disputed, proof may be required. (3) To the extent possible, income for child support and expenses should be annualized to avoid the possibility of skewed application of the guidelines based on temporary or seasonal conditions. Income and expenses may be annualized using one of the two following methods: (a) seasonal employment or fluctuating income may be averaged over a period sufficient to accurately reflect the parent's earning ability (b) remains the same. (4) Nothing in this rule shall be construed to require the use of any particular method of determining annual income if it does not accurately reflect a parent's income available for child support. (4) remains the same but is renumbered (5). AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.110 ALLOWABLE DEDUCTIONS FROM PARENTS' INCOME (1) Allowable deductions from income include (a) the amount of alimony or spousal maintenance which a parent is required to pay under a court or administrative order
(b) for an "other child" as defined in ARM 37.62.103(9): (i) the amount of child support due under existing court or administrative support orders; and
(A) reside with the parent of the calculation; or (B) do not reside with a parent of the calculation if a showing of ongoing support is made;
(c) remains the same. (d) the actual income tax liability based on tax returns. If no other information is available, use the federal and state income tax tables which show the amount of withholding for a single person with one exemption; (e) remains the same. (f) court ordered payments except as excluded under ARM 37.62.111; (f) and (g) remain the same but are renumbered (g) and (h).
(i) one-half the amount of a parent's unreimbursed payments for an "other child" for extraordinary medical expenses and child care expenses necessary to allow the parent to work, less federal tax credits;
(k) cost of tuition, books, and mandatory student fees for a parent who is a (l) the current, annual interest on student loans, paid by a parent of the calculation for post-secondary education that has resulted in an economic benefit for the children of the calculation. (2) remains the same. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.111 NONALLOWABLE DEDUCTIONS FROM INCOME (1) Deductions which are not allowable under these rules include: (a) remains the same. (b)
(d) through (g) remain the same but are renumbered (c ) through (f). AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.114 PERSONAL ALLOWANCE (1) Personal allowance is an amount which reflects 1.3 multiplied by the federal poverty (2) AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.123 SUPPLEMENTS TO PRIMARY CHILD SUPPORT ALLOWANCE (1) The primary child support allowance is supplemented by: (a) remains the same. (b) cost (c) unreimbursed health care expenses for each child of the calculation that exceed $250 per year and are recurring and predictable; and
(2) and (3) remain the same. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.126 MINIMUM SUPPORT OBLIGATION (1) A specific minimum contribution toward child support should be ordered in all cases when the parent's income, after deductions, is less than or equal to (a) For parents whose income, as defined in [New Rule I] and ARM 37.62.106, after deductions, as defined in ARM 37.62.110, is less than or equal to (i) through (iv) remain the same. (b) For parents whose income after deductions exceeds the personal allowance, the parent's minimum contribution is
(2) remains the same. (3) The table for determining the minimum support obligation of a parent whose income after deductions is
AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.134 TOTAL (a) the parent's share of the primary child support allowance, with supplemental needs, if any, plus the parent's standard of living adjustment; or (b) the parent's minimum support obligation determined under ARM 37.62.126. (2) (a) If all the children of the calculation reside primarily with one parent and do not spend more than 110 days per year with the other parent, the annual transfer payment, defined as the net amount of child support one parent owes the other, is the same as the total, annual support amount owed by the nonresidential parent. (i) To set the amount of each child's monthly transfer payment, divide the annual transfer payment by the number of children in the calculation. Then, divide each child's annual payment by 12 and round the result according to ARM 37.62.134(2)(a)(ii), following. (ii) The monthly transfer payment per child is rounded to whole dollars as follows: round down to the next whole dollar amounts ending in $0.49 or less and round up for amounts ending in $0.50 or more. The total of the rounded per child amount is the total monthly transfer payment owed by one parent to the other and/or to a third party, and due to rounding, may vary from the monthly transfer payment shown in the calculation. (b) If any child of the calculation spends in excess of 110 days per year with both parents or if one or more children reside primarily with one parent while one or more children reside primarily with the other parent, the allocation of each parent's total support amount is determined as follows: (i) recalculate the needs of each child separately; (ii) recombine each parent's total support amount for each child based upon that child's proportionate need; (iii) allocate the parent's total support amount for each child by retaining the amount for time the child spends with the parent and owing to the other parent the amount for time the child spends with the other parent; (iv) offset the amounts each parent owes the other by subtracting the lower obligation from the higher for each of the children. The remaining balance for each child is the annual transfer payment for that child and is entered in the column of the parent owing the balance; and (v) to set the monthly transfer payment, divide the annual transfer payment for each child by 12 and round according to (2)(a)(ii). (A) where the calculation includes only one child, the monthly transfer payment is the total amount due from one parent to the other; or (B) where the calculation includes two or more children, the monthly transfer payment for each child is the amount entered for the child at (2)(b)(v). The monthly transfer payment for each child is entered in the column of the parent owing the payment. Each parent's column is totaled and the difference between mother's total and father's total is the final monthly transfer payment owed by the parent with the higher total. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.140 ANTICIPATED CHANGES (1) To the extent possible, child support orders must address children's changing needs as they grow and mature in a way that minimizes the need for future modifications. (2) remains the same. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.148 SUPPORT GUIDELINES TABLES/FORMS (1) The Child Support Enforcement Division (CSED) has developed a child support (2) Included for use with the worksheet are a financial affidavit, necessary tables, and information for completion of the guidelines calculation. To assure that these tables are current, the Child Support Enforcement Division will republish the (3) The child support guidelines worksheets, or a replica of those forms with a similar format and containing the same information, must be used in all child support AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.2121 ADDITIONAL HEARING PROCEDURES (1) To the extent they are not inconsistent with the provisions of this subchapter, the overall hearing procedures set forth in subchapter AUTH: 40-5-202, MCA IMP: 40-5-273, MCA 5. The department proposes to repeal the following rules: 37.62.136 TRANSFER PAYMENT, is found on page 37-13522 of the Administrative Rules of Montana. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.138 PAYMENT OF MONTHLY SUPPORT AMOUNT IN COMBINATION PARENTING ARRANGEMENTS, is found on page 37-13522 of the Administrative Rules of Montana. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 37.62.146 MODIFICATION OF CHILD SUPPORT ORDERS, is found on page 37-13533 of the Administrative Rules of Montana. AUTH: 40-5-203, MCA IMP: 40-5-209, MCA 6. STATEMENT OF REASONABLE NECESSITY The Department of Public Health and Human Services (DPHHS, the department), Child Support Enforcement Division (CSED) is proposing the adoption of New Rules I and II, the amendment of ARM 37.62.102, 37.62.103, 37.62.106, 37.62.108, 37.62.110, 37.62.111, 37.62.114, 37.62.123, 37.62.126, 37.62.134, 37.62.140, 37.62.148, 37.62.2121, and the repeal of ARM 37.62.136, 37.62.138, and 37.62.146 pertaining to Montana child support guidelines. The proposed changes are necessary to make the Montana child support guidelines easier to read, easier to use, and more equitable for parents. The department's experience shows that certain rules can be rewritten or reorganized to improve reader comprehension and to promote ease of use. New Rule I CSED proposes to create New Rule I from the first five subsections of ARM 37.62.106, leaving the remaining four subsections of ARM 37.62.106 renumbered to address the sole issue of imputed income. Currently, ARM 37.62.106 addresses income determination for child support calculations, which is one of the most time-consuming tasks in calculating child support. Experience has revealed that the length of the current rule and the breadth of matters relating to different types of income addressed in it make it difficult to locate specific provisions. Although required formatting makes it appear that New Rule I is entirely new language, in fact, most text is identical to the first five subsections of current ARM 37.62.106, with the following exceptions: New Rule I(1)(a) is a statement of parental responsibility, presuming parents to be capable of working a full 40-hour work week, subject to the specific profession and employment policies. While not representing a new idea with respect to the child support guidelines, CSED includes this statement to inform parents directly that less than full-time employment is insufficient to satisfy a parent's obligation to support his or her children. New Rule I(1)(b) is added to provide for the possibility that the value of a parent's assets may have to be considered to support the child if the parent has little or no income to pay for child support. The need for this provision has been shown to CSED by parents whose assets are indicative of wealth yet who have no countable income for support. CSED, through the child support guidelines, supports the public policy that children should be supported by their parents and not by taxpayers, whether by the parent's income, or, if necessary, through assets the parent has acquired. New Rule I(2)(a) is proposed to replace (2)(a) in ARM 37.62.106, which treats capital gains in excess of capital losses as income for child support if there is a history of such net capital gains. CSED is concerned the current language could have the unintended result of uneven treatment. A parent, for example, may be allowed to exclude from income a sizable capital gain because he has no history of gains or losses in the years before and after. A second parent, with the same sizable capital gain, is required to include it in income because he has a small gain in the year before or after the large gain which constitutes a history. For these reasons, CSED proposes to replace the current capital gains provision with one treating capital gains net of capital losses as income for child support in every case. To the extent net capital gains result from recurring transactions, CSED would average them over a period of at least three years; a treatment consistent with that for a parent's other income that varies in amount from year to year. If net capital gains are attributable to a single event or year, CSED proposes allowing them to be spread over one or more years so that the calculations reflect how the gains are actually received as well as how the parent can best meet his/her child support obligation. New Rule I(2) proposes dividing current ARM 37.62.106(2)(b), which consists of a single paragraph regarding business expenses for self-employed parents, into two subparagraphs addressing depreciation expenses [New Rule I(2)(b)(i)], and personal versus business expenses [New Rule I(2)(b)(ii)]. CSED also proposes to include two additional subparagraphs in New Rule 1(2)(b) addressing the treatment of business losses in the child support calculation [New Rule I(2)(b)(iii)], and the treatment of business investments in the child support calculation [New Rule I(2)(b)(iv)], and clarifying how child support calculations are affected when parents have both gains and losses. Current ARM 37.62.111(1)(b) and (c) which provide that losses are not a deduction from income, caused confusion as to how such losses were treated in child support calculations. These additions will answer questions that arise when parents have both gains and losses as a result of their business interests. New Rule I(3) is proposed to set forth in one clearly organized list the types of income that are excluded from a child support calculation, including income attributable to subsequent spouses, domestic associates, and other persons who are not part of a parent's household. It also identifies the former Food Stamp Program by its current name of Supplemental Nutrition Assistance Program (SNAP). New Rule I(4) identifies clearly the two most common types of social security payments or benefits which children receive or which parents receive on behalf of children which regularly arise in child support calculations. These can be payments or benefits received as a result of a parent's disability and payments or benefits received as a result of the child's own disability. Neither is included as income in calculating child support. Pursuant to ARM 37.62.144, when benefits are received for a child based on a parent's disability, the parent on whose earning record the benefits are based receives credit toward his support obligation for the payments made to the child. New Rule I(5) addresses current earnings from overtime or a second job when establishing or modifying a child support order. CSED proposes changes to clarify when it is appropriate to use income from overtime and second jobs in the calculation of support. With the proposed repeal of ARM 37.62.146, all of a parent's children, prior and/or subsequent, will be included in the determination of income available for child support in actions to establish or to modify a support order. Due to the inclusion of all children in every calculation of support, CSED believes the current ARM 37.62.106(5) is no longer appropriate. If the calculation includes all the parent's children, CSED believes the calculation must include all the parent's income, subject to rebuttal of the presumption. The provision at New Rule I(5) distinguishes mandatory overtime earnings from earnings due to voluntary overtime or a job in addition to a full-time job while at the same time it provides that all overtime and additional job earnings are presumed to be available for child support. Mandatory overtime is a condition of employment which usually requires its inclusion in the child support calculations. Earnings from voluntary overtime or an additional job are also presumed income for child support but due to their voluntary nature the presumption is more likely to be rebutted because the work may not always be available to the parent, because it is undertaken for a specific purpose or time period, or because it will not necessarily continue for the foreseeable future. New Rule II CSED proposes to place the provision for calculating parents' time with their children as delineated in the parenting plan in New Rule II(1) because the role of parenting days is integral to the calculation of child support and the user will be better served by the proposed reorganization of provisions under a rule named, "Parenting Days". Consequently, the rule previously addressing these matters, ARM 37.62.138, is proposed for repeal as part of this rulemaking. CSED proposes setting forth in New Rule II(2) a description of the effect of the number of days the children spend with each parent on allocating the calculated child support between the parents. The user is also directed to ARM 37.62.134 for details of the adjustment based on days. In New Rule II(3), CSED proposes a more exact definition of the word "day" for calculating the number of days the children spend with each parent. CSED has decided that a better definition for "day" is needed because the term substantially affects the allocation of each parent's child support obligation and the previous definition was frequently misunderstood. The proposed definition also responds to the Montana Supreme Court case of In re Marriage of Kummer & Heinert, 2002 MT 168, 310 MT 470, 51 P3rd 513, in which the Court requested a more helpful definition of a "day" for determining parenting time. The Court found the lack of a better definition of "day" made it difficult to allocate parenting time for periods when children were in the care of third parties, such as schools or day care centers. The proposed definition of "day" therefore includes not only time when a parent has actual physical control of the child, but also time children spend with third-party caretakers, day care providers, teachers, and administrators. When a child is taken ill or is injured at school, a parent is expected to pick up the child, obtain medical care, or take him home, and stay with him. That parent, on call for the third party, should be credited with the care of the child for that period of time. An important proposed addition to the parenting days provision is the phrase "and unless otherwise agreed" immediately preceding the proposed calendar period. This provision will allow the parents to agree to a calendar period that begins and ends at a time other than midnight. CSED is hopeful this proposal will provide an incentive for parents to negotiate this matter, customizing the calculation in a way that promotes fairness and ownership of the resulting child support obligation. The current definition of a day does not allow any credit for a parent with less than the majority of a 24-hour day spent caring for a child. CSED has considered the possibility of counting the number of overnights spent with the noncustodial parent but is aware that method also has its drawbacks. CSED believes the proposal to allow parents to agree on the hour chosen for the beginning and end of the "day" will likely provide a more realistic count of days to noncustodial parents in cases where the previous definition of a day did not. In most cases, the more time the child spends with a parent, the more money the parent will spend on the child so that, in general, the parent with the majority of time is the parent with the majority of the expense.
ARM 37.62.102 This rule sets forth the manner in which child support calculations are subject to the "rebuttable presumption", or legal assumption that if child support is calculated according to the child support guidelines, the resulting obligation is correct unless it is rebutted by a parent's evidence to the contrary. CSED proposes changing this rule to distinguish between two presumptions present in the guidelines, the "bottom-line presumption" and the "line-item presumption". ARM 37.62.102(2) through (6) include new language identifying the "bottom-line presumption" as the subject of those provisions while ARM 37.62.102(7) is entirely new and explains the "line-item presumption". The "bottom-line presumption" at ARM 37.62.102(2) through (6) applies when child support is calculated according to the guidelines and there is no showing that any specific fact in the child support calculation was incorrect. The calculation is presumed to be correct unless the parent can rebut it by showing the "bottom line" child support obligation is itself unjust or inappropriate based on the evidence. The "line-item presumption" is the lesser known of the two presumptions. It refers to individual entries in the child support calculation which presume a specific fact pattern. If child support is calculated according to that fact pattern, the resulting calculation is presumed to be correct. A parent, however, can rebut that presumption with evidence showing some specific fact was incorrect as applied in the calculation, that this resulted in an incorrect child support obligation, and that using the true fact results in a different and correct child support obligation. The changes to ARM 37.62.102(2) are intended to make clear that where the rule previously referred simply to the "guidelines", it now refers to the "final outcome of the guidelines calculation", or "bottom line". This distinction, which is continued in the amendments of ARM 37.62.102(3) through (6) paves the way for the contrasting "line-item presumption" explained in new paragraph (7).
ARM 37.62.103
CSED proposes to amend ARM 37.62.103(1) to include the new reference which will be assigned to the income rule currently labeled New Rule I in this document. CSED proposes changing references in ARM 37.62.103(4) from "federal poverty index" to "federal poverty guidelines" to reflect current terminology used by the federal government. ARM 37.62.103(4) also notes that the U.S. Department of Health and Human Services periodically updates the poverty guideline figures and that the updated figures will be adopted as appropriate by amendment to these rules. CSED proposes deleting the definition in current ARM 37.62.103(11) of "preexisting support order" because that term is no longer used to describe a support order entered prior to the current calculation. CSED proposes deleting the definition in current ARM 37.62.103(15) of "subsequent child" together with the reference therein to ARM 37.62.146 because the department is proposing to repeal ARM 37.62.146 as part of this rulemaking. CSED proposes to include a new definition for "underemployed" in ARM 37.62.103(15) because the term "underemployed" is used in connection with imputed income when referring to a parent who is employed but at a lower rate of pay or for fewer hours per week than is available.
ARM 37.62.106
CSED proposes creating a new rule from the first five subsections of the current ARM 37.62.106, described as New Rule I, and renumbering the remaining four subsections of current ARM 37.62.106(6) through (9), reorganized as ARM 37.62.106(1) through (6), to address the sole issue of imputed income. CSED proposes to include in ARM 37.62.106(1) with the definition of imputed income a presumption that parents are capable of working at least 40 hours per week at a minimum wage, absent evidence to the contrary. Similar to the presumption that parents are capable of earning income from full-time employment, these statements of principle are intended to make parents aware of what is expected of them by the child support guidelines. While not a new idea, the guidelines previously did not specify those expectations, leaving some parents unsure. The department proposes to include in ARM 37.62.106(5) material drawn from current ARM 37.62.106(7)(e) concerning imputation of income to parents who are students, and extending such treatment to part-time students as well as full-time students. The effect would be to extend the deduction provided in ARM 37.62.110(1)(k) for school expenses to part-time students as well as full-time students. Income will be imputed if parent's education will result within a reasonable time in an economic benefit for the child for whom the support obligation is being determined, unless the actual income is greater. Because education or training can still be completed within a "reasonable time", the child can still see an economic benefit from the parent's part-time attendance. Because many students who attend school part-time are working full-time, CSED proposes imputing full-time income to parents who attend school part-time unless the parent's actual income is greater. CSED proposes deleting current ARM 37.62.106(8) treating when child care expenses and the Earned Income Credit should not be entered in the child support calculation because the rule has caused confusion in its application. As stated in ARM 37.62.111(1)(b) imputed employment-related expenses, such as imputed child care, are not allowed in the calculation. Adding child care as if it were an actual expense will do nothing but increase the obligation of the paying parent for an expense that doesn't exist. CSED proposes to amend ARM 37.62.106(6) to change words "should not be" to "is not" to set forth the mandatory effect CSED intends by this definition. CSED also proposes changing the description in ARM 37.62.106(6)(a) of the conditions in which income is not to be imputed by including two new words "and unreimbursed" with respect to the cost of child care. Child care subsidies are available to many lower income parents whose co-pay may be as little as $10 or $20 per month for care that may cost $500 or $600. This statement reinforces the rule that only the unreimbursed cost of the care is allowed consideration in the child support calculation. ARM 37.62.108 CSED proposes amending ARM 37.62.108(2) to set forth that if either parent's expenses are disputed, proof may be required. Some say it is common sense that an assertion of spending by a parent must be proven before the information can be used to calculate child support. However, requiring proof of all information included in a child support calculation would likely be excessive while no provision for requiring proof is unrealistic. CSED believes this straightforward warning will inform parties they may require and be required to prove the expenses, whether business or personal, they wish to have deducted from income available for child support. This provision gives the parties an opportunity to review the documentation provided and most importantly, to prepare a more accurate calculation. In Albrecht v. Albrecht, 2002 MT 227, 311 MT 412, 56 P.3d 339 (2002), the Montana Supreme Court held that the lower court "abused its discretion by deviating from the Guidelines' preference for a three-year average of net income for a self-employed parent." The current provision for at least three years' of business tax returns or financial statements for self-employed parents is referenced only in the instructions for the worksheet rather than in the rules themselves. CSED believes the provision should be added to the rules and clearly stated in the child support guidelines. The proposed addition to ARM 37.62.108(3)(a), requiring at least three years' tax returns or financial statements for use in determining income for child support will put guideline users on notice that the high court's opinion has been incorporated into this rule. CSED proposes amending ARM 37.62.108(4) to provide that nothing in this rule requires a particular method of determining annual income if the method does not accurately reflect income available for child support. This provision stems from the concern that there may be instances in which a three-year average of self-employment income does not accurately reflect income available for child support. The requirement to provide three years' tax returns should not be construed as a requirement to use the three-year average of income in every case.
ARM 37.62.110 CSED proposes amending ARM 37.62.110(1) by including a new provision explaining the philosophy behind the allowance for deductions from income, stating that deductions include those required by law, as a condition of employment, and those necessary for the production of income. By means of this explanation, a determination can be made about the deductibility of an expense that is not specifically addressed in the rules. CSED proposes amending ARM 37.62.110(1)(b). Current ARM 37.62.110(1)(b)(i) addresses an action to establish a support order and provides for a deduction of the annual amount of the existing support orders for the parent's other children and a deduction of an allowance as found in the rules for other children of a parent for whom no support order exists. Current ARM 37.62.110(1)(b)(ii) addresses an action to modify a support order by referring the user to ARM 37.62.146, a rule proposed for repeal. With the proposed repeal of ARM 37.62.146, the needs of other children will be treated the same in calculations for modification of a child support order as in calculations for establishment of a child support order. CSED proposes that amended ARM 37.62.110(1)(b)(i) address the deduction of existing child support orders for other children of the parents in the calculation. Proposed amended ARM 37.62.110(1)(b)(ii) addresses the deduction of an allowance for other children with no support order. Furthermore, CSED proposes an addition to the provision for children with no support order. In the past, a deduction was allowed for the "other child allowance" for a child who has no order for support and does not live with a parent in the calculation. The proposed amendment to ARM 37.62.110(1)(b)(ii) avoids crediting a parent for financial support of a child not actually paid. If the parent can prove payments are being made, the other child allowance will be permitted as a deduction from income. CSED proposes amending ARM 37.62.110(1)(d) by inserting the words "federal and state income" to describe the tax tables to which it refers. The purpose is to make it clear which tax tables one should use in the calculation of child support. ARM 37.62.110(1)(f) is moved from its location near the end of the allowable deductions so that all types of court-ordered expenses or payments are found in sequence. CSED proposes to amend ARM 37.62.110(1)(i) by adding a deduction for half the amount of annual extraordinary medical expense parents pay for their other children. Children's medical expenses are a cost to parents regardless of the birth order or the identity of the child's other parent and CSED thinks they should be a deductible expense for child support purposes. The reason that only half of the expenses are deductible is the same as for day care: only one parent of the other child is included in the calculation and the child's other parent is presumed responsible for the other half of the child's costs. CSED proposes to delete "full-time" from the description of student in ARM 37.62.110(1)(k) because CSED believes that "part-time" student parents are as able as full-time student parents to gain the benefits of higher education and there is no reason they should not be allowed deductions for its cost. CSED proposes adding new language to ARM 37.62.110(1)(l) to allow the deduction from income of annual interest on student loan repayments where the education has resulted in a benefit to the child who is the subject of the calculation. Unlike in years past, new resolve on the part of federal officials has caused the collection of student loans to become a near certainty for students today. Past due balances are withheld from federal income tax refunds just as past due child support is withheld. Arguing that interest payments are an employment-related educational expense that is not available to pay child support, parents believe is it only fair to allow its deduction from income in the support calculation. CSED has come to agree with them where it can be shown that the child has benefited. ARM 37.62.111 CSED proposes amending ARM 37.62.111(1) by deleting from the category of deductions which are not allowed subsections (1)(b) and (c) of the current rule relating to net losses from business and farm operations, and investment losses outside of the normal course of business. The treatment of business and investment losses at the time income entries are determined is set forth in subparagraphs of New Rule I(2)(b). This information is intended to assist parties and attorneys with adapting tax return entries to the child support calculation. CSED also proposes setting forth in new ARM 37.62.111(1)(b) a provision not allowing deduction of imputed employment-related expenses such as imputed child care. Imputation of employment-related expenses causes adjustments in the child support calculation, resulting in an increase in the child support obligation based on phantom costs that don't really exist. ARM 37.62.114 CSED proposes amending ARM 37.62.114(1) by deleting the word "index" from the phrase "federal poverty index" and by replacing it with the current federal usage of "guideline", so the rule correctly reads, "federal poverty guideline." CSED proposes amending ARM 37.62.114(2) by replacing instructions for determining the personal allowance when a parent is responsible for the support of someone not already considered in the calculation. The personal allowance is intended to be a contribution toward a parent's most basic needs and may be adjusted to include a disabled spouse, for example, by increasing to two the number in the parent's household when consulting the federal poverty guidelines. This is another example of a line-item rebuttable presumption, intended to customize the child support calculation to the particular family involved. ARM 37.62.123 CSED proposes amending the text of ARM 37.62.123(1)(b) to limit the cost of health insurance coverage for the child which may be used to supplement the primary child support allowance for the amount necessary to add the child to an existing health care policy or the cost of a child-only policy. In the past there has been confusion regarding the cost of the parent's health insurance premium where there is no existing policy and the parent must first insure him or herself before a child can be added. The intent has always been to include only the premium that adds the child; otherwise one parent could be charged for a portion of the other parent's health insurance. CSED proposes amending the text of ARM 37.62.123)(1) to include a new (c) and thereby redesignate the current (c) as (d). CSED proposes in new (c) to allow the primary child support allowance to be supplemented by recurring and predictable unreimbursed health care expenses for each child of the calculation which exceed $250 per year. The new category provides for those health care expenses that exceed the routine and minor charges most parents incur on behalf of their children over the course of a year. The first $250 for each child represents those routine and minor expenses for which both parents are responsible in their individual shares. Only children's expenses that meet the "recurring and predictable" requirements and exceed $250 per year are eligible to be included in the calculation. A diabetic child, for example, may have unreimbursed medical expenses of $150/month that are entirely predictable along with other expenses that are sometimes incurred and sometimes not. Only $150 per month of predictable expenses may be included in the child support calculation as a supplement because the other expenses may or may not occur in a given year. CSED's biggest concern with including any medical expense in the child support calculation is the possibility the expense will not be incurred and one parent would pay child support to the other for an expense that does not exist. If there is any doubt the expense will be incurred it should not be included in the calculation. Whether included in the calculation or not, the children's unreimbursed medical bills are divided between the parents according to the percentage of income each parent displays in the support calculation. CSED proposes to redesignate current (1)(c) as (1)(d) because of the inclusion of new (1)(c), as described above, and further proposes deleting from ARM 37.62.123(1)(d), the words "including other health related costs". ARM 37.62.123(1)(c) currently allows the primary child support allowance to be supplemented by "other needs of the child as determined by the circumstances of the case, including other health related costs". CSED proposes deleting the words "including other health related costs" because health related costs are now covered in ARM 37.62.123(1)(c) and the reference to "other needs of the child as determined by the circumstances of the case" will remain as the sole provision of ARM 37.62.123(1)(d). ARM 37.62.126 CSED proposes changing ARM 37.62.126(1)(a) and (3), by replacing the references to cases in which a parent's income may be "insufficient to meet the parent's personal allowance" with a more specific and exact phrasing referring to a parent's income being "less than or equal to the parent's personal allowance" to ensure the rule is understood to extend to cases in which a parent's income is equal to the parent's personal allowance. CSED proposes amending ARM 37.62.126(1)(b)(i) and (ii) to set forth the current measure of a parent's minimum contribution, which is "12% of income after deductions." The current rule mistakenly provides that the parent's minimum contribution might be "the difference between income after deductions and the parent's personal allowance" if that amount is greater than 12% of income after deductions, and the incorrect language is removed. CSED proposes amending ARM 37.62.126(3) by replacing the percentages set forth in the table for implementing the minimum child support contribution for low-income parents with more accurate percentages at the high end of the scale. ARM 37.62.134 CSED proposes amending ARM 37.62.134, by combining into one rule in a straightforward manner all information relevant to how each parent's annual child support obligation is determined and allocated between the parents. The explanation of parent's child support obligations extends from the only child to multiple children, from the simple parenting plan where all the children reside primarily with one parent to complex split and shared custody arrangements. ARM 37.62.134(2)(a)(ii) sets forth the manner in which transfer payment amounts are rounded when whole dollar support amounts are divided by multiple children. The proposed rule provides for all support orders being stated in per child amounts even when the amounts are not identical for each child. By doing so, child support orders will not have to be modified when each child emancipates. Instead, the monthly transfer payment may be adjusted to exclude the obligation for the emancipating child. ARM 37.62.140 CSED proposes amending ARM 37.62.140(1) to require to the extent possible that child support orders address any anticipated changes to the needs of children as they grow and mature so as to minimize the need for modifying the child support orders. CSED proposes the amendment to impress upon the reader the necessity for awareness of anticipated changes to the parent's and children's circumstances so that additional child support calculations can be completed, if necessary, at the same time as periodic modification, for example. Frequently, enough information is known in advance of a change, such as the end of child care for the youngest child, or emancipation of the oldest child, that an accurate calculation can and should be prepared 18 months in advance. This attention to the milestones in a child's life may result in fewer formal reviews of a support order over the course of the child's minority. ARM 37.62.148 CSED proposes amending ARM 37.62.148(1) to identify the department's internet address as a source for obtaining the child support calculation worksheet in order to increase ease of use for guideline users. The rule is also amended to change the wording from child support "determination" to "calculation" to reflect current word usage. CSED also proposes removing language promising to provide updated child support worksheets annually because worksheets are updated only when rules change, not annually. Only the guideline tables are to be updated annually. ARM 37.62.2121 CSED proposes amending ARM 37.62.2121 to correct a typographical error by changing language currently referring to "subchapter 6 of this chapter" to "subchapter 9 of this chapter," which is the correct reference. Subchapter 6 is reserved and the correct hearing procedure subchapter is 9. ARM 37.62.136, 37.62.138, and 37.62.146 CSED proposes repeal of ARM 37.62.136 and 37.62.138 because they would be absorbed into other rules. In the case of ARM 37.62.146, the modification rule currently functions to limit the increase or decrease in child support due for children whose parents have additional children with other partners. In the majority of calculations, all the children are considered, but in a small portion of cases this rule results in some children not being considered. With the repeal of this rule the child support guidelines will consider every child who resides with the parents, as well as every child to whom support is owed by the parents, regardless of when the child was born. This approach makes the second calculation unnecessary as all children are considered in the initial calculation. Fiscal Impact No change in state or federal funds or funding is expected to result from the proposed changes to the Montana child support guidelines. Because a calculation of child support according to the guidelines is required to determine the amount of child support owed by one parent to the other, it is not possible to estimate the cumulative amount of increases or decreases due to the proposed rules. For the same reason, it is not possible to estimate the number of persons affected. 7. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail [email protected], and must be received no later than 5:00 p.m., December 8, 2011. 8. The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing. 9. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 7 above or may be made by completing a request form at any rules hearing held by the department. 10. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems. 11. The bill sponsor contact requirements of 2-4-302, MCA, do not apply. /s/ John Koch /s/ Anna Whiting Sorrell Rule Reviewer Anna Whiting Sorrell, Director Public Health and Human Services Certified to the Secretary of State October 31, 2011.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A directory of state agencies is available online at http://www.mt.gov/govt/agencylisting.asp.
For questions about the organization of the ARM or this web site, contact [email protected].
